Are there any limitations on bank employees/officers serving on boards of customers? We have several officers who serve on boards of corporate customers. I think, as long as they abstain from any issues relating to the bank, we should be okay. Does anyone know of any problems with this?

When I was a commercial lender at a previous institution, I was asked to be on the Board of one of our commercial customers. I respectfully declined due to potential conflicts of interest. I did inform our Board and they subsequently created a policy prohibiting officers from being on Boards of customers (non-profit agencies were the exception). Our Board also felt it could be a conflict of interest.

I believe it would be a financial institution's policy that would govern this. I would be extremely cautious about it, though. I just felt it could create potential conflicts even if you abstain on certain issues. I would also wonder if you abstain on certain issues, are you providing the most guidance and benefit you can or should to that Board?

Our bank prohibits employement with any of our customers and permits other functions only after approval by senior management. For example, I serve on the zoning hearing board (judicial function)of one of the townships in our area, but management has made it clear that I may never serve as a supervisor because of the executive power that is wielded by the board of supervisors.