Pub. 14 2019-2020 Issue 6

NEBRASKA BANKERS ASSOCIATION 27 B A N K E R S ’ B A N K • O F T H E W E S T • WE CHAMPION COMMUNITY BANKING MARLENE WADE TRACI OLIVER TARA KOESTER LEE ANDERBERY IN BUSINESS TO FURTHER YOUR BUSINESS YOUR ADVOCATES: Nebraska’s correspondent team BBWEST.COM 411 South 13 th Sreet | Lincoln, Nebraska | 402-476-0400 and compliance management adds to the amount of information that bank officers are obligated to include in their presentation to bank directors. Considering that the data being reported to the board comes under scrutiny from so many different avenues and carries severe penalties for banks found not following a best practices; the importance of reporting has significantly increased. This can be quite challenging for smaller banks where senior management already finds themselves wearing several hats. Heightened risk and compliance considerations call for a more thorough, broader analysis. The reactive, approach is not considered adequate and must be replaced with proactive monitoring and reporting. In a nutshell, the reports have to be comprehensive, but meaningful. There is an implied obligation to educate the bank’s directors regarding the best practices employed by the bank, so they can effectively make decisions based on the information they are presented. For these reasons alone, banks need to reassess their approach to board reporting, if they haven’t already. The two key overall areas to reevaluate are content and delivery. Board packages should be delivered well in advance of the scheduled board meeting to allow ample time to review the information before time for discussion. Delivery encompasses more than just a timing factor. An effective delivery incorporates the following: • Easy-to-understand presentation • Useful information • Direct delivery from the data source, not a report that has been manually crafted by someone It would be virtually impossible to meet all of the require- ments for report delivery outlined above without the use of technology. The bank’s IT system (platform) can produce timely and accurate information for reports to be included in the board package. Systems can accumulate data across business units, making it realistic to provide support data for ongoing risk assessments and for reporting at the business unit level. This technology can function not only as a comprehensive collection of financial information, but can also be used as the focal point for bank-wide risk management and control. The use of technology-produced reports supplies not only accurate data, but it also accumulates data over time which provides an active, dynamic benchmark against which bank performance can be measured. All the information in a data warehouse produced by the IT platform ties back to the source— the financials and the general ledger—allowing the bank’s man- agement team to walk into a meeting with the information they Board of Directors — continued on page 28