MALAYAN BANKING BERHAD EXPLORING ITS ORGANISATIONAL CULTURE
Khoo Teck Puat went to work for OCBC, starting his career as a simple bank clerk. By the 1950s, Khoo had risen to a position of senior executive. By the end of the decade, however, Khoo recognized that his prospects at OCBC remained limited. Given the lack of further advancement open to him at OCBC, as well as what he considered the company's narrow perspective on its future, Khoo decided to set up his own bank and applied for a banking license. That license was granted to Khoo and a number of other OCBC executives who left the bank to form Malayan Banking Berhad in 1960.
Malayan Banking Berhad or Maybank was incorporated in Malaysia on 31 May 1960 and commenced operations on 12 September 1960. On 17 February 1962, Maybank was listed on the then Kuala Lumpur Stock Exchange (today Bursa Malaysia). Maybank is today among the top companies by market capitalisation on Bursa Malaysia.
Maybank is Malaysia’s largest financial services group with total assets exceeding RM330 billion. The Group has an extensive global network of 1,750 offices in 14 countries namely Malaysia, Singapore, Indonesia, Philippines, Brunei Darussalam, Vietnam, Cambodia, China, United Kingdom, U.S.A., Bahrain, Papua New Guinea, Pakistan and Uzbekistan
The Group offers a comprehensive range of financial services and products ranging from commercial banking, investment banking, Islamic banking, cards issuance, offshore banking, leasing and hire purchase, insurance, factoring, trustee services, asset management, stock broking, nominee services, venture capital and Internet banking. Today, the Maybank Group has over 40,000 employees who serve over 18 million customers worldwide, with 9.5 million customers in Malaysia alone.
MAYBANK’S CORE VALUES AS ORGANIZATION VALUES
Maybank has five core values as foundation of business which came out from their Logo (T.I.G.E.R), all its staffs are guided by five core values, which they are to uphold, emulate and personify these values in their daily working lives.
DECISION MAKING PROCESS
Decision making process is an important role for senior management to ensure sustainability of its organisation success. Due to excellence & efficiency as one of its key value, transparency is very important in decision making process. For example, the composition of the Board fairly reflects the interest of the majority shareholder, which is adequately represented by the appointment of its nominee directors without compromising the interest of the minority shareholders. The influence of the nominees for the major shareholder of Maybank is balanced by the presence of the independent directors on the Board whose collective views carry significant weight in the Board’s deliberation and decision-making process. In this regard, the independent directors are in effect representing the interest of the minority shareholders by virtue of their roles and responsibilities.
The independent directors do not participate in the day to- day management of the Group and do not engage in any business dealing or other relationships with the Group in order to ensure that they remain truly capable of exercising independent judgment and act in the best interests of the Group and its shareholders. Further, the Board is satisfied and assured that no individual or group of directors has unfettered powers of decision that could create a potential conflict of interest.
The Board believes that the quality of its directors, each of whom offers a broad range of skills, knowledge and experience, ensures that they are able to challenge, develop and drive the Group’s vision and strategy, and that the governance standards are continuously upheld. The Chairman will always ensure that the Board’s decisions are based on consensus of the majority, and any concerns or dissenting views expressed by any directors on any matters deliberated at meetings of the Board or any of its Committees as well as the meeting’s decision, will accordingly be addressed and recorded in the relevant minutes of meetings.
The core values are not only meant for the management team, it also has affects its middle management, line managers and its staff. The core values are the guideline for its staff to base at for decision making process. For an example, if the supervisor is evaluating their staff performance, it will be made base on its core value on how the staff has met the goals set upon them such as Teamwork, Integrity, Growth, Excellence & Efficiency & Relationship Building.
POLICIES & PROCEDURES
Policies and procedures are the nerve of an organization. Its failure will have adverse impact on company’s performance. As such, Maybank has ensured compliance with internal control, and the prescribed laws and regulations by the regulators. These policies and procedures are set out in the Group’s Standard Practice Instruction and updated from time to time in tandem with changes to the business environment or regulatory guidelines. As integrity is one of its key value, they has established necessary controls to safeguard the bank and provide value added services to its shareholders and customers such as:
• An annual business plan and budget is submitted to the Board for approval. Actual performances are reviewed against the targeted results on a monthly basis allowing timely responses and corrective actions to be taken to mitigate risks. The Board also reviews regular reports from the management on the key operating statistics, as well as legal and regulatory matters. The Board also approves any changes or amendments to the Group’s policies.
• The Board has also set up several Board Committees to assist the Board in performing its oversight functions. Specific responsibilities have been delegated to these Board Committees, all of which have formalised terms of reference. These Committees have the authority to examine all matters within their scope and report to the Board with their recommendations.
• Group Executive Risk Committee, Group Management Committee, Group IT Steering Committee, Group Management Credit Committee, Group Procurement Tender Committee (now restructured and known as Group Procurement Committee - GPC), Group Staff Committee, Internal Audit Committee, Asset and Liability Committee and Credit Committee are also established as part of its stewardship function to ensure effective management and supervision of the areas under the respective Committee’s purview.
• Recruitment and promotion policies/guidelines within the Group are established to ensure appropriate persons of calibre are selected to fill positions available. Formal training programmes either face-to-face or through e-learning, semi and annual performance appraisals and other relevant procedures are in place to ensure that staff are competent and adequately trained in discharging their duties and responsibilities effectively. Proper guidelines are also drawn-up for termination of staff.
• A clearly defined framework with appropriate empowerment and authority limits has been approved by the Board for acquisitions and disposals of assets, awarding tenders, writing-off of operational and credit items, donations, as well as approving general and operational expenses.
Based on their review, the external auditors have reported to the Board that nothing had come to their attention that causes them to believe that the Statement on Internal Control is inconsistent with their understanding of the processes the Board have adopted in the review of the adequacy and integrity of the internal control of the Group.
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PLANNING & CONTROL
It is of the view that the internal control framework is designed to manage the Group’s risks within an acceptable risk profit, rather than eliminate the risk of failure to achieve the policies, goals and objectives of the Group. It can therefore only provide reasonable rather than absolute assurance of effectiveness against material misstatement of management and financial information or against financial losses and fraud.
Maybank has put in place an on-going process for identifying, evaluating, monitoring and managing significant risks that may affect the achievement of business objectives. The process which has been instituted throughout the Group is updated and reviewed from time to time to suit the changes in the business environment and this on-going process has been in place for the whole financial year under review.
The role of Management includes:-
identifying and evaluating the risks faced;
formulating related policies and procedures to manage these risks;
designing, operating and monitoring a suitable system of internal controls; and
implementing the policies approved by the Board.
The key processes that the Directors have established in reviewing the adequacy and integrity of the system of internal controls include the following:-
Risk Management Framework
Maybank has established an organisation structure with clearly defined lines of responsibility, limits of authority and accountability aligned to business and operations requirements which support the maintenance of a strong control environment. It has extended the responsibilities of the Audit Committee to include the assessment of internal controls, through the Internal Audit (“IA”) function. The Board has also delegated the responsibility of reviewing the effectiveness of risk management to the Risk Management Committee. The effectiveness of the risk management system is monitored and evaluated by the Group Risk Management function, on an on-going basis.
Risk management principles, policies, procedures and practices are updated regularly to ensure relevance and compliance with laws and regulations and are made available to all employees. To further enhance risk awareness within the Maybank Group, a series of Risk Awareness Programs have been conducted at all levels of staff emphasising the importance of control environment. The Group has also adopted a whistle blowing policy, providing an avenue for employees to report actual or suspected misconduct or violations of the company’s policies and regulations in a safe and confidential manner.
Establishment of the three (3) lines of Defence concept – risk taking units, risk control units and internal audit. The risk taking units are responsible for the day-to-day management of risks inherent in their business activities while the risk control units are responsible for setting the risk management framework and developing tools and methodologies. Complementing this is internal audit, which provides independent assurance of the effectiveness of the risk management .
INFORMATION PROCESSING & COMMUNICATION
Maybank Group's Code of Ethics and Conduct sets out the sound principles and standards of good practice in the financial services industry, which are observed by the directors and its employees.
Both directors and employees are required to uphold the highest integrity in discharging their duties and in dealings with stakeholders, customers, fellow employees and regulators. This is in line with the Group’s Core Values which give emphasis on behavioural ethics when dealing with third party and fellow employees. The Group communicates the Code to all directors and employees upon commencement of their employment and is deemed to be part of the Terms and Conditions of Service.
Maybank, as a custodian of public funds, has a responsibility to safeguard its integrity and credibility. It is on this understanding that the organisation sets out clearly the code of ethics and conduct for its staff. The code stipulates the sound principles that will guide all Maybank staff in discharging their duties. It sets out the standards of good banking practice.
In addition to these, staff should:
Ensure integrity and accuracy of records and/or transactions.
Ensure fair and equitable treatment in all business dealings on behalf of the Bank.
Maintain the highest standard of service in their relationship with customers.
Maintain confidentiality of all relations and dealings between the Bank and its customers. However, confidential information concerning a customer may be given or made available to third parties only with prior written consent of the customer or when disclosure is authorised under the Banking and Financial Institutions Act, 1989.
Manage their financial matters well and not subject to pecuniary embarrassment.
Observe and comply with laws and regulations relating to the operations of the Bank.
Show appreciation, respect and customer centricity
Develop long-term and mutually beneficial relationships
Build customer loyalty and understand their expectations
Develop strong and friendly working relationship with colleagues to achieve business goals
Embrace and support diversity of workforce (e.g. gender, race, experiences &
Build mutually beneficial relationship with all stakeholders
At Maybank, staffs are guided by its Core Values of Teamwork, Integrity, Growth, Excellence & Efficiency and Relationship building. As an integral part of its staff daily efforts, these values guide them to pursuit for growth and excellence. Any aspiration can come true with the right opportunity is the key word of Maybank. The management team has set their sights on selecting the brightest minds to be part of their team. The search is on for inspired individuals who are ready to go the distance with one of the leading financial institutions in Malaysia. Maybank offers the required opportunities for growth and excellence to achieve a mutually beneficial partnership and winning edge.
Maybank focuses on capturing growth opportunities in high growth while taking a proactive and conservative approach to capital management by continuing to establish their presence in high growth markets. Maybank’s strong track record of financial strengths and high credit ratings allow them to keep their momentum and continue with robust performance even amidst the current environment.
The re-energised Core Values, i.e. acronym T.I.G.E.R. which stands for Teamwork, Integrity, Growth, Excellence & Efficiency and Relationship Building was the result of the focus groups conducted with Maybankers from various units across Sectors. This simplified version aims to complement our existing Core Values and to make it easy for all employees to remember and understand the values. Note:
The existing Core Values remains unchanged
The Re-energized Core Values are the simplified version that complement the current Core Values
The Core Values is the foundation that supports Maybank Group's Aspirations
The Core Values are values or behavioural characteristics that form the foundation on which we perform work and conduct ourselves
By strengthening their core business and franchise, they gain competitive advantage by achieving synergies across their diverse group. Domestically, they aim to achieve leadership across key and profitable segments. Internationally, they capture value from new investments and continue to pursue organic expansion by delivering innovation and superior customer value. They are the top recruiter of talent and view their leadership pool and talent pipeline as key to realising their aspirations. They constantly seek to enhance performance management and achieve cost optimisation by focusing on effective Information Technology operations and enhancing employee productivity.
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