Financial institutions have faced increased scrutiny surrounding their ethical practices following the Great Recession of 2008. This has placed additional pressure on boards of directors to manage the ethical reputation of the banks they serve. In an article published in the Journal of Business Ethics, researchers Emilia and Sami Vähämaa, Laura Baselga-Pascual, and Antonio Trujillo-Ponce hypothesize that a positive relationship exists between director characteristics favoring effective oversight and the ethical reputation of their financial institutions.Continue reading
Audits can be a headache for any organization. For banks and other companies in heavily-regulated industries, audits can quickly eat up a disproportionate amount of a board’s time and focus. Chartering a specialized committee can ease the headache of routine audits. So let’s take a closer look at everything your board needs to know about audit committees.Continue reading
Policy-making may not be the most fun side of board membership, but it is an absolutely vital corporate director duty. Company policies affect every aspect of governance and decision-making—from CEO selection to board management guidance and beyond.
In a time when expectations for board members are soaring, policy-making has also become a significant way to reduce risk.
According to Mitch Dorger, experienced CEO and governance consultant, boards should be creating a strong policy focus. He writes, “Clear, concise and current policies improve the overall management of the organization…By having these documented, …[the board] speaks with one voice—avoiding a problem that many organizations have with multiple sources of policy guidance.” Unfortunately, many boards struggle to maintain a policy focus.
Dorger continues, “When I was still a chief executive officer, I led an effort to get my board to establish and document the policies that were needed to govern the organization…When I talked to the board about creating a policy focus, there was some confusion about what policies are and what they are not.”