possess the requisite experience, competencies and personal qualities. chairpersons should encourage open and honest discussions which, at times, can be critical of the proposals recommended by the management. fostering an environment where dissenting views can be freely expressed and discussed is what will ensure objectivity – an absolute necessity for long - term sustainable performance of a bank. 10. the md & ceo is expected to function under the overall supervision, direction and guidance of the board and at the same time, maintain independence in performance of duties. at times, however, we have noticed the dominance of ceos in board discussions and decision making. it has been seen in such cases that boards are not asserting themselves. we would not like this type of situation to develop. at the same time, there should not be a situation where the ceo is inhibited from doing his duties. directors and ceos should, therefore, foster an atmosphere of free and fair discussions in board meetings. v. tone from the top ; corporate culture and value system 11. the larger purpose of the board is to provide clear and consistent direction to the banks. the focus areas for any board should be that of approving and overseeing implementation of the bank ’ s corporate values, policies and strategic objectives. setting the correct tone at the top is a primary step in building a conducive corporate and risk culture as well as ethical behaviour among the rank and file. it is the responsibility of the board to ensure that the processes and systems in the bank facilitate effective decision - making and good governance, which should also percolate down within the bank. these are not abstract concepts. these are necessities which would help in building public trust and confidence on banks. 12. the importance of public trust in the banking system, as exemplified in the recent bank failures in the united states, also needs to be appreciated. this was a classic case wherein public trust in certain banks evaporated suddenly. further, in this digital age, it took only a few hours to transfer billions of dollars held as deposits in a bank to other institutions, leading to a severe liquidity crisis. the monitoring of information appearing in various media, including social media, has therefore become very important for any bank. in fact, such cases have been observed in india, too, in a few banks in the past. we had to advise the ceos to interact with the media immediately to set out the facts correctly. there have been instances when the reserve bank had to issue press

key challenge across the industry. successful organizations are focusing not only on recruiting talent, but also on developing staff from within. training and other staffdevelopment tools are essential in this time of " war for compliance talent. " the role of the regulators the business lines and activities of financial services firms can cross the jurisdictional boundaries of many legal entities, making it more difficult for a supervisory agency acting alone to determine what went wrong and what processes may need to be improved. in these cases, the federal reserve, as the consolidated supervisor of the banking organization in question, works closely with the primary bank regulator and the securities and exchange commission ( sec ) to investigate control breakdowns. the agencies exchange information and compare their findings. for example, findings from sec examinations of broker - dealers, investment advisers, and mutual fund distributors are analyzed together with findings from targeted joint reviews of bank holding companies and banks conducted by the federal reserve and the primary bank regulators. this is the way the functional regulators should and will work in the environment of diversified financial institutions. conclusion controlling compliance risk may be easier said than done. certainly, establishment of an effective enterprise - wide compliance - risk management function and program is not done overnight. nor is it done without costs - - both monetary costs and the intangible costs inherent in real cultural change. however, it is clear that all organizations must find ways to effectively manage compliance risk - - and there is growing consensus within the industry that for some of the largest and most complex organizations, an enterprise - wide approach to controlling compliance risk is no longer just a " nice thing to have. " rather, it has become an essential element of effective risk management.