CIBC Set to Invest $50 Million in Corporate Governance Changes

February 24, 2004, 1:00 a.m. EST 1 Min Read

Canadian Imperial Bank of Commerce announced Monday that it would pour $37 million (C$50 million), into new initiatives aimed at reforming and educating employees on corporate governance. The funding is, in part, forced by a December settlement with federal regulators stemming from its links to the blown-up accounting practices at Enron.

Without admitting wrongdoing in the Enron accounting scandal, CIBC settled in December with the Department of Justice and other regulatory agencies for $80 million.

The company said beside a new mandate that all 37,000 company employees be trained on global reputation and legal risk, a new hotline will be set up in order for the workers to call in with ethics-related questions.

"We will continue to move forward with an increased focus on all aspects of corporate governance, not only because of regulatory requirements but, more importantly, because it is the right thing to do for our customers, employees and investors," said John Hunkin, CEO and president. The statement also mentioned governance reforms the company has made since 2000, such as splitting up the chairman and CEO roles.

The announcement comes as CIBC remains in the thick of the mutual fund scandal. Also on Monday, former executive Paul Flynn pleaded innocent that he helped funnel $1 billion to hedge funds so they could make improper trades.