Triple Play The necessity of corporate governance

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Don Musso is the president and founder of FinPro Inc., a leading management consulting firm in Liberty Corner. We asked Don for three thoughts on the necessary components of a corporate governance program.

Don Musso is the president and founder of FinPro Inc., a leading management consulting firm in Liberty Corner.

We asked Don for three thoughts on the necessary components of a corporate governance program:

Philosophy: All directors have a duty to exercise loyalty (put the institution’s interests ahead of their own) and care when fulfilling their responsibilities, but we rarely see corporate governance at the board level going beyond discussing these duties.

Strategy: The strategic level is vitally important, but establishing policies does not ensure good corporate governance; directors must also execute those strategies on the tactical level.

Tactics: Directors need to act independently and actively participate in all meetings, and offer credible challenges to the senior management team. Failure to do so can leave a bank with ineffective management, a disjointed strategic plan and significant director liability.