A Helping Hand

Last week, I attended the Bank Director Workshop sponsored by the National Association of Corporate Directors (NACD) and the American Association of Bank Directors (AABD) in Ft. Lauderdale, Florida.   I had attended the workshop in previous years as an Office of the Comptroller of the Currency (OCC) panelist on the Regulatory Roundtable part of the agenda, but always had to leave immediately thereafter.  Since according to OCC ethics rules, the unpaid exposure to additional banking knowledge at a conference or workshop is considered a gift to a national bank examiner.  A violation of federal criminal law for which a national bank examiner could be disciplined, fined, or potentially face jail time.  I am not making this up!

However, now retired and graciously invited by accomplished author and AABD Chairman Emeritus, Charles Thayer, I was able to attend the entire bank director workshop program.  The program ranged from a lessons-learned discussion of FDIC director suits; trends in board and executive compensation; audit committee issues; bank merger and acquisition trends; the regulatory roundtable; and an impressive presentation by keynote speaker – Charles Vice, Commissioner for the Kentucky Department of Financial Institutions, and the Chairman-elect of the Conference of State Bank Supervisors.

The responsibilities of a bank director continue to be under-appreciated.   It is (normally) a part-time position that, due to being at the apex of the bank managerial pyramid, is ultimately legally accountable for everything that occurs in the bank.  However, the evolving regulatory burden being shouldered by well-meaning bank directors is usually met with a shrug by others – it is what it is, right?

Last year, David Baris, Executive Director of the AABD, commissioned a study to determine the legal touch-points that apply to bank directors.   The study, Bank Director Regulatory Burden Report, identifies over 800 legislative and regulatory provisions that impact bank directors.   In a statement upon its release, Baris explained “It is evident that no one – not Congress or the federal banking agencies – is evaluating the aggregate effect that legislative and regulatory actions are having on the duties and responsibilities of bank directors.”

Director education is an important way of helping bank directors understand and execute their duties.  Low or no cost director workshops are offered by many of the banking agencies.  OCC also sponsors CEO and director outreach events.  Educational booklets and pamphlets are available.  The AABD also offers its own director education curriculum.

But education is one thing, advocacy is quite another. When it comes to the layering on of additional regulatory requirements, as long as bank directors continue to take it, they will continue to get it.  The AABD is the only organization that exclusively advocates for the interests of bank directors.  The AABD's 2013 Advocacy Agenda is both expansive and aggressive.  I'm not affiliated with the organization, by the way, but applaud its efforts and objectives.

Bank directors will find it wise to take the helping hand extended by an organization exclusively devoted to promoting their interests and help turbo-charge the process of pushing back on the regulatory burden being heaped on bank directors.