Relationship between BOD and Bank Management

Relationship between BOD and Bank Management : Shareholders own the bank but they do not directly manage the bank. They fulfill this responsibility by forming the management level. On the other hand, the Board of Directors does not participate in the day-to-day detailed bank management activities. By telling the board members, the bank’s policies and strategies are set and the management is allowed to execute the bank’s work with the best efficiency.

The relationship between the shareholders of the bank, the board of directors, the chairman, the chief executive / managing director / executive president and the bank management can be seen through the following diagram:


Relationship between BOD and Bank Management

Although the board of directors gets more appreciation from the shareholders for efficient operations and good profitability in the bank, they do not actually manage the bank operations. They only perform management workforce recruitment. On the other hand, members are often reprimanded by shareholders for unsatisfactory bank performance. However, inefficient management is largely responsible for liquor operations.

[ Relationship between BOD and Bank Management ]

It should be noted that along with management development, the Board of Directors is responsible for creating a skilled and progressive workforce. Appointing experienced and astute Utwartan bank officers can motivate the management to carry out quality efficient activities through proper and clear procedures and techniques. Thus, proper organizational management organizational structure can help the management to take the right decisions and achieve the best goals through committees of directors by ensuring clear authority and responsibility flow.

Bank’s internal and external communication system, staff dispatch, staff morale, shortage of staff, reviewing complaints to create a favorable working environment within the bank is primarily the responsibility of the chief executive of the bank. Provided that the chief executive of the bank is often a member of the board. But if not, the chief executive will bear responsibility for all these as the head of bank management.

It is the responsibility of the executive to see that the right officer is given the right job in terms of qualifications and experience. It is the responsibility of the Chief Executive to monitor whether the various trainings, promotions, transfers etc. are done on the basis of correct rules and policies.

Bangladesh Bank

Hence it is worth noting that management and board of directors are separate from each other but are related to each other. Management may not be able to achieve high results despite considerable sincerity in policy and strategy formulation. On the other hand, it is believed that management will be able to achieve high goals if proper management evaluates performance, rewards appropriate individuals for satisfactory performance and maintains indirect advice and control through committees.

Banking is becoming more and more complex every day. At the same time, the chemistry of relationships with stakeholders is becoming important. As coordinated management of all stakeholders of the bank can move the bank forward, incoordination can hold it back.


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