Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

DIRECTOR MISCONDUCT - RESPONSE  Unfortunately, limited response tools  Board’s failure to respond may be viewed as acceptance  Unintentional misconduct: – Identify (usually private conversation and director self-corrects) – Education about board and director role – Coaching to address personal styles – Director evaluations (provides a neutral setting) – Reprimand (private or public)  Intentional misconduct: – Removal (almost impossible; shareholder vote) – No re-nomination (reason for one year terms) – Resignation request (most directors will resign if asked) – Reprimand (public to protect company) – Isolation (form committee not including problem director)

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SITUATION: 4. DIRECTOR PROTECTION