Bank directors are concerned with several issues: 1. Top issues include governance risk, corporate culture, strategy, environmental and social issues, and information technology risks like cybersecurity and data breaches. 2. Other challenges include regulatory compliance, financial statement risks with the new CECL accounting standard, and operational risks with changes in operations and technology. 3. Directors are also worried about unknown risks and ensuring strong risk management in areas like credit, liquidity, pricing, and reputation risks. Effective oversight of management performance and continuous improvement will help address these challenges.

1. - The latest insights and developments regarding the things about
which Bank Directors are worried. -
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John C. Blackshire, Jr., CPA
479-200-4373 / johnb@cseminars.com
Top Issues for Bank Directors

2. Challenges for the Bank Board
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Unknown unknowns (unexpected or unforeseeable conditions), which pose a potentially greater risk
simply because they cannot be anticipated based on past experience or investigation.
“The way to cope with the future is to create it.” Ilya Prigogine

3. Property of Corporate Compliance Seminars
www.compliance.seminars.comCorporate Compliance Seminars
Governance Risk Management
Corporate Culture – Corporate Purpose
“At a Bankers Association Annual Conference one of the presentations focused on “Top Ten
Governance Issues for Bank Boards and Directors.”
Board Composition, Diversity & Effectiveness
Corporate Strategy
Environmental, Social and Governance

4. Property of Corporate Compliance Seminars
www.compliance.seminars.comCorporate Compliance Seminars
Information Technology Risk Management
“At a recent bank director’s conference the biggest threat identified by the attendees was related
to technology…...Cybersecurity “
Ransomware Attacks
Data Breaches

5. Property of Corporate Compliance Seminars
www.compliance.seminars.comCorporate Compliance Seminars
Enterprise Risk Management
Corporate Culture is the key.
Who will be managing the Bank in Ten –
Twenty Years?
Oversight: Engaged - Well-informed.
Monitoring: CEO – Management Performance
“Risk areas defined by the Office of the Comptroller of the Currency (OCC) are Credit, Interest Rate, Liquidity,
Price, Operational, Compliance, Reputation, Strategic “

6. Property of Corporate Compliance Seminars
www.compliance.seminars.com
Exhibit 17 – COSO in the Cyber Age – Deliotte 2015
Corporate Compliance Seminars
Regulatory Compliance Risk Management
Is the “Weakening of Big Bank Regulations” under Trump the seed for the next financial crisis?
Will the OCC “Modernize” the regulations
One goal is to curtail the CFPB’s power.

7. Property of Corporate Compliance Seminars
www.compliance.seminars.com
Exhibit 17 – COSO in the Cyber Age – Deliotte 2015
Corporate Compliance Seminars
Financial Statement Risk Management
Have the external auditors really assessed the
financial statement risks?”
CECL is coming in the future.
A new model approach which commonly called CECL (current expected credit loss) will be
implemented at year end 2021 (maybe 2023). Applying the CECL model to an institution’s loan
portfolio is expected to become an increasingly significant area of attention and resource
deployment for senior management and boards.

8. Property of Corporate Compliance Seminars
www.compliance.seminars.com
Exhibit 17 – COSO in the Cyber Age – Deliotte 2015
Corporate Compliance Seminars
Operational Risk Management
What will the “back room” look like in five
years? Ten years?
How are the business continuity and disaster
avoidance programs working?
When wearables become implants used for real-time payments, will banks still be consumers'
primary financial institutions? The answer depends on how well an institution responds now to
three challenges disrupting traditional banking providers.

9. Property of Corporate Compliance Seminars
www.compliance.seminars.com
Exhibit 17 – COSO in the Cyber Age – Deliotte 2015
Corporate Compliance Seminars
Business and Administrative Process Risk Management
Do we practice the right values in the day-to-day
business processes?
Are we using a “continuous improvement
mindset” to operate the bank?
The aim of leadership should be to improve the performance of man and machine, to improve quality,
to increase output, and simultaneously to bring pride of workmanship to people. Put in a negative
way, the aim of leadership is not merely to find and record failures of men, but to remove the causes
of failure: to help people to do a better job with less effort. W. Edwards Deming

10. Cybersecurity
risk Management
“Compliance and
Regtech…Howdo we
address banking
regulations with
technology?
“How will a
severe economic
downturn effect
the credit risks.
Proactive Issues!
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What are the
unknowns?

11. Financial Statement Risk Management
Enterprise Risk Management
Property of Corporate Compliance Seminars
www.compliance.seminars.com
Exhibit 17 – COSO in the Cyber Age – Deliotte 2015
Operational Risk Management
Compliance Risk Management
Banking Risk Management
Where does management need to improve their risk management?
Information Technology Risk Management
Corporate Compliance Seminars
Business and Administrative Process Risk Management

12. (C) Corporate Compliance Seminars
www.compliance-seminars.com
12
John C. Blackshire, Jr., CPA
Corporate Compliance Seminars
479-200-4373
johnb@cseminars.com
Control. Comply. Communicate.