What Directors Need to Know
by Tom Loy, BOL Guru Guru bios
QUESTION: We have several new directors. What types of subjects should we make sure they're up to speed on?
ANSWER: I would suggest three critical areas:
First is common sense and conflict of interest. Directors should be made aware that their judgment in this area is perhaps the most critical attribute they can bring to the board. My simplest rule for judging problems in this area is "if you'd be concerned about full public disclosure, then there is a strong potential conflict of interest."
Second is regulatory requirements and limitations on banks and bank boards. A director should be made aware of critical banking regulations and of the directors' individual and collective responsibilities therein.
Third is financial review and analysis. Directors should be trained to understand a bank's Uniform Bank Performance Report and the critical components and financial ratios therein.
I would opine that the best news for directors, at least as it relates to the second and third items above, is that the banking regulators provide outstanding and concise training materials and periodicals which are specifically geared to bank directors. See the BOL Web Site Road Maps for the bank regulatory agencies' contents for links to that guidance.
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
Print Friendly!
Email This Article!
Discuss NOW!
