x Abu Dhabi, UAEMonday 24 July 2017

Capturing spirit of the times

ADCB catches the global spirit of the times with its proposal to disclose its levels of executive remuneration and the principles upon which those levels are based.

Abu Dhabi Commercial Bank (ADCB) has certainly caught the global spirit of the times with its proposal to disclose its levels of executive remuneration and the principles upon which those levels are based. Bankers everywhere are having to adjust to the new realities of the post-crisis world, in which what was regarded as exorbitant pay contributed to an ethos of dangerous risk-taking. The "casino culture" of some of the biggest banking institutions threatened to tar every banker with the same brush.

On the same day that the ADCB initiative emerged, HSBC also volunteered to base its pay practices on principles agreed by the Group of 20 (G20) developed and emerging nations. For ADCB to walk voluntarily into the same camp is commendable. It is a trend that has been evident at the largest Abu Dhabi bank for some time. Corporate governance and social responsibility programmes are firm features of their financial statements. In fact, alone in the region ADCB already discloses the basic salaries of its chairman, Eissa al Suwaidi, and other board directors on its website. The chairman gets Dh750,000 (US$204,192) per year, while his board colleagues earn Dh500,000.

Such relatively modest sums presumably do not include bonuses, which are the real crux of the problem in the rest of the world. If ADCB is serious about its new initiative, it should disclose total remuneration packages of all top employees, not just directors. A conservatively run organisation like ADCB, with few dollar-guzzling investment bankers on its books, would have nothing to fear from such an innovative move.

@Email:fkane@thenational.ae