Magazine article American Banker

Wary Directors Brush Up on Banking; as Liability Fears Grow, Training Programs Proliferate

Magazine article American Banker

Wary Directors Brush Up on Banking; as Liability Fears Grow, Training Programs Proliferate

Article excerpt

In the mid-1980s, the directors of an Oil Patch bank in Mississippi watched nervously as bad loans toppled other oil-dependent institutions. At the same time, the government was suing the directors of at least one nearby failed bank for "dereliction of duty."

Then, as problems escalated, William J. Feltus 3d and his fellow directors of Britton & Koontz First National Bank in Natchez, decided they needed to become more active in the bank's affairs.

To prepare themselves for their new role, they signed on for a training program for bank directors.

Widespread Interest

The $87 million-asset First National Bank is just one of many, many banks that have adopted director training programs. These programs have enjoyed a surge of interest in recent years as the role of bank directors has evolved.

Only a decade ago, most bank boards were simply a rubber stamp for management. But as bank problems escalated and directors were held increasingly liable for these problems, bank boards decided it was time to shed their passive roles.

Mr. Feltus said the directors needed a more hands-on approach.

Half-Day Seminars

So twice a year for the last six years, Mr. Feltus and his fellow directors have taken half-day training sessions on topics such as asset-liability management, marketing, legislative changes, and the legal obligations of bank directors.

Director training organizations -- including Darling Consulting Group, Newburyport, Mass.; Professional Banking Services Inc., Louisville, Ky.; and W.M. Sheehan & Co. …

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