Regulatory AlertsSR 21-3: Supervisory Guidance on Board of Directors' Effectiveness
The Federal Reserve issued supervisory guidance requiring large financial institutions with over $100 billion in assets to ensure their boards of directors effectively oversee strategy, risk appetite, and senior management accountability. The document outlines five key attributes of effective boards, including directing information flows, supporting independent risk management, and maintaining appropriate governance structures. These expectations are integrated into the Governance and Controls component of the Federal Reserve's Large Financial Institution rating system to assess safety and soundness.
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