As global banks continue their cautious re-emergence, most of them are now scrambling to devise and update their corporate governance structures, policies and regulations intended to safeguard and sustain growth, and possibly to shield from future potential crises.
Those that succeeded in softening the eventual blow of the sub-prime crisis were the ones that had the strong basics in place; they are the ones that have always placed a strict emphasis on corporate governance as an important pre-requisite to the success and resilience of a financial organisation.
Furthermore, these institutions were not only able to minimise the damage to themselves, but were also able to maintain a decent reputation within society while maintaining their contribution to the overall economy. This shows that the way a financial institution is run and governed directly impacts its macro-environment.
Abu Dhabi Commercial Bank (ADCB) recognises that good governance is critical to achieving its objectives and successes. The bank has designed its governance framework with due care and careful consideration of local and international best practices and guidelines, stakeholders’ interests, sustainability and long-term objectives. It is fully committed to the guiding principles of responsibility, accountability, transparency and fairness, which it considers to be the four pillars of good governance.
Similarly, ADCB recognises that its stakeholders have a vested interest in its success and sustainability, and that good governance practices play a critical role in ensuring that each of these interests is respected.
A noteworthy model
As ADCB continues its unrivalled success story and embraces the ‘new normal’ across global markets and economies, one of its core objectives is to continue to redefine governance strategies and to uphold standards of excellence. This was the recipe that helped it beat all the odds during the recession of 2008-09, and the same formula that will help it achieve its ultimate goal of evolving into the number-one bank of choice in the UAE.
Those that succeeded in softening the eventual blow of the sub-prime crisis were the ones that had the strong basics in place
Rami Raslan, Senior Corporate Secretary, Legal and Board Secretariat at Abu Dhabi Commercial Bank, says, “Corporate governance is a mindset – a case of ‘want to’ versus ‘have to’. Our honest approach and transparency in the market have been key to ensuring the brand maintained pole position at all times. ADCB pledges to uphold its genuine values, and remains committed to its key stakeholder groups, namely customers, country, employees and shareholders.”
Some of the bank’s efforts include sustainability reporting, enhancing its disclosure and transparency reporting systems, as well as the integration of governance risks into its lending criteria process. The bank’s concerted efforts have led to international recognition as a governance leader in the region from a number of publications.
World Finance has acknowledged ADCB’s corporate governance policy as one of the best in the UAE this year. It was the first bank in the GCC to meet the stringent disclosure and transparency requirements to sell bonds to US investors (the 144A programme) in 2009, and was the central focus of a case study by the World Bank for its corporate governance achievements.
These measures demonstrate ADCB’s ongoing commitment to honouring its guiding principles of responsibility, accountability, transparency and fairness, and aim to optimise its performance and efficiency, as well as achieving long-term sustainable growth. Such efforts have led to ADCB being recognised internationally as a governance leader in the region.
Today, ADCB has a robust governance structure due to the support and commitment of its board of directors, CEO and senior members of management. The board, board committees and senior management all fully monitor its governance framework. The bank has also invested in forming a dedicated team of professionals and governance experts who actively monitor local and international governance developments. This team regularly reviews the bank’s governance practices and proposes strategies to implement best practices within the bank.
ADCB’s aim to be the bank of choice in the UAE requires constant innovation while ensuring the highest levels of integrity, in order to gain and maintain the respect of its key stakeholders. To achieve this ambitious vision, its governance approach lives and breathes by its slogan, ‘long live ambition’, through its continuous monitoring, dialogue and fresh initiatives, and enables ADCB to meet the evolving interests of its stakeholders and deliver sustainable growth and long-term value.
Going forward, the bank intends to focus on key governance areas, such as in-depth reviews of: risk governance (to consider risk issues and ensure full board awareness); Islamic banking; organisational transparency (including e-learning training on corporate governance); and remuneration governance.