Role of the Board Overview

While bank directors have many responsibilities, their primary duty is to look after the interests of their company’s owners, be they shareholders in a publicly traded company, investors in a privately held company or customers in a mutual organization. Of course, directors in a publicly owned bank have a clearly defined fiduciary responsibility to shareholders that has been prescribed by law. It is not the appropriate role of the board to run the bank on a day-to-day basis; that is management’s job. Instead, the role of the board is to provide oversight as to how the institution is being run—from...