The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1907-05-18
DUTIES OF BANK DIRECTORS.
synopsis of O Paper Read by Hon.
T. M. Henry Before the State
Ba lker5' Association

ment State banks are required to report
at least four times yearly, read the fol-
lowing paper at the meeting of the State
Bankers Association, held at Gulfport,
his subject being Duties of Directors
Their Leading and Moral Responsible
| ties"
Owing to the fact that the laws of
Mississippi contains so few safeguards
for the protection of the banks capital
or its deposits, it becomes important and
more watchful care and active, system
attic vigilance over It's affairs, and 1T
least to be fully and constantly informed
as to its general conditions, and p%articu-
its executive management are true to
their trust and are faithfully perform
ing their duty, c~onscientiously and with
an eye single to it's general welfare. This
can only be assured when they keep
themselves in close touch with their
bank, its securities and, to a large ex-
tent, with its patrons. These the pat
rons have more than a reasonable right
to expect and to demand.
1t is we'll recognized much of the bust
ness of the bank-in fact, the greater
portion-comes through the personal in
fiuence of the directors, individually or
as a whole, and they correspondingly owe
such patrons a moral duty that is Dor
dering on csiminality to neglect, or to
even perform in a half hearted, perfume
tory manner.
The directors should be the sentinel on
the watch tower, with enough interest in
and knowledge of the banks affairs to
at once detect the first approach of Ian
ger, and with sufficient courage to
promptly give the warning signal when
1T Is seen approaching, or even threatens,
and by extra care and vigilance to pre-
vert even a possible approach, to such
an extent at least as to endanger the
s~olvency of the institution. 1t is a sol
emn duty, and no one lightly viewing it
should be selected therefor.
Probity of character and business quail
ificatiOns above just criticism should
have more weight in their selection than
any possible amount of stock directors
may be willing and able to subscribe for.
This principle, even msasurably recog-
nized and honestly lived up to, will in
sure for any bank a satisfactory career
and the respect and confidence of the
community. Without it no institution
can expect a long and enduring prosper
ity, and would not deserve it.
The last place for a drone or for .
loose -jointed man of business is the di-
rectorate of a bank, for there he is han
ding not only his own funds, and that
OF trusting friends, as is the case in other
avocations, but those of widows and
orphans-trust funds of the most sacred
character, and often including all they
possess. He cannot know they are hon
estly dealt with or judiciously handled
without a personal knowledge of at least
the important details. Among his first
duties should be that of duly informing
himself, and thereafter of keeping him
self informed-not looking on the presi-
dent and cashier as responsible for every
thing.
Comptroller Ridgely, of the United
States Treasury, believes that if boards
of directors would only halfway do their
duty there would be a speedy ending of
"such sudden and sensational failures of
banks, looted from the inside by men
who have stood high in their communi-
ties and have been thought to be models
of honesty and trustworthiness." If this
is so important under a system of regu-
lar examinations, how much more so does
it become IL the total absence of such
A director should be what the name
implies-a director, in fact; and one who
is willing to be controlled by the will of
the majority, and for the interest of the
whole. He should at least assist in con
trolling and directing the general affairs
of his banks. He cannot do this, totally
ignorant of its conditions. You might as
well try to run an engine without steam.
He should also be on the alert for new,
business, not leaving this i'm
pOrtant function, as is too often the
case, solely to the officers actually in
charge. They can accomplish much bet
ter results when given this reasonable
service by their boards.
With proper care on the part of direc-
tors and a reasonable exercise of their
share of the responsibility with that of
the president and cashier, bank failures
would well-nigh be a thing of the past,
if not entirely so. Banks do not become
insolvent, or men thieves or defaulters,
in a day, Oh a week, or a month, but,
like the corroding things in the physical
life, comes from a slow, cankerous
growth, hardly perceptible at first, be-
with carelessness, Indifference or
the lack of knowledge and w~atchfulness
tie part of directors-no intention or
desire existing originally to wreck the
bank or even seriously injufe it. Discov-
cred in time, as they easily can be, ir-
Irregularities or populations could be cor
rected with small or no loss to anyone.
The old adage, "a stitch in time saves
applies perhaps with more force
and cogency to the banking business
than to any other avocation, and GER
tainly as much so. While this much
desired end need not be expected to be
fully attained, it can be closely APP
preached, and without great effort on the
part of Y
Too many directors are prone to look
upon their offices as purely honorary
ones. acting as If they felt that when |