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FDIC Provides Corporate Governance Guidance to Community Banks

by   |   April 24, 2016

The FDIC issued a special edition of Supervisory Insights, “A Community Bank Director’s Guide to Corporate Governance: 21st Century Reflections on the FDIC Pocket Guide for Directors.” This special corporate governance edition reviews the Pocket Guide and incorporates more recent guidance and technical resources to help board members effectively fulfill their role and duties.

The commentary highlights key governance concepts, roles, and responsibilities of directors and senior management, and discusses how FDIC examiners evaluate governance at community banks. A list of resources, with links to regulations, guidance, and training materials, is included.

According to the FDIC, directors of community banks need not perform management functions. The Guide states “Generally, directors need not be actively involved in day-to-day operations; however, they must provide clear guidance regarding acceptable risk exposure levels and ensure that appropriate policies, procedures, and practices have been established. Senior management is responsible for developing and implementing policies, procedures, and practices that translate the board’s goals, objectives, and risk limits into prudent operating standards.”

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