MONTREAL, Nov. 30 /CNW Telbec/ - The current global financial and economic crisis was caused by the lack of responsible leadership at the highest levels of some financial services companies, but not by risk-taking per se, according to Joseph Iannicelli, president and CEO of The Standard Life Assurance Company of Canada, speaking at the Canadian Club of Montréal today. He believes that confidence in our financial institutions has been severely damaged and the only way to fix it is through strong, responsible leadership.
Promoting socially responsible leadership - Mr. Iannicelli said that too many financial institutions around the world took on too much risk, in too many creative ways, and if today, we continue to live through economic difficulties, it is because they failed to live up to their moral obligation to maintain their bond of trust with their customers and society.
"We have a duty to cultivate leaders who hold strong values, who understand their responsibility to ensure that Canadians are confident in our financial system; and who are capable of balancing risk, innovation and growth," said Mr. Iannicelli.
He says that in line with the logic of responsible leadership, no institution should be too big to fail, and that we need to be devoutly capitalist, letting the market decide who will survive and who will disappear. Financial institutions led by leaders who understand and respond to their responsibility to the wider community, will survive and flourish.
Fostering responsible innovation -- Every company needs to innovate to remain relevant, and management needs to provide the right mix of rules, guidance and structure to foster creativity.
"Regulation should be the baseline of governance, not a rule book for behaviour," stressed Mr. Iannicelli. "The Canadian system is not broken, so let's not be in too much of a rush to fix it, especially if fixing it leads to less innovation and ultimately, slower growth or lack of competition."
He strongly believes that financial services companies can innovate responsibly without additional regulation by ensuring that the consumer is financially literate.
"Standard Life and the insurance industry are eager to work with governments to leverage our expertise and proven ability to ensure all Canadians have access to a retirement plan and the appropriate financial knowledge that will allow them to live in comfort during their retirement years," added Mr. Iannicelli.
Rewarding long-term value creation - Mr. Iannicelli also recommended that leaders be compensated according to how well a corporation delivers value to its shareholders while meeting objectives that address the interests of a broad range of stakeholders.
"We need to encourage creativity and controlled and well understood risk. We need to ensure strong levels of short and long-term profitability (...) That means that management teams and boards of directors need to do more to consider long-term value creation."
About Standard Life
Standard Life is a major asset managing group originating from Scotland and operating across the globe. Established in 1825, Standard Life provides retirement, investment and insurance products to over 6.5 million customers worldwide. The group has around 10,000 employees across the U.K., Canada, Ireland, Germany, Austria, India, Hong Kong and mainland China. It had $278.9 billion in assets under administration, as at June 30, 2009.
In 2006, after 80 years as a mutual company, The Standard Life Assurance Company demutualized and Standard Life plc was listed on the London Stock Exchange. Standard Life now has approximately 1.5 million individual shareholders in over 50 countries.
In Canada, Standard Life has been doing business for more than 175 years. Standard Life Financial Inc., which wholly owns The Standard Life Assurance Company of Canada, is Standard Life plc's largest operation outside the U.K. With 2,000 employees based in Montréal and across Canada, it serves more than 1.3 million Canadians, including group insurance and pension plan participants. It had $33.7 billion of assets under administration, as at June 30, 2009.
Note to editors: Mr. Iannicelli's speaking notes are posted on
SOURCE Standard Life
For further information: For further information: Ann-Marie Gagné, Manager, External Communications and Public Affairs, Standard Life, (514) 499-7999, ext. 4600, 1-877-499-9555, ext. 4600, email@example.com