COMMISSIONER'S C O LU M N
Director Training –
Knowledge is Power! Susannah Marshall | Commissioner | Arkansas State Bank Department
R
ecently, the federal regulators have issued several proposals aimed at enhancing practices and strengthening oversight of the nation’s largest institutions. Separately, in October of this year, the FDIC issued a notice of proposed rulemaking (FIL55-2023), that would amplify existing standards to promote strong corporate governance and risk management at FDICsupervised institutions with total assets of at least $10 Billion. Arkansas is fortunate to have a diverse banking landscape developed by long-standing, knowledgeable leadership at each institution. Arkansas is not currently home to an institution with total assets greater than $100 Billion, but we have several institutions at or near the $10 Billion mark and as many of us know, when proposals and guidance are issued for larger institutions, often there is a slow, but steady creep to apply those same standards to all institutions. Therefore, I am always attentive to any idea of additional requirements or expectations which would impact our banks and especially the Boards of Directors.
On the outset I want to share that the strength and success of our Arkansas banking industry is the product of the hardwork, focus and commitment by the Boards of Directors of all our Arkansas-based banks and bank holding companies. I have the opportunity to visit with bank Board members both individually and collectively and I am always pleased with the technical knowledge and engagement of our Board members. We are fortunate to have so many individuals who share their time and talents with our Arkansas banks in this capacity. However, as with anything, we can always work to improve and enhance experience and exposure through training and engagement. Former Governor Frank White, a predecessor of mine, also held a keen interest in all things related to governance of financial institutions. In 2002, through conversations with internal and external bank Board members, he recognized that in some instances a bank director was not well-versed in various industry specifics. With the desire to increase the strength and depth of practice of our Directorates and to establish minimum expectations, the
“The role of a bank Director is not static and the fiduciary, financial, reputational, and legal requirements that align with this duty are significant. Just as with many other professions, continuing education is key to executing these responsibilities in an effective manner.” 10 • FALL 2023
Arkansas State Bank Department issued Administrative Policy #008 which requires an individual, who is elected to the board of an Arkansas state bank, to attend a training seminar within the first year of service. The training program’s content must receive prior approval by the Bank Commissioner. To my knowledge, we may be the only state that has established this requirement and I feel that it has continued to pay dividends for the individual Board members, the bank as a whole and our industry. Although the training must be completed within the first twelve months, I wholly believe this is a practice that Boards should consider employing on an ongoing or more routine basis. We are all aware how much change continually occurs within the industry but also within the larger economic and business communities. The role of a bank Director is not static and the fiduciary, financial, reputational, and legal requirements that align with this duty are significant. Just as with many other professions, continuing education is key to executing these responsibilities in an effective manner. Many external director training opportunities exist, and the Arkansas Bankers Association is always a wonderful resource for training programs for all bank staff and Board members. As we enter the annual strategic planning and budgeting period, I strongly encourage each institution to evaluate if there are training needs for your Board, or how they might benefit from engaging with an external industry professional for updates and emerging issues related to your institution and the larger banking community.
