Banking Safety on the 5 Cs

Regulations for risk management have logically increased dramatically since the onset of the recent financial crisis. For a bank’s board of directors, strong corporate governance focuses on a concise framework by which rules and practices now maximize bank safety and minimize risk through the 5 Cs.


Not only must board members be competent, with an understanding of the bank’s activities and the general business of banking, but they must ensure that their experience and the experience of competent advisors are appropriate for current and future functionality.


Respect, trust, and the ability to discuss all points of view within the boardroom are critical to focus the board’s actions with one cohesive voice.


Board discussions and votes must remain in the boardroom as reflected in the board minutes. No further discussion should continue outside the boardroom, and media questions regarding the board’s discussions and decisions should be referred to the bank’s appointed representative.


Communication management and the board should be encouraged for an open exchange of ideas through the appropriate channels.


The board’s cultural focus should emphasize risk parameter decisions and actions performed for the good of the organization. Board member and senior management training should occur on an ongoing basis to develop a culture of cohesion within the organization and promote morale.