Financial institutions and the press-A A +A
An Independent View
Wednesday, August 20, 2014
THE Philippine American Life and General Insurance Company, aka Philam Life, is a venerable financial institution. It was characterized by stability. Two long serving chief executive officers (CEOs) administered the company for 50 years. The second of these, Jose G. ‘Joey’ Cuisia Jr, who retired in 2009, is now the Philippine Ambassador to the United States of America. Following Cuisia, Philam Life hired Trevor Bull, a Brit who left Philam Life after less than two years. His replacement, Rex Mendoza, previously Ayala’s Marketing Manager, has recently been kicked upstairs and is now a Manila-based Senior Adviser to Mark Tucker AIA’s (Philam Life’s parent company) CEO.
This transfer seems to have been made hastily because Mendoza’s replacement, Estelito G. “Bobby” Madrid Jr., an internal appointee, is billed as an interim CEO. This means he is a stop gap appointee whilst a search for a permanent CEO is conducted. Four CEOs in five years is too many.
What happened which caused Mendoza’s precipitate departure? This is newsworthy, particularly when it involves an important financial institution to which many have entrusted their life savings.
Unfortunately, reporters who have the responsibility of finding the news of banks and insurance companies, are not at the cutting edge of investigative journalism.
In fact, many reporters simply copy, with few if any changes, the banks’ press releases. These anodyne documents are generally not newsworthy. What we read about financial institutions in our newspapers is usually what the financial institutions want us to read.
Philam Life’s recent instability at the top is not emulated by the competition. Riza Mantaring, Sun Life, Rien Hermans, AXA, and Prudential (UK) Asia’s de Rosas are all long-standing CEOs.
Banks’ advertising budgets are used not only to buy newspaper space but also, regrettably and clandestinely, to bully newspapers into only printing material which are acceptable to the advertisers.
Even one of my articles, perhaps slightly less bland than usual, did not meet the approval of a self-important local bank officer who threatened Sun.Star Bacolod with withdrawing its Sun.Star advertising. I am delighted to report that Sun.Star Bacolod did not yield to this overbearing attitude.
What we do see in the press are deplorably sycophantic articles about financial institutions, particularly their advertising campaigns. One such article is that which underpins the recent Security Bank advertising Campaign “You deserve better.” Under the silly headline “Security Bank roars anew” the bank, its celebrity endorser Megan Young, and the advertising agency PC & V Communications Inc. all receive fulsome praise.
As it happens, I bank with Security Bank and have done so for several years. I like the bank but I do not need it to roar. Associated with the campaign is the bogus concept, beloved by advertising agencies, of “rebranding.” This means changing the corporate image. Eventually, image is reality despite what advertisers say. Unless Security Bank is able to rebrand its fine but generally unrebrandable employees, the advertising campaign is misconceived and merely serves to create an inappropriate gap between what the advertising agency thinks should be the image and the less palatable reality.
On the other side of the coin is the ability of financial institutions to bury newsworthy stories. Anything to do with malfeasance is newsworthy. But many such stories never appear and those that do are buried prematurely. The reader is waiting for a conclusion that never comes. Last year’s reports of funds disappearing from the accounts of customers of BDO’s Kabankalan branch is a typical example. We never know what happened. Financial institutions like to bury inconvenient truths and it is incumbent on journalists to prevent this from happening.
Lurking in the background of much sharp practice from financial institutions are convenient but crude measures of bank staff performance. These include targets, bonuses, quotas, and commissions. Regrettably these create profound and unpleasant pressures which challenge the probity of employees representing financial institutions and hence the institutions themselves.
The real point, however, is that due to the weakness of the print media we hear too little about these aspects. Citibank’s Bryan Ang’s case is an example. Approximately P130 million of clients’ funds were allegedly misappropriated. It is in the public interest that the deleterious aspects which include a barkada culture (Ang was not alone) are exposed. Knowing fully what happened, especially when syndication is involved, is vital. If a syndicate takes hold in a financial institution it is able to distort and control communications so that management does not know what is going on. [Unless management is involved which creates a Legacy Group situation where clients pay money but never receive their insurance policies]. This means that dialogue between financial institutions and aggrieved clients becomes meaningless, particularly when the client knows more than the institution.
We have a vigorous and tenacious journalist profession when it comes to pinpointing government corruption. Let us have an equivalently assertive profession in exposing corruption in our none-too-clean private sector financial institutions.
Published in the Sun.Star Bacolod newspaper on August 20, 2014.