Re: Banking Boards Need Savvy, Experienced Directors
This blog post is in response to Richard Leblanc‘s blog post on Canadian Business.
After reading Leblanc’s post, I have begun to think more about the composition of an organization’s board of directors, rather than just it’s actions as a whole. With regards to the financial crisis, it may not have been the case that they were corrupt, or particularly greedy as the Occupy Wall Street movement may suggest, but rather, they were unequipped to deal with the crisis.
We could, and should, argue that the constituent members of any board should be the people that are the most qualified, and experienced people for the position. As markets grow and dynamically evolve, the directors must also be able to adapt their policies and positions to do their job properly and effectively.
However, I was surprised to learn that some of Leblanc’s proposed board reform issues weren’t already commonplace, specifically, the “[appointment of] directors with relevant financial services experience”. I had always assumed that even if the directors did not particularly specialize in the field their company was in, they at least had relevant experience in similar fields, but evidently, this was not the case.
With the Eurozone crisis in Europe, and the fiscal cliff looming in the United States, banks across the world will need to be more careful with their actions, and their directors must be able to adapt quickly to rapid change.