What Is Management?

Management is the oversight, or governance, of the bank’s affairs. Directors are an important part of that governance, but their duties differ from those of the bank officers they hire. At the director level, you will be involved through your hiring of a competent chief executive officer. Then you will oversee the performance of that CEO through your participation in board of director meetings, review the information furnished to you at those meetings, contribute to the strategic planning and direction of the bank, and establish clear policies that set the risk limits for the bank.

The CEO and other bank officers and staff run the day-to-day operation of the bank, executing the plans and policies established by the board. You and your management team will identify, measure, control and monitor your bank’s risk to achieve profitability and protect its solvency.

This section on management will give you an understanding of your role as a director, along with the roles played by others, providing you with a basic understanding of the bank director’s place in a corporate governance system and the responsibilities associated with being a director.

Lesson Objectives

After reviewing this section, you should be able to:

  1. identify the major duties and responsibilities of bank directors in the governance system,
  2. recognize the reports needed to evaluate and monitor management and
  3. list critical board meeting materials.