A draft code of conduct published Tuesday cautioned bankers to mind the bonuses awarded to managers for aggressive sales tactics, according to Blacklock’s Reporter. .“Leaders actively shape the culture by what they say and do, and do not say and do,” said the Office of the Superintendent of Financial Institutes in a draft. .“This includes senior leaders, including senior management and heads of oversight functions setting a consistent ‘tone from the top.’”.This warning follows whistleblower testimony at the House of Commons Finance Committee revealing branch managers were rewarded for selling customers products they did not need or could not afford. .The draft said bank bonuses must “promote sound decision making, prudent risk taking, and effective risk management.” .“Financial institutions should design and implement compensation frameworks and incentive plans to encourage expected behaviour and discourage undesired behaviour at all levels, including senior management,” it said. .Bank executives testifying at committee hearings in 2017 denied rewarding hard-selling branch managers. Former Canadian Imperial Bank of Commerce senior vice president Scott Wambolt said issues arise from time to time in an industry with tens of millions of clients and billions of transactions. .Royal Bank Executive Vice President Kirk Dudtschak said management uncovered 75 cases of misselling the previous year. Dudtschak said 20 employees were fired. .Former Scotiabank executive vice president James McPhedran said customers were referred to financial advisors “based on their needs.” McPhedran said he is confident Scotiabank’s practices are sound. .Whistleblowers testified aggressive bonus-driven sales tactics were routine. .Retired Scotiabank employee Sally Watson said sales goals were an insidious topic for branch employees. Watson said staff were assigned branch sales targets under threat of blacklisting and urged to raise customer credit card limits or sell mortgages larger than people could afford. .“I remember no code of conduct whatsoever when it came to how to sell products,” she said. .“You were given your goals and told to get them.”.This draft comes after executives at the Canada Infrastructure Bank (CIB) in 2021 were found to be hiding bonuses they paid to themselves. .READ MORE: Taxpayers’ bank refusing to divulge exec bonuses.The Commons Finance Committee ordered the information from the CIB three months prior, but no details had been coughed up. .“Nothing has been sent,” said Conservative MP Stephanie Kusie (Calgary Midnapore).
A draft code of conduct published Tuesday cautioned bankers to mind the bonuses awarded to managers for aggressive sales tactics, according to Blacklock’s Reporter. .“Leaders actively shape the culture by what they say and do, and do not say and do,” said the Office of the Superintendent of Financial Institutes in a draft. .“This includes senior leaders, including senior management and heads of oversight functions setting a consistent ‘tone from the top.’”.This warning follows whistleblower testimony at the House of Commons Finance Committee revealing branch managers were rewarded for selling customers products they did not need or could not afford. .The draft said bank bonuses must “promote sound decision making, prudent risk taking, and effective risk management.” .“Financial institutions should design and implement compensation frameworks and incentive plans to encourage expected behaviour and discourage undesired behaviour at all levels, including senior management,” it said. .Bank executives testifying at committee hearings in 2017 denied rewarding hard-selling branch managers. Former Canadian Imperial Bank of Commerce senior vice president Scott Wambolt said issues arise from time to time in an industry with tens of millions of clients and billions of transactions. .Royal Bank Executive Vice President Kirk Dudtschak said management uncovered 75 cases of misselling the previous year. Dudtschak said 20 employees were fired. .Former Scotiabank executive vice president James McPhedran said customers were referred to financial advisors “based on their needs.” McPhedran said he is confident Scotiabank’s practices are sound. .Whistleblowers testified aggressive bonus-driven sales tactics were routine. .Retired Scotiabank employee Sally Watson said sales goals were an insidious topic for branch employees. Watson said staff were assigned branch sales targets under threat of blacklisting and urged to raise customer credit card limits or sell mortgages larger than people could afford. .“I remember no code of conduct whatsoever when it came to how to sell products,” she said. .“You were given your goals and told to get them.”.This draft comes after executives at the Canada Infrastructure Bank (CIB) in 2021 were found to be hiding bonuses they paid to themselves. .READ MORE: Taxpayers’ bank refusing to divulge exec bonuses.The Commons Finance Committee ordered the information from the CIB three months prior, but no details had been coughed up. .“Nothing has been sent,” said Conservative MP Stephanie Kusie (Calgary Midnapore).
