BSP Governor Rafael Buenaventura made his statement before the7th annual CEO Forum here hosted by the Businessweek magazine where he was resource speaker and recipient of the Star of Asia Award.
In forum which discussed how to balance good corporate governance, social responsibility and profit motive, Buenaventura made an example of the Philippine regulatory policies on good corporate governance.
According to Buenaventura, the BSP has decided to take a more aggressive position on the re-education of bank executives in order to catalyze the shift from traditional management style to the latest management fad in the business community.
Buenaventura told the forum that bank executives including members of the board of directors are required to get a certification for good corporate governance, proving that they have undergone the required seminars.
Under Philippine rules, Buenaventura said bank officers are given until June this year to complete the seminar but this deadline has been extended to the end of the year.
Buenaventura said at present, the compliance rate of banks is 88 percent. "Attending the seminars might not sound much but education is where it always starts," Buenaventura said.
If they do not comply, Buenaventura said the BSP has the power to disqualify bank officers and directors from taking their positions in the bank under its so-called "fit and proper" rules.
The "fit and proper" rules of the BSP established a strict set of criteria that bank officials and directors have to meet before they would be allowed to take up their positions in the bank. "Banking is a public trust," Buenaventura said. "It’s critical to ensure this or the banking system itself would be at risk due to loss of credibility."
The BSP earlier reported that the remaining bank officials that have not been able to get the certification were mostly from small banks in the rural areas where access to accredited institutions is difficult.
The major banking groups, Buenaventura said, are more aggressive even early on, particularly commercial banks.