8/10/17 - Fed Proposal Won’t Let Boards Off Easy, But Here’s Why That’s OK
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8/10/17 - Fed Proposal Won’t Let Boards Off Easy, But Here’s Why That’s OK

Promontory Managing Director Bill Lang published an op-ed in American Banker about a new Fed proposal designed to revise and clarify expectations for boards of directors at Fed-supervised institutions.

“Initial press reports highlighted the proposed narrowing of board responsibilities so board members can concentrate on strategic issues,” Lang said. “Superficially, this may appear to be the case, but it would be a misreading of the Fed’s objectives to interpret the proposal as an overall lowering of supervisory standards for boards at large financial institutions. Banks shouldn’t mistake a clearer statement of expectations as an easing of standards. Indeed, by establishing more focused expectations — the new proposal provides five main measures for assessing board effectiveness — supervisors will have better tools to hold boards accountable.”

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