The Swiss financial market regulator FINMA has launched enforcement proceedings against Raiffeisen and its former CEO, Pierin Vincenz, for their alleged failure to address conflicts of interest. The company resigned from its board and pledged not to seek positions of responsibility in other financial institutions. However, the case still lingers and will be resolved by the end of 2018. While the situation is still being investigated, the regulator is hopeful that the current board of directors will be able to remedy the situation.
FINMA’s findings have been met with criticism by the Swiss banking sector. The firm has implemented a number of measures, including appointing an independent auditor to monitor implementation. FINMA also ordered the renewal of Raiffeisen Switzerland’s board of directors. The board will be strengthened, with new members representing the majority of its shareholders. In addition, FINMA’s recommendations will require the bank to strengthen its internal controls to prevent conflicts of interest.
FINMA’s investigation into Raiffeisen Switzerland was first announced in October 2016. The regulator appointed an audit agent to investigate the company’s governance structure. The resulting findings triggered a number of actions, including the appointment of an independent auditor to oversee implementation. The commission also ordered that the company’s board of directors be renewed. The renewal of the board of directors will further enhance the company’s efforts to improve its corporate governance.