In light of the ongoing COVID-19 pandemic, sound corporate governance practices are now more important than ever. Bank regulators and shareholders expect boards of directors of financial institutions to continue actively overseeing and monitoring the business.
Boards also need to act quickly to make important decisions in “real time.” We expect regulators will expect greater board involvement (and thus heavily scrutinize board actions and decision-making), so it is critical for boards of directors to adhere to regular formalities regarding notices, waivers of notice, agendas, pre-meeting board packets, executive sessions, and documenting meetings via minutes.
Further, the downside risk of the COVID-19 economy puts a premium on choice of state of incorporation and D&O protections. In addition, activist shareholders can be expected to ratchet up their targeting of banks in light of depressed minority stock pricing.
To combat these risks, financial institutions and their holding companies should closely review their governing documents to ensure they are well-equipped to fight off a hostile takeover attempt.
This presentation will (i) review industry “best practices” in financial institution articles and bylaws, (ii) discuss common faults that we see in governing documents, (iii) changes to enhance the ability to function remotely and (iv) recommend changes to help boards of directors defend against a hostile takeover attempt.
ICBA Members: $219