Maybank Group’s Chairman Datuk Mohaiyani Shamsudin and Group President and Chief Executive Officer Datuk Abdul Farid Alias share their views on 2018 developments for focus areas under the purview of the Board of Directors, including long-term value creation for shareholders, compliance management, succession planning and the Group’s sustainability agenda. As part of the Board’s oversight on how the Group Executive Committee manages Maybank Group, the Board emphasises that the organisation remains true to its mission statement of Humanising Financial Services and ensures that all efforts throughout the organisation are founded on this mission.
A mission acts as a moral compass for an organisation. It tells you what your goals and values should be. It also serves as a constant reminder of why you exist and what your purpose should be. In this case, Maybank Group’s mission of Humanising Financial Services is the backbone behind the Group’s overarching strategy, in how Maybank approaches the delivery of its products and services and in ensuring that we uphold sustainable practices that consider the wider impact we have on all our stakeholder groups, such as customers, business partners, communities, investors, our people and regulators.
As custodians of Maybank Group’s shareholders’ interests, the Board seeks to ensure that the organisation is pursuing a business strategy that enables long-term value creation in a rapidly changing operating landscape. Not only does the Board continuously review and deliberate internal papers covering all aspects of the organisation’s development, we also provide close oversight on the Group’s performance drivers and rewards to shareholders. We are proud to say that Maybank has delivered another year of record profits against a volatile operating environment that posed many challenges domestically and globally. Maybank Group achieved a new high in net profit of RM8.11 billion for FY2018, exceeding the RM8 billion mark for the very first time. On the back of our strong earnings, the Board is recommending a final dividend of 32 sen per share for FY2018, which will bring our full year dividend payout to 57 sen per share, or a total dividend payout of RM6.27 billion. Arising from our strong dividend payout, our dividend yield was 6.0% in FY2018, making us one of the highest dividend yield banking stocks in Southeast Asia.
Another area of continued focus for us in 2018 was the strengthening and institutionalising of the compliance culture Group-wide. We, as the largest financial institution in Malaysia and with a wide footprint across the region, need to ensure that we are doing our part to continuously enhance our capabilities in combating financial crimes such as financing of terrorism and corruption, money laundering and any other illegal activity, due to rapid technological advancements. While we look to improve our compliance management and monitoring processes, we also need to find better ways of implementing these enhancements so that we do not end up inconveniencing our customers through added compliance processes. Meanwhile, to ensure that our people understand the importance of the compliance agenda and the impact it has on the Group and its stakeholders, our employees were given a series of refreshers on the Group’s Code of Ethics and Conduct, key regulations and a compliance culture assessment to gauge the level of compliance awareness within the Group. The Board does give compliance risk management the highest level of attention, as demonstrated with the establishment of the Compliance Committee of the Board in 2017.
Succession planning, as part of our Corporate Governance oversight, is another priority for the Board. We undertake a thorough and regular talent pool review for Maybank Group’s non-executive directors, to ensure that we are able to maintain a robust, knowledgeable and diverse board composition at any given time. We currently have 10 non-executive directors, of whom eight are independent. Joining our Board in 2018 as independent non-executive directors were Che Zakiah Che Din, Fauziah Hisham and Shariffuddin Khalid. Fauziah brings with her an impressive financial services background, having served in multinational banks while both Che Zakiah and Shariffuddin’s extensive experience with Bank Negara Malaysia add to the Board’s regulatory insights. While we strengthened our board composition with the addition of new board members, we, unfortunately, said goodbye to one director in November 2018. It is with deep sadness that we inform our shareholders of the unexpected demise of Datin Paduka Jam’iah Abdul Hamid. We will continue to review the non-executive directors’ talent pool to build on our current combined expertise and adhere to the Group’s Inclusiveness and Diversity Agenda. Women representation on the Board is currently at 36% and we have two board members of foreign nationality, Edwin Gerungan from Indonesia and Anthony Brent Elam from the US. Aside from looking at the Board’s succession planning, we also rigorously and consistently review the succession pipeline of the Group Executive Committee members and their immediate direct reports, as well as the appointments of senior officers, to ensure the organisation’s longer-term sustainability.
For the fifth consecutive year, Maybank has retained its “A” rating by MSCI ESG Research. The ratings are constructed based on 37 key ESG issues, which include climate change, human capital, product liability, social opportunities and corporate governance, among others. Maybank’s strength in attaining this ranking is anchored on our mission of Humanising Financial Services, as we have been recognised for our customer centric initiatives. This includes ensuring that our retail customers’ rights are looked after and managed by the Group, providing help to financially distressed customers (i.e. affected by floods, among other natural disasters) through loan modification programmes and being one of the regional leaders in providing digital banking services to customers in ASEAN, including the underbanked segments. Although we have achieved recognition in some aspects of our ESG efforts, we are still on our journey of charting a more robust sustainability agenda with refinements to our ESG practices. In formulating the thinking behind our sustainability structure that addresses ESG concerns, we asked ourselves questions such as “What type of impact do we want to make and what type of relationships do we want to have with our various stakeholder groups?”, to ensure that the outcome serves our mission. Ultimately, financial success requires us to identify and address ESG considerations that present risks and opportunities for our business. Furthermore, the Board of Directors regularly reviews the Group’s sustainability implementation progress and ESG developments. While we initially established a Responsible Lending Guideline in 2015 to manage ESG risks, we subsequently expanded this into an ESG Risk Management Framework and endorsed it as a Policy in 2018, following the Board’s approval. The Policy was operationalised throughout the Group in 2018, with ESG risk assessments integrated into our day-to-day decisions in relation to financing practices.
To integrate sustainability into our core business, we focus on impact-based solutions and on empowering communities. We empower the communities in markets where we operate through targeted social investments, employee volunteerism efforts, and long-term partnerships. It makes sense for us to mobilise initiatives in the markets we serve, as our Maybankers can then be directly involved and build stronger bonds with communities in the locations where our outreach programmes are held. Our community investments are managed by Maybank Foundation, in line with priorities identified under the Maybank 20/20 Sustainability Plan. We continued to channel about 1% of net profit to corporate social responsibility programmes in 2018. One of our flagship community empowerment programmes is Reach Independence & Sustainable Entrepreneurship Programme (R.I.S.E.), which is meant to build the capabilities of the differently-abled through a structured training and mentoring programme. Carried out in Malaysia, Indonesia and the Philippines, R.I.S.E. was able to reach and train 2,901 individuals in 2018, bringing to a total of 5,731 individuals trained from September 2014 to December 2018.