adnan zaylani mohamad zahid : ethics & professionalism - leaders as role models for the next generation of islamic finance professionals speech by mr adnan zaylani mohamad zahid, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the chartered institute of islamic finance professionals ( ciif ) 4th anniversary dinner and conferment ceremony, kuala lumpur, 6 november 2019. * * * i wish to extend my sincerest thanks to the chartered institute of islamic finance professionals ( ciif ) for inviting me here this evening to join the celebrations for the 4th anniversary of the institute as well as the conferment ceremony of the chartered professional in islamic finance ( cpif ) professional designation. i understand that this evening will also see the conferment of the first ever fellows from amongst the existing chartered members of the institute, all of whom have served the islamic finance industry with distinction over the years. the institute ’ s efforts to support the professionalisation of the islamic financial services industry is part of a long journey that we embarked on some time ago, forming a key step towards achieving a vision of an industry that is rich with talent. developing talent development together as an industry recognising that talent development is a long - term endeavour, bank negara malaysia had set out the initial plan in the financial sector blueprint 2011 – 2020 in which several affiliate institutions had been identified as having crucial roles to play in the development of talent for financial services industry as a whole. on islamic finance, institutions such as islamic banking & finance institute malaysia ( ibfim ), association of shariah advisors in islamic finance ( asas ), international centre for education in islamic finance ( inceif ) and international shari ’ ah research academy for islamic finance ( isra ) were amongst the key affiliates that were given specific mandates for education and training. similarly, the chartered institute of islamic finance professionals ( ciif ), then known as the association of chartered islamic finance professionals ( acifp ), was identified as the key institution to develop professional standards and set the professional qualifications for the industry. the institute, now entering its 5th year of establishment, is recognised as the industry ’ s own professional body through the islamic finance profession charter, and as such is strategically positioned as the platform for the development of ethically driven talent imbued with professional integrity. with the industry leadership on board as ciif ’ s members, the professional body is expected to continue its

s board of directors should understand the bank ’ s exposure to risk, and its members should be willing and able to critically question senior management about important matters affecting those risks. in my experience, specific technical financial expertise – which may be somewhat more difficult to find in smaller communities – is not nearly as important in this regard as board members ’ ability to exercise sound and effective judgment regarding different risks confronting the bank and to take seriously their responsibility for the long - term interests of the bank. the board of directors, along with a strong senior management team, can contribute substantially to the safe and sound operation of the bank by setting the “ tone at the top ” regarding activities and behaviors that are either encouraged or frowned upon. well - informed managers and staff constitute another inner circle. customer - facing employees who know their business and know their customer base can play a critical role in catching problems at inception. and institutional knowledge of this kind is an area of relative strength for community banks. successful business lines are profitable because they are run by those who understand and can manage risk. risk is best understood, i believe, by those who are engaged in the day - to - day business of the bank. a bank in which every employee understands his or her responsibility for managing risk is likely to be more sound than a bank in which risk management is always seen as someone else ’ s responsibility. while risk management starts at the business - line level, a well - run bank also has in place an effective program for enterprise - wide risk management that is supported by strong internal controls. i know that many smaller community banks may not have the resources to establish a separate risk management function, but that is not necessarily a problem if senior bis central bankers ’ speeches management and other key personnel establish a system of internal, independent checks and balances to ensure that risks are regularly identified, controlled or otherwise managed, and monitored. these systems include not only core functions such as credit administration, effective reporting of information to senior management and the board, and policies and procedures that are documented and implemented, but also processes that try to look ahead to potential risks on the horizon. another of the inner circles is a strong internal audit function that reviews the bank ’ s operations, risk management, and internal controls. in particular, an effective internal audit function will : identify processes to be audited based on risk exposure, establish a schedule and frequency for performing internal audits, ensure that there is accountability for fixing problems identified in the audit, and escalate significant