THE ROLE OF A NATIONAL BANK DIRECTOR THE DIRECTOR’S�BOOK Ofce of the Comptroller of the Currency October 2010
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PREFACE�A bank’s board of directors plays a critical role in the successful operation of the bank. Te health of a bank depends on a strong, independent, and attentive board that adopts efective corporate governance practices. Te board has the fundamental responsibility of directing the management of the bank’s business and afairs, and establishing a corporate culture that prevents the circumvention of safe and sound policies and procedures. In addition, directors have certain fduciary responsibilities to the bank’s shareholders, depositors, regulators, and communities it serves. Te Ofce of the Comptroller of the Currency (OCC), the agency responsible for regulating national banks,1 recognizes the challenges facing current and prospective bank directors. Te OCC published this book to help bank directors fulfll their duties in a prudent manner. Te book summarizes laws and regulations that directors should be aware of and contains concepts and standards for the safe and sound operation of a bank. The Director’s Book was frst published in 1987 and revised in 1997. Tis 2010 edition updates the guidance to refect legal and regulatory changes since 1997. Directors should tailor their implementation of the guidance in this book to refect the size, scope of operations, and risk profle of the bank on whose board they serve. Te guidance in this book does not constitute a legal opinion that conduct consistent with it protects a director from liability. Conversely, conduct inconsistent with such guidance does not necessarily result in violation of the law and possible liability. Instead, directors should 1 Te Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on July 21, 2010, provides that supervisory authority for federal thrifts is to be transferred from the Ofce of Trift Supervision to the OCC. Te date of the transfer must be within one year of enactment, with the possibility of a six-month extension.
review their responsibilities and conduct on an ongoing basis and seek advice from counsel when necessary. Te guidance in this book does not create rights for banks or bank directors, or create obligations for the OCC. In particular, the OCC is not bound by any internal procedures set forth in the guidance, other than the extent to which the OCC may be bound by existing law. Additional information on specifc topics mentioned in this book can be found on the OCC’s Web site at or on the OCC’s National BankNet Web site at . National BankNet is an OCC-operated Web site exclusive for national banks. BankNet