When enlisting the help of a board to aid in the decisions of an organization, it is important to ensure they are suitably engaged. A deferential attitude can result in regulatory fallout for directors and the institutions they serve. Most lawsuits brought by the FDIC in the wake of a bank failure are brought on the basis of the board being “asleep at the switch”.
See the following tips to consider implementing to make sure your board remains engaged to oversee the bank’s management:
- Your board should reflect the make-up of the bank’s customer base and the communities it serves. A diverse group of directors representing the predominant industry groups in your bank’s market will ensure that your board has the appropriate expertise and understanding of the unique issues facing the bank and its customers.
- Choose a strong but thoughtful chairman. While it is important to select a chairman who is not afraid to make decisions, that person should also be open and thoughtful to differing opinions and not discourage robust discussions.
- Maintain board visibility during regulatory examinations. It is a good idea to have representatives from the board of directors stop in to see the examiners once or twice during the examination process.
- Don’t let your meetings get hijacked by one issue. It is critical to maintain a manageable agenda and to have appropriate leadership to be able to stay on task during meetings.
To read the entire article, please visit www.bankdirector.com