Governance and integration banking center of the development process

1503 2016

He called the International Union of Arab Bankers member Dr. Sadeq al-Shammari to adopt corporate governance and banking integration as one of the steps to reform the financial sector in Iraq, which aims to maintain public money by adopting the best international accounting and auditing standards.

He said in an interview for »morning« that good governance will lead to curtail many of the mismanagement that may accompany the implementation of the financial operations locally, regionally and internationally problems
He said that the most important obligations that called for taking joint governance or governance represents a big collapses in major companies and public scandals that followed the collapse, as well as the intensification of financial corruption, as happened in a major US companies such as the (Enron), as well as the explosion of the financial crisis in Southeast Asia in 1997, and Mexico and Argentina due to the lack of legal and regulatory systems for these companies and institutions in many countries and the weakness of supervision and oversight of financial liberalization for many global companies and opening systems.

Achieving justice

Shammari pointed out that the adoption of corporate governance or governance of banks and financial institutions aimed at achieving justice and fairness by taking decisions in a fair and prevent any potential conflicts between the interests of shareholders and other stakeholders, and the protection of minority shares and compensate holders of rights appropriate ways if they violated their rights.

It also aims to achieve transparency by providing non-financial right for shareholders and other stakeholders of financial information and delivery information right time in order to enable shareholders to make an appropriate decision in connection with her, as well as clarify the Bank's activities for each external parties for clarity and paper activities in front of depositors and investors
Among Shammari said the targets also include responsibility and accountability which is to abide by the laws and working to meet the needs of shareholders and other stakeholders and the Board of Directors set the strategic goals of the bank and oversee the executive management and the accountability of the administration by the Board of Directors and shareholders and other stakeholders, as independence goals include represented the independence of the board and its committees and multiple independent external auditor and the independence of internal audit.

Sources of funding

He pointed out that governance helps in attracting local and international sources of funding for expansion, growth and development, and to maximize the market value of the shareholders and the shareholders and supports competition in the market competition, and the use of mechanisms and instruments that will be the evolution of investments in order to achieve profitability and minimize the risks, as well as it supports stability capital markets in banking services that contribute to the achievement of the required efficiency and the economic value and control to protect the banks and financial institutions as well as the resources to work on strengthening investor confidence and to ensure transparency and disclosure in the financial statements.

Shammari said that governance is working on regulations to ensure that reduce fraud and corruption and conflicts of interest, and put control and audit systems and accountability to the departments of banks and members of the Board of Directors, it is also working to develop regulations regulate the issue and distribution of rights and responsibilities, and enhance the confidence of stakeholders and stoke their role, as well as overcome the difficulties facing the application and implementation of mechanisms in the financial and banking institutions in Iraq.

He said that the challenges facing the governance can be summarized weak and limited attention to internal and external governance mechanisms and the lack of private tests-pressure units (Stress Testing), which is part of the culture of governance, as well as the lack of specialized units in Iraq's financial and banking institutions take responsibility for follow-up and implementation of the rules legal regulations within their organizational structures.

The importance of integration

Shammari stop when another very important topic represented in the banking merger, which is banking complementary involuntary aims to increase the competitiveness of the new entity banking resulting from the two entities bankers close together in agreement to get the benefits of both, after the merger, where the new entity a higher capacity and greater efficiency on the achieve the goals they must be realized.

He said the merger leads to a range of effects and results positive if Maatmt successfully integrate the process, as it may lead to a range of effects and negative results, if not successfully, but can integrate access to quality banking service must provide a variety of means in the forefront of the philosophy that believes in administration Bank and adopted in its treatment with

This means the banking merger agreement between the two banks or more to include all its resources and its union in a single unit so that the product would become a single entity with a separate legal personality for the banks that merged and thus independent legal personality.

And the positive effects of the merger of the banking Shammari said that the transmission of financial disclosure leads to the capital increase and the high rating the merged banks and improve the technology and banking services base.


Shammari said the importance of integration is reflected in the revision of the structures of the Board and their responsibilities and powers granted and make sure that the board members are fully qualified to occupy their jobs, and to strengthen and promote the work of boards of directors to be independent and based on the market (any market controlled companies), as well as the boards of the administration's commitment legally from by the central bank to recognize the rights of all stakeholders in the banks.

The integration process is also working on drawing Iraqi model rejects corruption and spread a culture of integrity and the preservation of the private bank system and in order to prevent a financial collapse which must be applied proper accounting principles in order to create confidence in the new, as well as the development of infrastructure sector private and government banks.


He concluded Shammari to say: that the direction and guidance of regulatory authorities with respect to banks, corporate governance practices should be binding execution by the boards of directors and senior management, so as to ensure risk reduction and increase the frequency of returns and the protection of shareholders' rights, calling on those in charge of banks and financial institutions to put an Arab model of governance banks and financial institutions would take into account the environmental conditions of the Arab banking reality.

© Al Sabaah 2016