Edited by Benton E. Gup
Benton E. Gup Directors are responsible for good corporate governance. Corporate governance is a hot topic because of Enron, Tyco, WorldCom, and dozens of other corporate scandals. In response to these scandals, Congress passed the Sarbanes-Oxley Act of 2002 (SOX), which imposed additional pressures and costs on ﬁrms. In addition, the USA PATRIOT Act (2001) increased the regulatory burden and costs on all ﬁnancial institutions. Financial institutions, in the context of the Bank Secrecy Act and antimoney laundering laws, include but are not limited to commercial banks, all subsidiaries of bank holding companies, US branches and agencies of foreign banks, savings and loan associations, credit unions, federally regulated securities brokers, dealers, and investment companies, money service businesses, casinos, card clubs, futures commission merchants, insurance companies oﬀering selected products, and mutual funds. The motivation for this book came when I interviewed some of the directors of a ﬁnancial institution that had suﬀered serious problems due to lack of proper oversight. The directors were intelligent, and very successful in their own professions. However, they had little or no background in ﬁnancial institutions, which can be extraordinarily complex. Accordingly, this book diﬀers signiﬁcantly from other sources of information about corporate governance because it contains advice from existing directors of banks, credit unions, and insurance companies, regulators, lawyers, and academics from the US, Europe, and Australia about what directors of ﬁnancial institutions need to know in order to perform their duties. It covers a wide range of subjects, including corporate...