In 2009, the governance models of financial institutions came under intense scrutiny, and several fundamental principles are now in question. What should be expected of the board of directors and the audit committee? Will financial institutions be required to establish independent risk oversight committees? If so, who will serve on those committees, and exactly what would be their charter?

Consumer protection rules are likely to be tightened, and executive compensation is the subject of vigorous debate. Authorities on both sides of the Atlantic are seeking to limit executive pay. U.K. and French authorities have called for a tax on bonuses. In the United States, the Federal Reserve is pursuing new compensation principles based on longer-term strategic performance metrics. In addition, significant reform of the banking system is being proposed in the United States as well as a levy on banks’ balance sheets.

While many aspects of the future shape and contours of the financial services industry are unclear, it does seem clear that government involvement will continue for some time, significant regulatory actions will likely be enacted, and financial institutions will likely need to work more closely with government authorities to ensure stability in the financial markets.

The Review highlights the new economic reality, financial services, the business of the public sector and focus on global growth. It also profiles global programs, team members, and citizenship initiatives.

For more details, please feel free to download the KPMG International Annual Review (IAR) for 2009 from the link below.