What a potential director should do to prepare to join a board
Before joining a board, a candidate should read and evaluate the quality of the company’s data security and anti-money laundering (AML) policies and practices. He or she should read the company’s last three years of audits and any remediation plans and progress reports, if appropriate. This should give a potential director a good understanding of whether the company has a robust corporate governance infrastructure and a culture of accountability.
A potential director may not initially understand everything put in front of him or her in those documents and should be provided adequate training to be fully prepared to assume the full responsibilities of the new position of high responsibility.
Good board members and boards demand training. If formal training is not provided, directors should obtain the necessary information themselves. If they cannot or are unwilling to do that, they must or should decline the invitation to join the board or leave the board if they are already members. With accountability and corporate governance comes personal responsibility.
How corporate governance intersects with compliance
Excellent compliance is an essential element of responsible corporate governance, and board members have the responsibility to oversee compliance. In large measure, government is now requiring businesses to share the responsibility of assuring compliance as a part of strong corporate governance.
Bank CEOs and board members should know there are circumstances in which directors may be held personally responsible or liable for business decisions that are effectively unlawful. For example, financial crime, money laundering, terrorist financing, tax evasion and a host of matters that relate to security of staff and client data and information. The board must ensure that the company complies with all laws and regulations that are relevant to its business.
Moreover, money laundering and threat finance are significant risk factors for any business, but even more so for financial services companies. Financial crime is a growing concern of all economies and nations. Boards of directors and management must review the related issues regularly. They must assure that risk management techniques and universal best practices are incorporated into every area of the business and client management, including transaction monitoring and internal client oversight.
John F. Walsh is a highly regarded industry leader on the subjects of risk management, financial crime risk management, security, anti-money laundering and combating terrorist financing.
Adapted article “The Intersection of Corporate Governance and Compliance: Helping Your Directors Fulfill Their Responsibilities,”
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