Interview transcript: Mike DeNoma, President and CEO, Chinatrust Commercial Bank, April 18th, 2011 – Part 1 of 2

By Editorial

Mike DeNoma, president and CEO of Chinatrust Commercial Bank, discusses the importance of objective and direction, working with a Chinese institution, and making multi-level working relationships succeed.

1. Importance of objective and direction

Emmanuel Daniel (ED): We are very pleased to be able to speak with Mike DeNoma, one of the world’s most experienced retailers who then eventually became a banker and had a distinguished career in Standard Chartered Bank, where many professionals owe their allegiance and their careers to you, where you made a lot of careers work. And today, chairman of Chinatrust Commercial Bank. 

Mike DeNoma (MD): It’s great to be here, and I particularly appreciate that on a Friday afternoon at 4:00 that you’re here in the audience. But I also am quite happy to be here because if there’s any group of bankers that I’d prefer to be with, it would be Asian bankers, because the world has changed, and I think that over the next decade, certainly, at a minimum, it will be Asian bankers that really drive the world banking industry. 

ED: When we spoke about this session just a few days, and that was only a few days after that long run that you had from Kaohsiung to Taipei, 400 kilometres, 60 kilometres a day, how is your body doing today?

MD: It’s good that it’s two weeks later, because otherwise I probably would have had to crawl up to this stage. The race itself was to really help promote awareness and raise funding for anti-child pornography laws. Currently, in the world today, there are 196 countries; of those 196 countries, 89 of them have no legislation at all against child pornography. And it’s a very serious issue. Maybe I’ll talk about it a bit later, but that was the impetus for me doing it. I had trained up to do 160 kilometres for this cause in New Zealand on March 26, but it was a single race of 160 kilometres, and the opportunity came up to actually run from Kaohsiung to Taipei, that’s 400 kilometres.

So I have a coach. I called him up, I said “I have this chance to actually run the length of Taiwan. I think it will help raise awareness more. What do you think?” He said “well, you trained for 160 kilometres, This is 400.” I said “yeah, yeah. It’s a little longer”. He goes “yeah, it’s a lot longer.” He said “I don’t know, good luck. I’m not sure what will happen after day four”. So it’s 400 kilometres. Only three people did it. 

(To cut) a long story short, we got into Taipei, and we ran through the finish line together. There’s all kind of movie stars and media, nothing to do with me, all to do with this other guy. But what you find is in getting through a race like that - it’s a bit like life, and it’s a bit like business - is that many times, it’s not the ultimate goal that’s the objective, it’s the direction you’re going. 

And as long as you can get satisfaction out of moving in that direction and recommitting at each point, then you can get through things like this because at the end of the race, there is no big party or goal. And child pornography for me is quite emotional. I think in the world of black and white, this is evil. It’s just evil. I became aware that a number of years ago, my sister called me and she said you won’t believe how terrible this is. And I went to Washington, DC, and I looked at some of the facts on it. Child pornography used to be in basements with people trading pictures. 

It was quite small, mainly with the paedophiles. And because the internet now is out there, this is the dark side of the internet, and the deviance has become validated. As part of that is that the kids have become younger and younger and the images more violent. 30% of the child pornography images on the internet now are of children under three years old. And there are even infants being raped on video. So a cause like that, it’s worth fighting for. And once you know about something like that, can you stand back? Can you have an attitude of well, I don’t care? So that’s what I did it for. 

And what we’re going to do is if any of the bankers here or any of the suppliers, we will be forming an Asian Pacific sort of financial coalition to help get some of these laws changed. So that’s the gist of it.

ED: Did they miss you at the office while you were away?

MD: Interestingly, for me it matters where I work. Chinatrust, when I was looking for alternatives, I had a number of alternatives around the world. Some much larger institutions, but Chinatrust for the last 25 years has been supporting orphanages around Taiwan. They do tremendous efforts on behalf of children. So this is right up their alley.

2. Working with a Chinese institution

ED: You left Standard Chartered as an executive director in 2008.

MD: Yeah.

ED: Then it took a year before you found this position.

MD: Well, I mean, Standard Chartered was a very good run for me. I didn’t get the overall CEO twice in a row, so I figured out I probably wasn’t going to get it. But it was a great run. It’s a great company. There was a year of gardening leave the way these things work, and I’m not the type to interview for a job when I’ve sort of got one. 

Greater China is the play, and there will be an expectation of global Chinese banks. But in a G2 world, there will be global Chinese banks. 

ED: How long did it take you to become comfortable with Chinatrust as an institution with the people, culture?

MD: Well, interestingly, when I first went to the bank… what I like to do at any institution is I like to try and listen for the heartbeat. What’s the essence of the place, because you can’t put your own vision in. You need to respond to what an institution feels. So I went to each of the branches, and I went to different departments, and I said, “What is the culture of the place? How does this operate?” Branch after branch, department after department, people said “we believe in two things:  we believe we should be leaders, and not just in market share but in serving the customer, and we believe in teamwork. 

I said “fantastic!”, because you can’t put that in after the fact. So on those two things I was sold. 

ED: The fact was also that Chinatrust was already the leading retail bank in Taiwan. And it had a good run in credit cards and all of the core retail products. So when you went into the bank, what did you see yourself adding value to or trying to take it to the next level?

MD: Well, it’s a domestic champion, but it really didn’t have the confidence, the ambition, or the management and business model to expand outside. There were 10 countries. We’ve got 11 countries in total. 

ED: And you had that role in crafting that?

MD: Yes I did, so we put in a new mission, vision, values, and goals; ten years. The vision is to be the first truly international Chinese bank in history. The mission, which I think is very important, is a mission of a company I think needs to answer the question what good are you going to do and for whom in society? You can’t have a mission to be big or profitable, I think. The values, just three. It’s easy to remember three. 

ED: One of the things that people who knew about you but did not really get to interact with you when you were at Standard Chartered, one of the questions they would have asked was how much time do you spend actually working, and how much time do you spend running?

MD: Until 2005, I had never did any of this stuff, and it’s a story I’ve told before. But I used to promote the Standard Chartered marathons, put all those together. 

ED: When you were in your 40’s, who were your role models? Who were the men or women that you looked up to?

MD: Well, I’ve had some great bosses through the years. I had a boss at Hutches and Whampoa, a guy called Simon Murray. He was a fantastic boss. He was French Foreign Legion and just a terrific guy.He took you seriously, but he didn’t take himself seriously, which I think is important in life. I’ve had some good bosses through the years. A good boss allows you to make mistakes because that’s how you get experience. If you don’t make mistakes, you don’t get experience. So I’ve had some good bosses. I had a great boss when I was at Proctor & Gamble where I started my career, and then I went to Pepsi. I remember my Pepsi boss called me in for my first review, and he said “Mike, I’m not dissatisfied with your performance, but I’m unsatisfied with your performance”. I said “what the hell does that mean?” 

But it was good. He was a pretty knowledgeable guy. I’ll tell you one more anecdote about him, because it was funny. One day he calls me, and he goes “okay, Mike, who is the jerk, this is on video, if you can think of a more colourful word than jerk, it begins with an A. Who is the jerk on the floor that everybody hates?” I said so and so. And he goes, “absolutely right”. Then he goes “one thing to remember in life, if you don’t know who the jerk is, it’s probably you”. 

But it was quite funny because he goes “that’s why you should never try to get rid of the jerk on the floor or in your department, because every department or floor needs a jerk”. I always thought of him as a very wise professional. 

ED: Part of the reason we are having this conversation is that I think that in the banking profession when you tie it all down in terms of the skills there are in the profession, in terms of the reward there is in the profession, and what motivates a professional, you are out of the charts in terms of what gives you the kick. At the same time, we need to try and figure out what should be the value system. Take out the regulators, take out Basel III, take out governance and so on, and when we come to the individuals and the way in which we spar each other and peer each other, who are your peers today? It’s a bit of a complex question when it comes to you because you have that whole cost for living dimension to you. 

Then you have the professional dimension. I asked my staff to pull out the data on Chinatrust, and the numbers are looking good. So it’s not as if you’re not pulling the franchise together and making it work. So there is work being done in that sense. So how do you create the human dimension that is outside the rules, the laws, the regulations, the nuances, but its people dependent in terms of –

MD: Yeah. A couple of things; one is people just don’t work for salary. I don’t think anybody does in life. A lot of executives forget that. Life is short, and life doesn’t have meaning. You have to bring meaning to it as an individual. That’s why it’s important where you work. So one of the things I think is important, certainly, for any type of company, is that there has to be more than just your salary that you’re going for. 

3. Making multi-level working relationships succeed

ED: Well, now that the economy’s coming back, we’re all about money all over again, and the rewards structure hasn’t been fixed just now. 

MD: I think what’s happened is – let’s call them the three sisters – the three sister banks. I worked at two of the three sisters as a hint. But let’s just take the three sisters. The three sisters are getting a bit old. The financial crisis has had an effect on them in some ways.

ED: In the organizations where you have worked, including your current organization, how are you viewed by board members? When you walk into the room, do they look at you from the side, or do they envy you being a larger-than-life personality?

MD: I was on the Standard Chartered board for a decade. They had a nice going away party for me, and one of the older directors that has since retired, he said, “Mike, I tell you what we all appreciated from you more than anything is you would absolutely give us the straight message that what is going on; what’s good; what’s bad; what is absolutely the straight message.” I deal completely straight with boards. The way I talk up is the way I talk down. It’s the way I talk to you; it’s straight. 

ED: Does that always work? Because sometimes you need to get things done.

MD: Well, I would say on the political savvy gamesmanship scoring, I don’t do very well, historically. 

ED: Would that be a reason why you didn’t make the Standard Chartered CEO slot?

MD: It’s either that, or I’m not British, I think. The way I look at that is the candidates that did get the jobs were good candidates. I’m not a toys in the corner; no hard feelings. Frankly, I wouldn’t have wanted to move to that particular place, and I probably would have closed it down and moved everything out here. But it’s fine. They were good guys. It’s a good bank. Life is short, and buses come along every ten minutes. You get on with it.

It was a good run. I had a wonderful experience there. It was great to be able to redo the brand and be a big part of the values, and just build the franchise. There was a dramatic increase in the franchise. 

- Continues in Part 2

Categories: China, Retail Banking
Keywords: Mike DeNoma, Chinatrust, Standard Chartered
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