As things now stand, from a regulatory perspective, the Board of Directors (Board) of financial services institutions, particularly the larger ones, essentially is charged with “running the bank.” The niceties of “supervision” versus “management” are blurred, and U.S. corporate law (basically, the States) no longer appears to be the controlling factor in directors’ responsibilities as far as bank regulators are concerned.
Historical Perspective
Until very recently, corporate and bank Boards were selected and operated in a similar manner. The Chairman and/or Chief Executive Officer (CEO) generally controlled the selection process, which usually involved selecting someone important to his or her company (e.g., the CEO or a senior officer of an important customer, supplier or other entity, civic or cultural organization, or an important person in the community). Generally, being a CEO was sufficient qualification and no special background, knowledge, etc., was required.
