Taiwan's Financial Supervisory Commission (FSC) recently announced plans to introduce an individual accountability regime to the financial industry, as reported by Regulation Asia. This is a part of the FSC's efforts to cultivate a culture of integrity, establish a corporate governance regime based on responsibility, and improve accountability for senior executives in the banking sector.
The regulator urged Taiwan's banking association to use the UK's Senior Managers Regime (SMR) as a blueprint for developing a "responsibility mapping system" for allocating responsibility and accountability to individuals in organizations. The system should require that banks clearly assign management responsibilities throughout the organization, the FSC states. Executives would then have to sign a statement of responsibilities acknowledging the activities for which they are accountable.
The FSC recommended that Boards of Directors be required to oversee the implementation of the responsibility mapping system, either by establishing a new committee or designating an existing committee as responsible for accountability matters.
As a first step in this process, banks should inventory the senior management functions and their distribution of responsibilities, the FSC wrote. They must also make any necessary changes to their organization's structures and policies to facilitate the responsibility mapping system.
The FSC will require that banks have such systems in place by the end of 2024, with implementation planned for January 1, 2025.
In an In Focus article from our 2023 Compendium, Hank Huang, President of the Taiwan Academy of Banking and Finance, argued that managing corporate culture is an "urgent matter of nation-building, and central to the social coherence of Taiwanese society." ▸ Read More