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Compensation and Risk – The Directors’ Responsibility
Executive Summary Bank directors today have an increased fiduciary duty to assess and manage the relationship between risk and compensation programs. Regulations resulting from the financial crisis require boards (and their compensation committees) to formally assess and document the relationship between risk and compensation programs for all employees, not just executives. As a result, board members need to be more involved, informed and knowledgeable about the bank’s compensation programs while ensuring the programs support sound risk management practices and comply with new regulations. The first step is to develop a process where the roles and responsibilities of management, the board...
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Susan O’Donnell is a partner with Meridian Compensation Partners, LLC. and specializes in serving banks across the U.S. Ms. O’Donnell has over 25 years’ experience advising boards and management on all aspects of executive and board compensation and governance.