5423caca_FDIC__2004_Annual_Report__Challenge
[No.] 1 [Brief Description] Corporate governance is generally defined as the fulfillment of the broad stewardship responsibilities entrusted to the board of directors, officers, and external and internal auditors of a corporation. A number of well-publicized announcements of business and accountability failings, including those of financial institutions, have raised questions about the credibility of management oversight and accounting practices in the United States. In certain cases, board members and senior management engaged in highrisk activities without proper risk-management processes, did not maintain adequate loan policies and procedures, and circumvented or disregarded various laws and banking regulations. In an increasingly consolidated financial industry, effective corporate governance is needed to ensure adequate stress testing and risk-management processes covering the entire organization. Adequate corporate governance protects the depositor, institution, nation�s financial system, and FDIC in its role as deposit insurer. A lapse in corporate governance can lead to a rapid decline in public confidence, with potentially disastrous results to the institution. The FDIC�s efforts in achieving sound corporate governance without undue regulatory burden remain a management challenge. [Challenge] 
Corporate Governance in Insured Depository Institutions
FDIC: 2004 Annual Report