HIRING
TIGHTER FIT?
By Jennifer Lee

Applying to take on the CFO position at a Malaysian bank just got more complicated, with Bank Negara, the country’s central bank, having recently announced that it will “assist” in the vetting of candidates for both the CFO and deputy CEO positions. By “assist”, the bank means that it will help the potential employer gain information on its prospective CFO or deputy CEO that it might otherwise not have access to, such as police records.

The move is only an expansion of Bank Negara’s existing influence over the selection of who runs Malaysia’s financial institutions. It already has the final say over the appointment of board members and chief executives and doesn’t hesitate to use this power. Recently it caused controversy when it rejected the application of Datuk Seri Sulaiman Abdul Rahman, RHB Bank’s director and RHB Capital’s executive chairman, to continue on in these positions. The bank won’t give specific reasons behind its decisions, but said that it is acting in the best interests of promoting and enhancing corporate governance.

Not everyone is thrilled with this strengthening of restrictions. Malaysia’s banks were already among the most heavily regulated in the region. “There’s a possibility that Bank Negara’s honorable stated desire to enhance transparency and corporate governance might inadvertently drive out investors, as well as the most promising Malaysian banking executives, just when Malaysia needs them,” says Bob Otis, managing director of Atlantic Research Technologies, a global headhunting firm that does CFO placement in Malaysia. “There are already many places in Asia to invest, and this new regulation runs the risk of causing the best and the brightest to go to more open markets.”

Not only is the increased oversight a potential problem for prospective CFO and deputy CEO employees, but the additional time it will take for their applications to be vetted may mean the difference between going to a Malaysian bank or going to one in another Asian country. In the case of Sulaiman, official notice of his rejection came eight months after his application was submitted. Granted, Bank Negara says it will not be approving or rejecting candidates, but still, its involvement means one more layer among many in the already bureaucratic world of Malaysian banks.