What Can Bank Directors Learn from Recent Corporate Scandals?
By David Baris It is amazing how varied the response of community bank directors has been to the recent spate of corporate fiascoes involving Fortune 500 companies. In meetings with bank boards throughout the United States, I have observed the sublime to the ridiculous. For many bank boards, the corporate scandals have had no impact whatsoever. Not even a mention in the board minutes. It is as if the tumultuous events of the past year never happened. The attitude seems to be “That could never happen to us.” Other bank boards have reacted in the other extreme. They have adopted far-reaching corporate governance reforms that have dramatically transformed the composition of their boards and committees, and the rules governing them. They now regularly meet in executive session without the presence of the CEO, in some cases breeding distrust and miscommunication. They trust no one – not the CEO, not the CFO, not the outside auditors or attorneys. What are the right lessons to learn from the
