Background of the Study
Karla Martinez, a 36-year old CPA with an MBA degree, was asked by her 66-year old aunt to take her place as a director of the Rural Bank of Galvez in a southern Mindanao Province. Martinez’s aunt had been a director of the bank for over 15 years, and has grown tired of attending the Board meetings of the bank. Karla Martinez was delighted by the offer. She felt that accepting the position would give her an excuse to visit her mother’s hometown and meet her relations there. She was also enthused because two of her relatives in Galvez were also members of the Board –Tony Gonzalez, the bank’s president, and Jaime Villa, the treasurer. The Rural Bank of Galvez was held by two prominent families which founded the bank in 1970—the Gonzales Family and the Montes Family. The two founding families had roughly equal stockholdings in the bank (though each would argue to have more than the other). Throughout the years, at least six of the seven directors of the bank came from these two families—three from the Gonzales side and three from the Montes side. The ‘equal’ participation of the two families extended to the sharing of key positions in the bank. The chairman of the Board and the vice president and general manager were from the Montes side, while the president and the treasurer came from the Gonzales side. On her first Board Meeting held March 2, 1999, Martinez commended the bank for having operated profitably in the previous year despite the continued Asian Financial Crisis. She, however, raised a question on what seemed to her to be an uncomfortably large loan portfolio for the bank. As an outsider to the town and a newcomer in the bank, she felt she could provide a fresh and different perspective on the operations as one of its directors.
Statement of the Problem
How will Karla Martinez solve the problem of indifference of the members of the board in running the affairs of the bank?
Areas for Consideration
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