“Banks” and “bankers” are today’s political piñata and everyone feels entitled to take a swipe. As a result, the Dodd-Frank Act represents an upcoming Tsunami of increased bank regulation.

The AABD has updated materials that may be considered by your bank's compensation committee for its annual evaluation of CEO performance.

The AABD encourages every bank board to undertake an annual assessment of board governance. This regular assessment process will provide your board with the opportunity for early intervention when potential governance issues develop. Download AABD Board Assessment Documents.

The 2011 Edition of the AABD Compensation Report is a compilation of 3-years of data prepared by McLagan’s Corporate and Consumer Banking Consulting Practice.

The recent financial crisis turned a spotlight on independent board leadership. Every board is comprised of individuals with different personalities, experience levels, and professional backgrounds; there is no “right answer” for every board. This article, based on our boardroom experience, provides a few thoughts and suggestions for your board to consider.

The true story of how AmericanWest Bank navigated the financial hurricane of 2008-09 and prevented seizure by the FDIC with a ground-breaking structure to recapitalize the Bank in December 2010.

Bank Director Bibliography Members have requested AABD to provide a bibliography of bank director reading material to assist them in their roles as directors. We are providing the following list of materials, which is focused on bank and corporate director issues. There are many other books and periodicals which we have not listed that concentrate on the needs of bank management. These are available through various other national and state bank trade groups and state and federal banking agencies. AABD Recommended Reading List: AABD. Opportunities for Banks in Life Insurance AABD. A Bank Director's Guide to Codes of Conduct AABD. A Bank Director's Guide to Avoiding Enforcement Actions AABD. A Bank Director's Guide to Internal Investigations AABD. The Regulatory Exclusion in Directors and Officers Liability Insurance Policies and Obtaining Regulatory Coverage in the Present Market AABD. 1998 Survey of Bank and Savings Institution Boards of Directors...

Purchase Recommended Books at the AABD Bookstore

Congress, bank regulators, shareholders and governance “experts” have all turned up the spotlight on board governance. Caution must be exercised so bank board members do not over-reach and step into the shoes of management – a situation that will compromise the board’s essential role of management oversight.

A critical lesson learned from the past four years is the importance of both liquidity and asset/liability management. Each significant failure in 2008 was triggered by an inability to attract sufficient funding to “keep the doors open”. Liquidity disappeared as a result of market fears related to asset quality and capital but the fatal flaw was funding.

The AABD Bookstore contains special reports published by the AABD and a list of publications recommended by the AABD.

The federal banking regulatory agencies have acknowledged that incentive compensation practices in the financial industry contributed to the financial crisis. Current regulatory developments have made incentive compensation a hot-button topic for bank directors, who are struggling to understand and adopt compensation programs that do not encourage inappropriate risk-taking and thereby threaten institutional safety and soundness.

There is a sleeper provision in section 612 of the Wall Street Reform and Consumer Protection Act currently being worked on by a House-Senate Conference Committee that unnecessarily erodes the dual banking system that has been in place for almost 150 years.

After many years in the banking industry and serving on the senior executive team of two banks, as well as a former CEO of a Community Bank, I can discuss the similarities and differences between turning a bank around and restructuring a business as follows:

Developed by Amalfi Consulting in conjunction with the American Association of Bank Directors (AABD). This year’s version has been updated to reflect the present state of the banking marketplace in 2008; an unprecedented time by any measure. This paper provides a context for community bankers to understand these changes, resulting trends in compensation, and potential implications for their own compensation plans.

Purchase at AABD Publications

AABD Premium Members: Request Complimentary Copy

Click Here for PDF

A major component of the writedowns being reported by numerous financial institutions is based on fair-value accounting assumptions. The recent series of articles in American Banker ["Fair Value: Bumpy Road from Theory to Practice," Dec. 28; "Fair Value: Simple Idea, Complex Path," Dec. 31; and "In Fair-Value Debate, Trust Is Wild Card," Jan. 2] was an excellent introduction to this very complex topic. Fair-value accounting impacts all financial institutions, and my organization, the American Association of Bank Directors, encourages every board member to read these articles.

Viewpoint: Published by the American Banker

The Trouble with Section 405

The Financial Services Regulatory Relief Act, which passed the House in March and is now being considered by the Senate, contains a provision that is not in the best interests of the banking agencies and would neither improve the banking system's health nor protect the deposit insurance fund. 

View PDF of Article

A provision in regulatory-relief legislation could hold directors responsible for bailing out troubled banks. The provision would give federal regulators more authority to force directors to reach into their own pockets to recapitalize their banks if their capital fell below specific levels.

The AABD provides easy access to a wide variety of AABD Publications for bank directors.

First, I will discuss the basic framework of good corporate governance and internal control. Then I will talk about the role of the board of directors in the control process and how directors can become more informed about the nature of changing risks in their banks. I will give examples of types of risks that can occur at community banks without effective governance. And finally, I'll discuss why it is important for bank directors and managers to be fully aware of the implications of operational risk and reputational risk.

Periodic warnings by the federal banking agencies of deteriorating loan quality or underwriting standards have put national bank directors and others on notice of potentially serious consequences if appropriate action is not taken.

The American Association of Bank Directors ("AABD") announced today the issuance of a White Paper on bank board and executive management compensation prepared for AABD by Clark/Bardes Consulting (NYSE: CBC - news), a leading bank compensation consultant.

On December 27, 2000, President Clinton signed into law the American Homeownership and Economic Opportunity Act of 2000. Most of the law addresses housing measures, but it also contains about 20 regulatory relief provisions. This summary will address only those provisions that, in our judgement, have a significant impact on directors.

On November 28, 2000, the Federal Financial Institutions Examination Council issued a statement applicable to all insured banks and federal credit unions entitled "Risk Management of Outsourced Technology Services".