David Baris, executive director of the newly formed American Association of Bank Directors, headquarted in Washington, D.C., must have been impressed.

Impressed, that is, at the way insurance companies have limited the increase in family auto policy costs when the kids get licenses.

Emulating insurance companies preference for teen drivers who have passed drivers' training courses, the asso-- ciation has arranged that, if bank directors have passed a come to hone their skills as board members, the cost to their bank of insuring them will go down.

How does this work?

The association compiles lists of courses it feels would be of value to the membership-mainly directors of community banks and thrifts.

Then, as members sign up and take the courses, they report in for credit, much as a lawyer or accountant takes courses each year to stay current in his profession. The association does the rest.

The group's agreement with Executive Risk is typical of what the association does; its goal is to protect and inform individual directors rather than to work for industrywide goals as other trade groups do.

This is why the association feels it can have both thrift and bank board members as directors: They are working toward common goals.

Mr. Baris believes that bank directors need a lot in the way of improved education and advocacy.

For example, he holds that there are director-and-officer insurance policies that truly protect the director and others that disappear just when you need them. It sometimes takes hard negotiation with an insurer to protect board members.

As a lawyer, formerly with the Comptroller of the Currency, Mr. Baris knows Capitol Hill, so his group also works to insure that legislation and regulations do not rob directors of their constitutional rights. In this regard, he is especially worried today about legislation that empowers federal banking agencies to freeze assets of directors or subject them to civil money penalties without due process or proof of blame.

Despite all the talk of self-dealing bank directors, Mr. Baris reports that, in a study his group did of Resolution Trust Corp. suits filed in 1992 against directions at failed institutions, 85% or more involved no allegations of selfdealing, conflict of interest, or criminal activity.

It is this type of information that his association tries to get understood by Congress in an effort to "sensitize agencies to the rights of directors" and to stress the importance of not discouraging top people from going on financial institution hoards.

A major problem for the association as it tries to grow is to attract chief executive officers, who already are in many trade groups.

So Mr. Baris works to sell them on the concept that they are board members, too, and need this advocacy group to support them in that role.

What interests Dave Baris now is the entire issue of directors' compensation.

He well recognizes that the prestige of being a board member and the education a person gains from being a directo ate the major compensations that motivate community bank boards.

But he also feels that changes could be made in the compensation system that would help attract and keep top people.

Most importantly, he feels that, if his association can reduce the risk of personal liability that comes with being a board member, the attractiveness of directorships would get a major boost -- no matter the pay. He also likes the idea of paying directors with restricted stock that can only be sold when they retire from the board. That would tie their own personal financial interest a little more closely to that of the bank.

But Mr. Baris said he feels that recognition in the community, programs to reward aggressive directors who bring in new business, and full disclosure by the CEO before asking board members to vote -- with ample time for analysis of material before board meetings -- are the keys to what directors want and need.

And he feels that his association is an important addition on the financial scene.

For unless hoard members get a fairer shake and a lessing of the fear that they may be held personally liable for acts they knew little or nothing about, the community bank board member may become an endangered species. The consequences would be serious for banks and the communities they serve.

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