The Farm Credit Administration has changed the rule on the makeup of Farm Credit System lenders' boards.
An administration spokeswoman said the rule was first proposed a year ago to make standards for corporate governance consistent across the system. She said many institutions already had adopted some of the changes in the final rule voluntarily after they were suggested as best practices.
The rule was passed Friday. It requires that every one of the 101 lenders have at least one outside director and that the 44 with more than $500 million of assets have at least two.
The system institutions must also have policies on director qualifications, implement training for directors, and conduct annual self-evaluations. They must also have an audit committee with financial expertise and a compensation committee on their boards.
Additionally, all directors and senior officers must say in their institutions' annual reports whether they are directors or officers for any other businesses.
