The consulting revealed that management executives were overloaded with responsibilities that extended beyond their core duties, such as personnel and compensation management, to include unrelated tasks like operating IT systems, managing internal accounting, and credit sales. The FSS pointed out that such a structure could lead to conflicts of interest and result in merely formal compliance with management obligations.
In the financial services sector, many instances were found where the division of roles among executives was unclear, or where the same tasks were redundantly assigned. Some companies assigned credit review and product management responsibilities to multiple executives without clearly delineating their respective areas of accountability.
The manner in which responsibility structures were documented was also criticized as inadequate. Many entries were written in vague terms or repeated phrases, making it difficult to ascertain the actual scope of each executive's responsibilities. Some documents included irrelevant details, such as mixing IT operation responsibilities with electronic financial tasks.
Additionally, the FSS emphasized the need for effective internal controls to prevent conflicts of interest, as issues identified in the pilot operation of responsibility structures for financial investment companies and insurers last May, such as dual roles for CEOs and board chairs, were also observed in this pilot operation.
Financial firms that received the consulting results are expected to submit improved responsibility structures by July 2, taking into account their organizational frameworks.
The FSS stated, "Given the identified need for improvements in the responsibility structures of major specialized credit finance companies and savings banks, we anticipate that smaller firms, which are set to implement similar structures in the future, may also face practical challenges. We will continue efforts to ease the burden on financial companies while enhancing the accountability of senior management, ensuring the effective implementation of the system without undermining its efficacy."
* This article has been translated by AI.
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