Remarks by Thomas J. Curry, Comptroller of the Currency, Before the Prudential Bank Regulation Conference

Comptroller of the Currency Thomas J. Curry emphasized the importance of Dodd-Frank and of active, engaged, and informed boards of directors.

The second component of our heightened standards guidelines pertains to the
responsibilities of large banks’ boards of directors. It provides that bank boards should have at
least two independent directors and that all board members should have the information they
need for effective oversight, including the ability to pose a credible challenge to management.
The guidelines also require each bank to establish and maintain an ongoing training program for
all board members and conduct an annual self-assessment of the board’s effectiveness in meeting
the standards for the board that are articulated in the guidelines.
One important aspect of our guidelines is a requirement that a large bank’s compensation
and performance management programs complement and support its overall risk governance
framework. It’s important that these programs prohibit incentive-based payment arrangements
that encourage improper risk-taking.

Healthy culture starts at the top, and we look to the board of directors and senior
management to set a tone that encourages ethical and responsible behavior and demands
individual accountability for failure to act accordingly. It’s the job of the board, in combination
with management, to articulate what the institution stands for—as well as what it does not stand
for—and to make clear what is not acceptable behavior. We don’t expect directors to manage
the bank, but we do expect the board to look at high level issues that relate to culture, from the
compensation structure to how management deals with deviations from the standards the board
has established.

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