For many banks, the impact of the economic shutdown stemming from the novel coronavirus known as COVID-19 continues to create significant challenges. Amidst this however, it is important that management and the board continue to focus on the following key issues:
Board communication. Ensure that the board is fully aware of and up-to-date on current issues facing the bank. This requires good communication between management and the board including providing timely reports and information.
Regulatory guidance. Stay on top of pertinent regulatory updates and issuances as they develop. The federal and state banking regulators have issued a number of different communications and it is up to the board and management to make sure they understand how this can impact the bank.
Continuity and disaster plans. Confirm that a continuity and business disaster plan is in place and make potential updates necessary to ensure the plan is sufficient in light of the current environment and to ensure compliance with changing state and federal guidance.
Employees and succession planning. Ensure compliance with new and changing employment guidelines and review any existing employment agreements to identify the provisions applicable to the current environment, what it would mean if either board members or individuals in senior management are unable to perform their role and how the bank can replace or cover those roles.
Bank strategy plans. Review the bank's current strategy plan, both short term and long term, and analyze those plans in light of the current economic environment. It is important to re-evaluate existing strategy plans and continue to look at what is best for the operations of the organization overall.
Ultimately, banks can come out of this time with more opportunities and strategic options. It is the board's and management's role, however, to make sure the bank addresses governance matters and continues to work through issues as they arise to maintain a safe and sound institution.
Anton J Moch is a shareholder at Winthrop & Weinstine, P.A., practicing in the field of community banking; he routinely advises his clients on corporate governance and bank compliance and regulatory issues. You can reach him at amoch@winthrop.com.