On January 1, 2016, the UK-based Cambridge IF Analytica launched Cambridge Cases – a series of case studies on businesses and phenomena in the financial services industry.
It is not surprising that it has just released its first case study entitled “Should he have resigned for that Facebook post?” highlighting resignation of one of the most prominent Islamic bankers in Malaysia – Badlisyah Abdul Ghani.
“Social media related dismissals are on the rise and we deemed it important to highlight this issue in our first case study, which we are publishing under Cambridge Cases,” said Dr Sofiza Azmi, CEO of Cambridge IF Analytica.
On July 8, 2015, Ghani, then CEO of CIMB Islamic Bank, courted controversy when he posted, using his personal account, on Facebook content related to the financial woes of state investment fund 1MDB. The post drew the attention of his employer and the bank quickly announced that an internal inquiry would be conducted into Ghani’s comments, saying that it was a technical matter that he should not have commented on.
Within a week of the incident, the bank released a press statement announcing the resignation of Ghani as the CEO effective August 15, 2015.
1MDB (1 Malaysian Development Berhad) is a state investment fund. On July 2, 2015, the Wall Street Journal (WSJ) published a story on financial irregularities in 1MDB and bank transactions implicating the Malaysian prime minister in a RM2.6 billion ($696 million) scandal.
Ghani – a compulsive social media user – rebutted the claims of financial embezzlement on part of the prime minister on technical grounds. In his personal Facebook post of July 8, 2015, he questioned the authenticity of the WSJ story by suggesting that the SWIFT codes mentioned therein were inconsistent and that it was likely that the story was based on falsified documents rather than real facts.
Later the same day, he admitted to have made an error in his analysis, stressing that the views were strictly his personal opinions. Within one week of the erroneous Facebook post, Ghani surprised the Islamic banking and finance industry by announcing his resignation as the CEO of CIMB Islamic and relinquishing his position as a board member.
Freedom of speech
The Cambridge IF Analytica’s case discusses this issue in an interesting style.
Social media has become the forefront of a radical workplace shift. There are increasing stories of employees fired because they posted something inappropriate or against the company policy on their personal social media pages.
However, in the case of Ghani, there was nothing indecent, inappropriate, racist, sexually motivated or politically incorrect. He was merely expressing his freedom of speech. This issue could have been tackled in one of three ways.
First, since he was expressing his opinion—which he’s entitled to—on his personal Facebook page, it could have been ignored altogether.
Second, because he arguably damaged the company’s reputation by producing a technically incorrect analysis in a public forum, some sort of disciplinary action – making a note in his personal file, or suspending him from work with or without pay – could have been sufficient.
Third, his employer could have fired him, which is what effectively happened when he “resigned.”
The case highlights all these issues and many more, and concludes that there was not sufficient legal case against Ghani for CIMB to terminate his employment contract, following his over-indulgence in the social media with respect to 1MDB scandal. The decision on part of Ghani was at best hasty.
The only credible explanation is cultural. Once the chairman and other influential members on the group level showed their displeasure over the matter, Ghani could not withstand the pressure and agreed to resign.
On the industry level, one must expect that after this high-profile dismissal, most banks will develop their own detailed guidelines on social media (in addition to simple restrictions on the use of social media during office hours). Bank Negara Malaysia is also expected to formalise guidelines on the matter.
Relevance for Pakistan
This Cambridge Case has relevance for policy formation in Pakistan as well. The State Bank of Pakistan does not have any formal guidelines issued to the banks with respect to the use of social media by their employees in general and the top management in particular.
Absence of such guidelines is expected to lead to a high-profile dismissal of a bank employee or those working for other financial institutions in the country.
The Cambridge Cases are going to be used as a pedagogical tool by a number of leading business schools in the world. Therefore, it should be of interest to the newly set up Islamic Banking Centres of Excellence at the Institute of Business Administration (IBA) Karachi, Lahore University of Management Sciences (LUMS) and Institute of Management Sciences (IMS) Peshawar.