The Challenging Role of a Director

Management Guidelines

Security and internal controls now begin in the board room. Two laws have been passed by Congress, the Gramm-Leach-Bliley Act of 1999 (GLBA) and the Sarbanes Oxley Act of 2002 (SOX), which have refocused the spotlight on a financial institution's board of directors. The role of a board member has grown in importance and complexity since the adoption of these two laws. GLBA re-emphasized the board's involvement in overseeing operations and implementing the appropriate policies, procedures, and controls to ensure the security, confidentiality and integrity to customer's financial information. Under GLBA a financial institution must develop a comprehensive written security program that encompasses administrative, technical, and physical controls. Board involvement is imperative in the development, implementation and maintenance of this program.

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