Board of Directors Depend On MST

The Federal Reserve has identified active board oversight as a key infrastructure component of effective risk management programs.

Directors demand clear, concise information which accurately depicts the condition of the institution.

With the FDIC now making cases against officers and directors of failed institutions for “risky” behavior, the directors of surviving banks need to be assured their actions will be depicted as safe and sound.

The reputational risk faced by banks extends to board members. Therefore directors should have the proper analysis available to determine the level of this type of risk and how to respond.

When regulators require action, board members should be in a position to easily monitor the bank’s response to required actions.


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