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Why Your Board Should Stop Approving Individual Loans

September 12, 2017

Authors

Jim McAlpin, Ken Achenbach and Jonathan Hightower

Why Your Board Should Stop Approving Individual Loans

September 12, 2017

by: Jim McAlpin, Ken Achenbach and Jonathan Hightower

In this the new era of banking, our clients are continually looking for ways to enhance efficiency and effectiveness at all levels of their organizations. This line of thinking has led to the revolution of the bank branch and the adoption of many new technologies aimed at serving customers and automating or otherwise increasing process efficiency. Perhaps most importantly, however, banks have begun to focus on optimizing their governance structures and practices, particularly at the board level.

(A print version of this post if

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Counterpoint: Why Sane People Serve as Bank Directors

August 31, 2017

Authors

Jonathan Hightower

Counterpoint: Why Sane People Serve as Bank Directors

August 31, 2017

by: Jonathan Hightower

Bank directors have played a crucial role in the turnaround of the banking industry, an accomplishment that deserves recognition in light of the fact that it has been done under tremendous regulatory burden and tepid economic growth.  Given that, why do we continue to question why the country’s most respected business people would be willing to serve as bank directors?  Respected attorney and industry commentator Thomas Vartanian recently asked in an opinion piece in The Wall Street Journal, “Why would anyone

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Regulators Tackle Board Effectiveness and Overdrafts

August 7, 2017

Authors

Robert Klingler

Regulators Tackle Board Effectiveness and Overdrafts

August 7, 2017

by: Robert Klingler

the-bank-account

On the latest episode of The Bank Account, Jonathan and Ken Achenbach discussed the Federal Reserve’s proposed supervisory expectations for boards of directors.

Before digging into the Federal Reserve’s proposed guidance, Jonathan and Ken first discussed the CFPB’s statistical analysis of frequent overdrafters.  As noted in the CFPB’s analysis, “very frequent overdrafters account for about five percent of all accounts at the study banks but paid over 63 percent of

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Public Banks and Proxy Advisors

July 3, 2017

Authors

Robert Klingler

Public Banks and Proxy Advisors

July 3, 2017

by: Robert Klingler

the-bank-accountOn the latest episode of The Bank Account, Jonathan and I were joined by our colleague, Kevin Strachan, to discuss the role and importance of the various proxy advisory services.  Corporate governance continues to be a hot topic in the industry, and the proxy advisory services have a significant sway in determining what provisions are deemed “acceptable” by many institutional investors.

Within the podcast, we look at the two primary

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Considering a Sale of the Bank? Don’t Forget the Board’s Due Diligence

July 12, 2016

Authors

Jim McAlpin and Michael Shumaker

Considering a Sale of the Bank? Don’t Forget the Board’s Due Diligence

July 12, 2016

by: Jim McAlpin and Michael Shumaker

In today’s competitive environment, some bank directors may view an acquisition offer from another financial institution as a relief. With directors facing questions of how to gain scale in the face of heightened regulatory scrutiny, increased investor expectations, and general concerns about the future prospects of community banks, a bona fide offer to purchase the bank can change even the most entrenched positions around the board table.

So, how should directors evaluate an offer to sell the bank? A good starting place is to consider the institution’s strategic plan to identify the most meaningful aspects of the offer to the

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The Link Between Board Diversity and Smart Business

August 19, 2015

Authors

Jim McAlpin and Michael Shumaker

The Link Between Board Diversity and Smart Business

August 19, 2015

by: Jim McAlpin and Michael Shumaker

Our time is one of rapid technological and social change. The baby boom generation is giving way to a more diverse, technology-focused population of bank customers. In conjunction with the lingering effects of the Great Recession, these changes have worked to disrupt what had been a relatively stable formula for a successful community bank.

Corporate America has looked to improve diversity in the boardroom as a step towards bringing companies closer to their customers. However, even among the largest corporations, diversity in the boardroom is still aspirational. As of 2014, men still compose nearly 82 percent of all directors of

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Ownership Succession for Family-Owned Banks: Building the Right Estate Plan

April 28, 2015

Authors

Kimberly Civins and Michael Shumaker

Ownership Succession for Family-Owned Banks: Building the Right Estate Plan

April 28, 2015

by: Kimberly Civins and Michael Shumaker

For a number of community banks, the management and ownership of the institution is truly a family affair. For banks that are primarily controlled by a single investor or family, these concentrated ownership structures can also bring about significant bank regulatory issues upon a transfer of shares to the next generation.

Unfortunately, these regulatory issues do not just apply to families or individuals that own more than 50 percent of a financial institution or its parent holding company. Due to certain presumptions under the Bank Holding Company Act and the Change in Bank Control Act, estate plans relating to the

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A Director’s Guide to Corporate Governance 101

March 8, 2012

Authors

Jonathan Hightower and Walt Moeling

A Director’s Guide to Corporate Governance 101

March 8, 2012

by: Jonathan Hightower and Walt Moeling

The day when the board’s focus was limited to approving loans and marketing the bank in the community is long past. Today’s boards face a wide array of complex tasks, and, accordingly, the composition, structure and organization of the board must all be geared to facilitate the board’s performing its duties and functioning properly. This process today is lumped under the heading of “corporate governance.”

(For a printer-friendly version of this post, including a sample Director Self Assessment form, please click here.)

The concept of functioning properly, of course, is in the mind of the beholder, but it clearly

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TARP Governance Standards for Compensation Committees

July 1, 2009

Authors

Robert Klingler

TARP Governance Standards for Compensation Committees

July 1, 2009

by: Robert Klingler

The Interim Final Rules regarding Executive Compensation for TARP recipients provide a number of corporate governance standards for Compensation Committees.  While these standards currently only apply to financial institutions that have outstanding TARP investments, many of the standards are likely to be considered best practices for the compensation committees of all companies.

TARP recipients generally are required to have a compensation committee consisting solely of independent directors (with independence determined by reference to the federal securities laws).  (Private TARP recipients who received a TARP investment of less than $25 million are not required to have a compensation committee, in

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