SHEILA BAIR, DIRECTOR: Thomson Reuters, Host Hotels, and the Industrial and Commercial Bank of China
The great American author Willa Cather once said, "Too much information can be deadening." What my kid's call "TMI" is a common public ailment with today's technology-driven communications. And it can be fatal for boards of directors who need enough information to ask the right questions of management and make reasoned decisions, but who can quickly lose sight of the important issues if inundated with too much minutiae.
This challenge to know how much information is enough has been particularly acute for the directors of large banking organizations who have been hit with a raft of new regulations since the 2008 financial crisis. Bank supervisors have--justifiably- looked to governing boards to make sure regulatory concerns are addressed in a timely way. Yet I hear from many large bank board directors, particularly in the United States, that they are overwhelmed by the sheer weight and complexity of regulatory matters addressed to them by bank examiners.
To its credit, the Federal Reserve Board proposed guidance last August to more clearly distinguish supervisory expectations for boards from those of senior management. I applaud this effort which Fed Chair-nominee Jerome Powell describes as intended "to enable directors to spend less board time on routine matters and more on core board responsibilities." Importantly, Chair-nominee Powell has clarified that while supervisory matters will now be addressed to management, boards will receive copies of examination and inspection reports so they can hold management accountable for remediation. The Fed has struck a good balance in this guidance, which should be welcome relief to beleaguered bank directors.
Sheila Bair was chair of the U.S. Federal...