EFG INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY

Transcription

1 EFG INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY CODE OF CONDUCT Practitioners of the craft of private banking

2 EFG INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY CODE OF CONDUCT 1 OUR BUSINESS ETHICS EFG International (EFGI) is a commercial business, which seeks to maximise profit and growth over time. It believes the best way to do this is to empower its professionals to maximise the satisfaction of clients. For this reason, EFGI operates a distinctive, flexible business model, which allows experienced, entrepreneurial Client Relationship Officers (CROs) the controlled freedom to run their own business and to share in the rewards. This aligns interests and ensures that clients are served without the distortions caused by quotas, internal politics or bureaucracy. EFGI does not set sales targets for its CROs. It is committed to open architecture, enabling CROs to craft the finest solutions for their clients using the most appropriate products in the market ( open architecture ). CROs are remunerated in a transparent fashion on the basis of their profit contribution, ensuring alignment with sustainable value creation. While EFGI seeks to maximise profits in a competitive global market-place, it does not see this as its sole raison d'être. It is mindful of its responsibilities in the countries where it operates (as well as where its clients are located) encompassing often diverse social, political, economic, legal and regulatory systems. Every individual within EFGI is required to adhere to the highest ethical standards; to observe strict compliance with relevant laws, rules and regulations; and to comply with EFGI's internal policies and procedures. 2 OUR ROLE IN THE MARKET-PLACE A modern, progressive and dynamic wealth manager, EFGI has grown rapidly since its inception in It is a business enamoured with the notion of constant forward motion, with a constant imperative to deliver practical benefits to its clients. Its continued success highlights, it believes, the strength and validity of its approach. EFGI is an international organisation, based in Switzerland, but with a substantial and expanding international network. It operates both onshore and offshore, and it continues to open new onshore operations based on the principle of seeking proximity to its clients a key ingredient of any relationship. Its operations benefit from a balanced geographical spread, with no skew towards any one market. Its people - leadership, CROs and teams are diverse and cosmopolitan. And it has local people running local businesses, with an international perspective behind them. EFGI has been a leader in its sector in adopting modern practice in areas encompassing: Open architecture. EFGI CROs are advisers, not sales people. They are driven by one imperative: to craft the best possible solutions for their clients. Since its inception in 1995, EFGI has been committed to giving clients the best solutions available ( open architecture ). It does not compel CROs to adopt particular products or pricing (beyond overall pricing parameters and subject to the safeguard of product-approved lists). The ability to add value in fast-moving and sophisticated fields, notably structured products and alternative investments, is an integral part of this. For this reason, EFGI has developed in-house capabilities to sit in competitive juxtaposition with those of external service providers. It sees this as integral to private banking, and developing expertise to simplify complexity for clients, however, the fundamental principle of open architecture remains. Remuneration. Remuneration of leadership and CROs is linked to profit contribution, with a proportion of this generally paid as stock. This serves to reinforce the prevailing long-term mindset. See Our employees. 2

3 Leadership of EFGI believes that the proper assessment and control of risks are critical for the EFGI's continued success, and it has promoted a culture of strong risk discipline across the business. EFGI has an enviable record of managing risk, and has progressively increased resources in compliance, audit and risk in line with business growth. EFGI has also established best practice in relation to fraud prevention and detection, which is regularly communicated to its employees. As a result, provisions in relation to credit and operations have been - and remain - minimal. As part of a risk supervision framework established by its corporate parent EFG Group, EFGI is responsible for creating and maintaining its own policies and procedures to ensure that various categories of risk can be identified throughout EFGI and controlled by management in an effective and consistent manner. These categories include credit, market, funding and liquidity, legal and regulatory, operational and reputational risk. Ultimate responsibility for the supervision of risk management lies with EFGI's Board of Directors, which has delegated responsibility for minimising risk to various committees. The Compliance Department is responsible for ensuring adherence to all applicable regulations, through appropriate internal guidelines and procedures. More information on EFGI's approach to managing risk can be found in the EFGI Annual Report, available at 3 OUR CLIENTS EFGI believes that, for any successful business, client-centricity must form part of its fundamental core. EFGI was founded on the back of a passionate desire to provide wealthy clients with the level of service they expect and deserve - an ethos which holds true today. Fundamentally, EFGI believes that success in private banking comes down to facilitating a relationship between a professional and a client, which takes time and a conducive environment to flourish. Communication with clients is highly interactive: EFGI is advice-driven, and its CROs seek to craft the right solution for each client, rather than channelling them into off-the-shelf products or services. Any complaints are taken extremely seriously: senior leaders typically seek to get directly involved at the outset. More generally, leaders spend a lot of their time meeting with clients. Courtesy of its distinctive approach, EFGI appeals to high quality CROs, who have long experience and relish the opportunity of working in an organisation committed to private banking. A practical consequence is low employee turnover, allowing clients to enjoy all-important continuity. EFGI is carefully managed to allow entrepreneurialism to flourish. CROs are empowered to conduct the day-to-day business of serving clients, always subject to careful control and supervision. There is a strong, tripartite relationship between client, CRO and EFGI, enabling clients to receive the best of both worlds: a close and long-lasting relationship with an experienced professional, with the support and resources of a global private banking group. To EFGI, the proof is always in the doing. A relatively young business, founded in 1995, it has come a long way in a short space of time. EFGI has enjoyed dynamic growth, which is only possible as a result of attracting and retaining highly satisfied clients. 4 OUR EMPLOYEES EFGI is a cohesive business, with a shared ethos and common values acting as the glue that binds all its employees together: EFGI is a non-hierarchical, meritocratic organisation. Employees are treated as professionals; their talents are nurtured and they are encouraged to flourish in areas where they excel. 3

4 A lean business, EFGI operates on the basis of small teams of high quality employees, offering outstanding added value per capita. EFGI is truly international, and believes its success rests on local businesses being run by individuals originating from - and having long experience of local markets. There is no one prevailing country culture, as can be seen from the diversity of its leadership team, CROs and other employees. Founded by practitioners for practitioners, EFGI has a leadership team with extensive expertise and experience in wealth management. EFGI views its CROs as entrepreneurs, with the controlled freedom to run their business and serve their clients in a way that is right for them. EFGI does not apply product sales targets, stipulate serving particular client segments, or seek to dictate at a micro-level the activity of CROs. EFGI is not a virtual franchise, but seeks to strike the right balance in the blurred territory between autonomy and prescription. CROs are empowered to conduct the day-to-day business of serving clients, but they are not without careful control or supervision. The business also has strong financial controls, monitoring and reporting. Recruitment EFGI knows that talented people are the lifeblood of its business. It recruits individuals with a broad range of skills and attributes, and from leading organisations around the world. It believes its success is closely linked to its employment policy, which is designed to attract, nurture and retain people of the highest quality. The recruitment policy of EFGI seeks to ensure that: Employees are selected for their quality and suitability for the position. There is consistency in the employment procedure throughout EFGI. There is a local control over the number of employees in EFGI. People are employed efficiently and productively. Management of employee recruitment at EFGI is the responsibility of regional business heads, working in conjunction with individuals responsible for human resources. Compensation and benefits policies The Board Remuneration Committee approves the guidelines for EFGI's remuneration policies and the bonus and benefits provisions. The EFGI Executive Committee determines the remuneration policy of EFGI in line with the guidelines approved by the Board Remuneration Committee. Key principles in relation to remuneration are consistency and transparency. Performance-based compensation was rooted in the business from the outset, is applied consistently, and is proven. CROs are remunerated based on their profitability, providing every incentive to do right by clients and to build a sustainable business, without distortionary sales targets. Profit participation arrangements also include a proportion of long-term equity, to reinforce the prevailing long-term mindset. Furthermore, for the senior leadership team, it has always been the case that remuneration comprises salary and discretionary bonus, with the latter typically taken 100% in restricted stock / options (not exercised for a 3-5 year term). 4

5 Equal opportunities EFGI has a policy of equal opportunities. There is no discrimination of recruitment, salary, and bonus, promotion opportunities on the basis of age, sex, race or religious belief. Employee conduct Employees of EFGI are expected to act at all times during the course of their duties in a manner which reflects positively on EFGI. In particular, employees are expected to adhere to the guidelines described in the Employee Code of Conduct which is defined in the General Directive Nr , Code of Conduct with regard to Staff Dealing and Conflict of Interest. The Employee Code of Conduct contains specific provisions relating to the dealing in shares of EFGI and to conflicts of interest. Specifically, the Employee Code of Conduct: Prohibits trading by employees based on inside information. Establishes blackout periods during which additional restrictions are placed on trading in shares by employees. Sets out EFGI's policy relating to conflicts of interest. Training & assessment EFGI is committed to the principle of continual personal and professional self-development. It attracts many highly qualified professionals, and all employees are encouraged to keep themselves up to date with the support of the business. EFGI runs a residential training seminar for all new CROs. The seminar covers topics including: EFGI culture and history; legal, compliance and risk management; products and services; and marketing and business development. Participants are also able to visit the Geneva Back Offices/Training & Product Centres. Health & Environment EFGI encourages the physical and emotional well-being of all its employees. Its worldwide businesses occupy high quality premises and are associated with various local sports clubs and cultural activities, for the benefit of its employees. 5 OUR SHAREHOLDERS EFGI is a public company, and subject to the discipline of the market, with a strong focus on delivering value to shareholders. Courtesy of a prudent approach to managing its business, it is a profitable business, which is very well capitalised and well served by a stable funding structure. To EFGI, private banking is all about relationships, and providing the conditions for them to flourish. Its employees are clearly integral to this, and many are shareholders, committed to the long-term success of the business. In addition, EFGI benefits from the support of a long-term shareholder in the form of family-owned financial group EFG Group. 5

6 EFGI is committed to the timely and accurate disclosure of material issues affecting it including: financial and operating results; key business objectives; changes in major share ownership and voting rights; details of directors and key executives; material issues regarding employees and other stakeholders; and corporate governance policies. EFGI reports its financial results twice a year, with its annual results (as of 31 December) reported in March, and its half year results (as of 30 June) reported in July. EFGI has a dedicated Investor Relations department, based in Zurich, which pursues a transparent and proactive approach to communicating with investors, with regular activity encompassing investor conversations / meetings with senior executives, and participation at road shows and conferences. 6 ON GIVING BACK As a corporation - and as a group of individuals - EFGI believes in giving something back. It believes that it has a social responsibility to help create the conditions for everyone to lead better lives, and takes steps towards this goal through a variety of initiatives: Right To Play EFGI is a Global Partner of Right To Play (RTP), an international humanitarian organisation that uses sport and activity programmes to help deprived children in Africa, Asia, the Middle East and South America. It also gives direct support to specific country projects, with employees providing practical help as well as their own financial contributions. For more information on RTP, visit: Foundation EFGI Foundation EFGI is a non-profit organisation which channels a portion of EFGI's earnings into humanitarian endeavours. Ideas for causes worthy of support are generated both by members of the Foundation, and by employees of EFGI. In addition to charitable giving, the Foundation supports a range of initiatives across a variety of fields, including poverty and healthcare; education; science; the environment; and art and culture. Initiatives are supported on a truly global basis, with funds allocated based on merit and need and with no country preference. The key requirement is that an initiative must be in the interest of the public, and makes a contribution to the well-being of society. Marketing & sponsorship In its approach to marketing and sponsoring, EFGI plays its part in promoting good causes and well-being in society: Through its marketing and sponsoring activities, EFGI looks to reflect the diversity of its clients, a number of whom are inspired by the various sporting and cultural activities that it supports. It also has a diverse geographical mix of sponsorships, in line with the international footprint of its business. In approaching sponsorships, EFGI always seeks to foster a strong sense of partnership and one theme is to support the development of new talent. In its advertising, it is keen to raise the profile and promote the activities of its partners. 6

7 7 EFGI AND THE ENVIRONMENT EFGI views the protection of the environment as a crucial consideration in its approach to business management. It is committed to adhering to international environmental standards in everything that it does. A lean business, EFGI uses its resources sparingly, and encourages its employees to reduce their impact on their environment. It seeks to minimise emissions through promoting smart travel and efficient power usage, and makes full use of modern digital communication. EFGI is currently considering further ways of enhancing its commitment to sustainable development and a reduced carbon footprint. EFG International AG I Bleicherweg 8 I 8001 Zürich I Switzerland I T I F I