Banking on governance,
Insuring sustainability


The world is currently witnessing what is arguably the biggest crisis in living memory, as COVID-19 has become a global pandemic causing serious health problems and deaths. It has wreaked havoc on financial markets and caused massive disruption to supply chains and business activities all over the world.

The COVID-19 crisis adds to the growing risks that companies have to deal with. In times of crises, good corporate governance and risk management are more important than ever. Countries and organisations that have good governance are more trusted by stakeholders and are better able to respond and weather the storm. Companies with good business continuity planning face less disruption to their operations.

This report examines the corporate governance, remuneration and risk management practices of the 50 largest listed banks and 50 largest listed insurance companies in the Asia-Pacific region, and how these financial services companies are responding to new and emerging challenges relating to corporate culture, technological disruption, cybersecurity, environmental, social and governance issues, and responsible lending and investing.

One finding from this report tells us how unprepared the world was for the COVID-19 pandemic. Only one bank and three insurers had identified a pandemic as one of the key risks. As most financial institutions were grappling with key risks such as technological disruption and cybersecurity, they were blindsided by a much bigger risk.

But risk evolves and never sleeps. And neither should governance.


Banking on governance, insuring sustainability report

Banks and insurance companies have to acknowledge that corporate governance and risk management are not checklist exercises or mere compliance with capital market regulations. Rather, they are important tools in supporting value-creation on a sustainable basis. Financial institutions must elevate their strategies to create socially beneficial impacts for communities they operate in. This requires independent, competent, diverse and committed boards to place key issues onto their agendas and ensure that they are considered and embedded into strategic decisions.

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Highlights

Warning

RISK MANAGEMENT

Only one bank and three insurers were prepared for a pandemic.

30 per cent of banks and 10 per cent of insurers use analytics to manage risks.

TECHNOLOGY

19 banks and nine insurers appointed directors with technology experience.

24 per cent of banks and 18 per cent of insurers have a board-level technology committee.

CYBERSECURITY

62 per cent of banks and 50 per cent of insurers named cybersecurity as a key risk.

32 per cent of banks train directors on cybersecurity.

Currency Australia

REMUNERATION

Highest paid bank CEOs
1. DBS
2. Public Bank in Malaysia
3. OCBC

Highest paid CEOs of insurers
1. AIA Group Hong Kong
2. New China Life
3. Great Eastern Holdings

EMERGING TRENDS

This report identified several emerging areas which boards and senior management of financial institutions should pay more attention to.

Networking

Corporate culture

 

Technological disruption

Cybersecurity

Sustainability

RELATED RESOURCES



Corporate Governance Case Studies Volumes 1 to 8

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