3rd Annual GCC Regulators Summit Culture Change Management

Kit StevensonHead of Human Resources

2 March 2009

1 What is Corporate Culture

• Corporate culture is:– the way we do things around here– the grease between the gears that makes

the gears work in unison with one another- if you don't have culture, the gears come grinding to a halt. -MERCER

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2 Context for Culture Change

• Current Environment

– Relationship of financial crisis to a culture of short-term profit / risk taking

– Nationalisation of firms and popular calls for changing the way business is done

– Re-evaluation of regulatory approaches (rules based / principles based) Basel II?

– Multicultural GCC environment (QFCRA 23 nationalities)

– Tough times - deliver value (increased performance) through culture

– Manage risk

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3 Current Trends / Guidelines

• Trends / Guidelines

– Culture of compliance and effective risk management is critical

– The culture of short term annual bonuses in financial services is over. Incentive pay is being structured toward longer-term arrangements (deferred compensation) ie over a period of 3 years, where longer term risks and company performance can be assessed, and claw back measures implemented. (Reuters)

– Institute of International Finance (IIF) The Principles of Conduct for Compensation: Lists 7 principles to follow in remuneration

• Performance based incentives with long-term focus• Incentives should not induce excessive risk taking• Payout should relate to timeline of risks undertaken• Incentives should be at risk and be linked to firm performance

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4 Culture Change Process

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THANK YOUKit Stevenson Chartered FCIPD

Head of Human ResourcesQatar Financial Centre Regulatory Authorityk.stevenson@qfcra.comwww.qfcra.com