Insider Activities

Duties of the Board and Management

The board and management have a number of duties relating to insider activities. The board’s primary responsibilities are to provide strategic leadership and oversight of management. The board should ensure management effectively performs the following duties:

• Establishing appropriate insider policies, including a code of ethics.

• Fulfilling fiduciary obligations relating to common law, including the duty of care and the duty of loyalty.

• Complying with insider-related laws and regulations.

• Establishing and applying sound, independent processes to monitor and ensure compliance with insider policies, laws, and regulations, e.g., providing for effective internal controls and adequate audit coverage.

• Ensuring that hiring practices are effective.

• Setting appropriate compensation and fees paid to insiders.

• Following prudent dividend policies.

• Implementing sound management information systems.

• Submitting accurate financial reports and other disclosures.

Fulfilling these duties should enable the bank to conduct its insider activities in a safe and sound manner.

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