AIBA The People Side of Risk Management & Compliance Lindamarie Werntz Coatman U.S. Head of Human Resources China Merchants Bank New York December 3, 2014

The Dynamics of an Organization Individual Group Boom Home Country Boom U.S.A. Organization Bang NY-ZXK.540/020619YjmedSL1

How Do People Drive the Organization? NY-ZXK.540/020619YjmedSL1

Where is the risk? Operational Risk Market/Reputational Risk Financial Risk NY-ZXK.540/020619YjmedSL1

The Mechanics of the Organization Group Individual

The 3 Drivers of the Talent Engine NY-ZXK.540/020619YjmedSL1

Organization/ Executive The Mechanics of Talent Organization/ Executive Group/ Manager Individual/ Staff

Effective risk ownership depends on everyone understanding what their risk-related responsibilities are, knowing how to carry them out, and having recourse to appropriate guidance if and when the “standard” risk management processes break down.* * Deloitte, “The people side of Risk Intelligence” NY-ZXK.540/020619YjmedSL1

Professional Skill Base Employee Attributes Employee Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Individual Driver Individual/ Staff Capacity Capability NY-ZXK.540/020619YjmedSL1

The Drivers…. Staff Employee Core Knowledge Processes The Details Risk Execution NY-ZXK.540/020619YjmedSL1

Professional Skill Base Employee Attributes Employee Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Employee Attributes - Staff Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Group Driver Group/ Manager Leadership Performance NY-ZXK.540/020619YjmedSL1

The words and actions of employees’ immediate supervisors have an especially important impact on employees’ own behavior; boards and executives need to monitor the “tone in the middle” so that managers are along the chain of command know to “walk the talk” of ethics.* * Deloitte, “The people side of Risk Intelligence” NY-ZXK.540/020619YjmedSL1

The Drivers…. Manager: Client Service Business Acumen Communication Risk Management NY-ZXK.540/020619YjmedSL1

Professional Skill Base Employee Attributes Employee Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Employee Attributes - Manager Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Organization/ Executive Organizational Driver Business Organization/ Executive Objectives NY-ZXK.540/020619YjmedSL1

The Drivers…. Executive Team Building Strategy Risk Culture NY-ZXK.540/020619YjmedSL1

Professional Skill Base Employee Attributes Employee Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Employee Attributes - Executive Professional Skill Base Experience Level Team Skills Communication Skills Self Initiative Resilience Adaptability Influencing Skills Cultural Awareness

Success Levels: A Different Perspective Business Objectives (Executive) Leadership Performance (Manager) Capability & Capacity (Staff) Individual Contributor Competencies Performance Management Employee Development Ownership & Accountability Leadership Competencies Contingency Planning Performance Management Ownership & Accountability Balance Scorecard Succession Planning NY-ZXK.540/020619YjmedSL1

The Dynamics of an Organization Individual Group U.S.A. Home Country Organization ** To protect the confidential proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of the presenter. NY-ZXK.540/020619YjmedSL1