Bank directors are responsible for ensuring sound banking operations by monitoring the conduct, integrity and performance of a bank's management and the bank's compliance to all regulatory requirements. Bank directors serve as watchdogs for the Federal Deposit Insurance Corporation and protect the interests of the bank's shareholders and the financial community in general.Continue Reading
The board of directors develops and implements policies that evaluate a bank's performance. For example, the BOD makes sure that bank management addresses deficiencies pointed out in independent third-party regulatory audits in a swift and appropriate manner. It sets broad financial and operational goals and ensures that the bank has the resources and capability to achieve them. From these broad goals, the BOD and bank management formulate strategic plans that become the basis for detailed departmental goals and plans, which serve as the basis for forecasts and budgets that become the metrics for the bank's performance.
For these reasons, bank directors must attend all BOD meetings, where they discuss various reports and make decisions about the management of the bank. The bank director must carefully read these reports and ask questions that clarify any issue that is vague or unclear. In order to have the ability to render sound objective judgment, a bank director needs to keep abreast of the latest banking rules and regulations, which are issued almost weekly.Learn more about Banks