Company: FMFG
Filing Date: 2025-03-13
Form Type: PREC14A
Source: 0001437749-25-007538
Chunk: 21

Company: Farmers & Merchants Bancshares, Inc.
Filing Date: 2025-03-13
Form: PREC14A
Chunk 21
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 interest.

Board Leadership and Role in Risk Oversight

The Company Board has separated the positions of Chairman of the Company Board and CEO in an effort to maintain independent oversight of management. The Company Board elects from its members a Chairman who it believes will be an effective leader and who satisfies the “independent director” standards of NASDAQ Rule 5605(b)(1). The Company Board believes that this bifurcated structure best suits the Company because it helps to ensure that the Company has a strong, independent leader who can objectively review operations and the performance of management. In addition, the Company Board believes that it is important to allow the CEO to concentrate on running the day-to-day operations of the Company and the implementation of the Company Board’s policies and procedures without the added burden of also managing the Company Board.

The Company Board administers risk oversight by assigning various organizational risk oversight functions to its committees, which report to the full Company Board on a regular basis.

The Bank’s Loan Committee monitors the Bank’s credit risk in accordance with guidelines established by the Bank Board and bank regulatory agencies and is charged with approving loans made by the Bank within acceptable guidelines. The Bank’s Loan Committee also monitors the Bank’s concentrations of commercial real estate loans and the risk rating of loans.

The Audit Committee monitors compliance risk, risks related to our reputation, our internal control over financial reporting, including the internal audit function, and the performance of and reports by the Company’s independent registered public accounting firm.

The Executive Committee monitors the Bank’s market and strategic risks through its oversight of marketing and strategic initiatives, and regularly meets with the CEO, the Chief Financial Officer (the “CFO”), and the Chief Operations Officer (the “COO”) so that it may be kept apprised of the Bank’s general operating environment. The Executive Committee also helps ensure director independence through its nominating authority, and it manages compensation risk through its authority to review and recommend the Bank’s executive compensation practices and policies.

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Interest rate risk, liquidity risk, and valuation risk are monitored by the Bank’s Asset Liability Committee. Credit risk and transaction risk are monitored by the Bank’s Loan Committee.

Attendance at Company Board Meetings

The Company Board held 13 meetings in 2024. Each incumbent director who served as a director during 2024 attended at least 75% of the aggregate of (i) the total number of meetings of the Company Board (held during the period served) and (ii) the total number of meetings held by all committees of