The president of the National Association of Corporate Directors says anyone considering becoming a director better be serious.
"It's no longer the old boys' network and it's no longer an honor to be on the board; it's hard work," said John M. Nash, who heads the 2,000-member association based in Washington. "When the FDIC brings a suit, you are guilty until proven innocent."
Mr. Nash offered a quick checklist of questions a person who plans to be a director should ask bank management before accepting the position. His fire question: "Why do you want me on your board?" he says. "If I'm a big depositor, that's the wrong reason."
Other questions Mr. Nash would ask include:
* Dan the institution have liability insurance for directors and officers?
* Are there suits pending against the institution?
* What kinds of loans does it make?
* How is it perceived in the eyes of examiners?
* Is there a code of ethics?
* Who are the other members?
Would Check Financials
"Under the FDIC rules I am responsible for the action of my peers," Mr. Nash says.
Mr. Nash says before taking the job he'd want to see the bank's financial statements, and would request training so he could understand what he reads.
Mr. Nssh says flatly that it's a conflict of interest for directors to collect fees from services they render to the bank. Directors who provide professional services aren't independent, he says.
