MFSA: Governance plagued by resignations?

The series of resignations at MFSA in 2016 seems to continue unabated. Last May, maltawinds.com reported on the ongoing resignations at the Malta Financial Services Authority (http://maltawinds.com/2016/05/17/more-resignation-at-mfsa/ ). It seems that the number of resignations continued to escalate, reaching a questionable number of some 30 persons resigning in 8 months. This is equivalent to 11 percent of the staff.

Most organisations go through periods of change and many go through this sort of crisis over the years. Good governance dictates that the reasons for such resignations are thoroughly analysed in order to identify any possible flaws in management style or in the practices of the same organisation. Most resignations at MFSA seem to come from two particular units; the IT department and the Insurance unit.  Both Units seem to have gone through questionable issues.

The IT department has been questioned on many occasions on its lack of performance and its lack of foresight.  This portal has reported on the various issues faced by the IT department including the issuance of a series of incorrect notices (fines) by the Registrar of companies.  Honourable MP Mr Antoine Borg has raised a Parliamentary Question on the matter which obviously remained unanswered.  If the answer was simply that there were no issues, then the Minister for Finance would have had no reason not to reply sooner. Given that the parliamentary question was presented to the Minister on 9 May 2016 and remains to date unanswered, it is obvious that there are issues aplenty. There were other concerns regarding the management of the IT department and the awarding of direct orders to certain companies. Other concerns were also related to the apparent lack of a Document Management System which became more evident to the reply to Parliamentary Question given to Hon Anthony Agius Decelis whereby the Minister for Finance said that not all the information was available.

The Insurance unit went through its own upheaval particularly with the Setanta saga. Indeed, its performance might have caused irreversible damage to the Financial Services in Malta. Malta was severely criticised on the matter; even by Irish Financial Brokers (http://www.adelphi.ie/2014/05/setanta-insurance-company-fail/ ). This unit has had a substantial amount of resignations during the last 8 months – an estimation of 33 percent of the unit’s total number of staff!

The number of resignations at the MFSA in general is at alarming levels particularly in the aforementioned units. It is even more worrisome that resignations seem to have reached even Senior Management positions.  Is there an issue with the way MFSA is being manoeuvred? Is the staff under pressure or is not up to it? Are there serious flaws in the recruitment process? Is the staff uncomfortable with what is happening at MFSA? These are questions that the financial services sector needs to address and provide some assurance on, as plenty can foresee the biggest financial crisis heading towards Malta, partially resulting from what seems to be a lack of good governance.