Finance Committee on June 12th, 2017

[Andrew Pilkington]

Our sales targets are really the foundation for advice-based conversations. We're looking for our employees to help Canadians save time, save money, and make money. That's what our employees tell us they want, so we believe that having sales targets encourages our employees to have those advice-based conversations.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

My question goes to Mr. McPhedran from Scotiabank.

Witnesses have told us that, when employees do not attain the sales targets set by your company, other employees are informed about it by email or their names are written on a whiteboard. Can you confirm that the practice of naming underperforming employees happens in your bank?

[James McPhedran]

Our goal is clear for everybody in our organization, and that's to treat our people with fairness and respect. We're in the customer business, and an engaged employee base leads to an engaged customer base. The data shows that over 90% of our people say that their manager treats them with respect.

What we've heard here is an opportunity for us to redouble our efforts to make sure people are aware of the internal channels for reporting those types of behaviours if they occur. We have feedback channels, both confidential and not, for those to be escalated. In the last couple of months, we've had 1,000 of our managers, our entire branch management base, together for a couple of days. Among the key aspects we discussed were managing, leading, and what's appropriate. That's our way forward. Treating people with fairness and respect is absolutely core to how we operate.

[The Chair, Liberal, Wayne Easter]

If the others who haven't answered have something to add, please go ahead. I want to give all the banks equal opportunity.

Mr. Wambolt, did you have anything to add other than what your colleagues said?

[Scott Wambolt]

The practices we've been made aware of through the media, particularly fraud and forgery, are absolutely unacceptable to CIBC. Without a doubt, such practices contravene our code of conduct, the ethical and professional standards we require our staff to live by, and anybody engaging in such activities would be terminated. Our code of conduct is clear in this regard, as are the sales best practices we share across our network with our field representatives.

[The Chair, Liberal, Wayne Easter]

We have time for one more.

Go ahead.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I would like to ask the two other witnesses about the code of conduct.

In the last session, we were told that the bank did not consider it a priority to make that code of conduct known to its employees, that they received ongoing training, specifically about confidentiality, meaning the protection of personal information, and about the misappropriation of funds.

That's fine, but do you also provide regular training on this code of conduct, if you have one? Is it public, so that consumers can become aware of the employees' code of conduct in the bank they are doing business with?

[The Chair, Liberal, Wayne Easter]

Mr. Wambolt.

[Scott Wambolt]

Every one of our employees has to take code of conduct training at least once a year and attest to doing so. There are often screen savers on our work stations that remind our staff of key elements of our code of conduct.

[James McPhedran]

I want to be clear on this. Adherence to our code of conduct is non-negotiable. This is understood in our organization. Our employees similarly take courses with respect to the code every year. We have six tenets in our code of conduct.

One of these demands that our employees conduct themselves honestly and with integrity. This means that as Scotiabankers we do not compromise our ethics for the sake of meeting our sales, profit, or other targets or goals. It is very clear.

[The Chair, Liberal, Wayne Easter]

Okay.

Did you want to sum up on this point, Mr. Pilkington?

[Andrew Pilkington]

No, I think the member said he wanted an answer from the other two.

[The Chair, Liberal, Wayne Easter]

All right.

Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you gentlemen for being here with us today.

A lot of the questions are very much focused on the macro level of your code of conduct, what's in the bank's culture. Let's go for a second to the micro level, which is a customer walking into a bank.

I'd like to hear from all three of you. If a customer walks into the bank, and let's say he has modest savings of about $10,000 to $15,000—that's actually a substantial amount. Would a teller at each of your institutions, when looking at his balance, be asking the customer the question, “Have you thought of investing your money?” It's a yes-or-no question.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. McPhedran.

[James McPhedran]

Our tellers have no sales targets. The situation of that customer might lead them to encourage them to meet with our financial advisers. That's as far as it would go.

[Raj Grewal, Liberal, Brampton East, ON]

So that would be a yes?

[James McPhedran]

That would be a referral if they think it's in the best interests of their customer.

[Raj Grewal, Liberal, Brampton East, ON]

The only thing they would know about the best interests of the customer would be the balance itself. In this instance, the customer walks in, has a balance in his account, and the teller, according to your sales training, will recommend that customer meet with an adviser even though the customer has not asked to meet for investment or any investment advice at that point.

[James McPhedran]

We're in the business of engaging our customers. We're in the business of customer satisfaction. Our customer satisfaction levels right now are at all-time highs. If there's a specific—

[Raj Grewal, Liberal, Brampton East, ON]

Not to cut you off, sir, but the customer comes into the bank for a particular purpose. He completes that purpose. Is the teller trained, based on the amount of money in that customer's account, to offer him an opportunity to invest his money? It's a simple yes-or-no question.

Mr. Pilkington.

[Andrew Pilkington]

It really depends on the circumstances. I visit branches all over—

[Raj Grewal, Liberal, Brampton East, ON]

That was a hypothetical scenario. That's the circumstance.

[Andrew Pilkington]

Absolutely, but it does dep—

[The Chair, Liberal, Wayne Easter]

Maybe give him a chance to answer the question.