September 10, 2017
FMS Quick Poll: ALCO Composition
By Financial Managers Society

Who gets invited to the party?

Our latest Quick Poll on who gets a seat at the table in the asset-liability committee meetings of FMS institutions was inspired by a question initially posed by a member on FMS Connect: who is on your ALCO? Among the 185 responses (147 from banks and 38 from credit unions, representing a cross-section of asset sizes), we of course found a heavy emphasis on the usual suspects – CEO, CFO, senior loan officer, etc. – but a number of less common attendees as well, including a representative from HR at one institution and an ALM model analyst at another.

The options provided in our multiple-choice question were fairly straightforward, but their uniform ALCO participation wasn’t necessarily so (Figure I). While President/CEO (97%) and CFO (96%) checked in as near-unanimous selections, an ALCO invitation wasn’t nearly as much of a sure thing for senior retail officers (59%) or controllers (43%), and CIOs found themselves on the outside looking in more often than not (20%).

One of the driving forces behind the original query posted to Connect was the notion of Board members attending ALCO meetings, and the response in our Quick Poll was decidedly mixed on the topic. Just over half of respondents (54%) noted that a director or other Board representative was regularly present for ALCO meetings. However, some poll participants clarified this position in the “other” category, where several respondents, for instance, noted that their full Board is on board for ALCO.

A number of common choices helped round out the rest of the write-in candidates in the “other” category of our poll, with the chief operating officer, chief risk officer, chief credit officer, treasurer and heads of marketing all receiving multiple votes (Figure II). Some of the other one-off ALCO participants offered in this section included branch managers, risk management officers, financial analysts and VPs of finance, deposits and service delivery.

In addition to asking poll participants who comes to ALCO meetings, we also wanted to know how often those meetings take place (Figure III). While quarterly (50%) and monthly (42%) were the most popular intervals, a number of other write-in scheduling options were proffered, ranging from bimonthly to twice a quarter – as well as four respondents who favor weekly ALCO meetings.

Thanks again to everyone who participated in our latest FMS Quick Poll. If you didn’t have a chance to complete the poll, be sure to weigh in with your views on social media or on FMS Connect!

FMS Quick Poll