Some watchdogs take their case to the board.

SAN DIEGO -- Compliance officers are getting Senior management's attention in a new way: going straight to the board.

Fed up with chief executives who are ambivalent about compliance, bankers have started going to the top to get their message across.

"The way to get anyone's attention is to go to their boss," said Stephen H. Weiss, general counsel at Sanwa Bank California. "When board members start asking questions, management listens."

Stuart J. Lehr, vice president of corporate compliance at U.S. Bancorp, Portland, Ore., gave compliance officers some suggestions on how to enlist their board's help at the California Bankers Association's annual compliance conference here last week.

The key is to go to board members with a clear sense of what you want to accomplish, and what you expect them to do, he said.

When you know what you want to tell the board, formulate it into a story, with a beginning, middle, and end, he advised. The story shouldn't insult their intelligence, said Mr. Lehr, but it should give them a good idea of what they're supposed to do.

The story should be realistic, and the officer should never cry wolf, Mr. Lehr said. It should also lead to a suggested action for the bank to take, he said.

But Richard J. Jett, a director of California State Bank, Covina, warned officers to remember that the board raises the money that keeps the bank in existence.

One of the worst things is to get angry at a board member and tell him he could go to jail for noncompliance, Mr. Jett said.

"They may get into trouble with regulators later, but it will be with another compliance officer," he said.

It's important to size up the board members individually, Mr. Jett said. On every board, there are a few people who believe in the Community Reinvestment Act, even though the rest of the board thinks they're nuts, he said. Use those CRA fans as your allies, and try to convince the others that if it's done right, the bank can make money.

Mr. Weiss agreed. "Sell it as good business," he said. "Show you're running this efficiently."

DialogUe with the board can be evident in CRA ratings, Mr. Jett said. Compliance officers at banks with a "needs to improve" rating probably never talk to their board, he said.

Panelists also suggested that officers keep the board up to date by preparing a one-page monthly report summarizing current and emerging compliance issues. -- Shannon Henry

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