CIBC announced today that it is investing an additional $50 million to implement sweeping governance and reputational risk initiatives designed to reduce risk and provide the bank with a competitive advantage in a rapidly evolving regulatory and business environment.

Among the initiatives introduced today are:

  • Mandatory online training for all of CIBC’s 37,000 employees on Global Reputation and Legal Risk;
  • Advanced training for 1,200 employees who are involved in complex financial transactions; and,
  • An ethics hotline that will be established later this month so that employees can anonymously report any irregularities observed in day-to-day business practices.

These measures are in addition to numerous other control and governance activities undertaken over the past four years, as referenced in the attached appendix.

“Our reputation is at the core of everything we do — it affects how we are viewed by all of our stakeholders and it affects every aspect of how we do business,” said John Hunkin, president and CEO of CIBC. “As such, we see this investment as critical to CIBC’s success. When complete, we believe CIBC’s governance and reputational risk policies will meet, or exceed, those of any other financial institution in North America.”

Some of the initiatives underway stem from the company’s agreement with the Department of Justice and commitments made to the Office of the Superintendent of Financial Institutions and other regulators. Others result from a special task force that CIBC commissioned in 1999 to provide recommendations on governance, many of which have already been implemented including: separating the Chairman and CEO role; separating auditing and consulting work completed by external auditors; mandating all non-auditing work be approved by the board’s audit committee; expensing stock options to provide greater financial transparency to investors; pre-disclosing the intent of the CEO to trade CIBC equities; enhancing the mandates of all board committees; establishing a direct reporting relationship with the Board audit committee and the shareholder’s auditors; and, launching a global program to strengthen financial controls.