For banks smaller boards may be better

Banks have made strides in corporate governance but there is still some work to be done.

In the wake of corporate scandal, the banking industry has made strides in improving its corporate governance standards with improved compensation practices and better executive succession plans.

But when it comes to its board of directors, the banking industry may want to take a serious look at who's sitting on its boards and trim the fat, according to corporate governance experts.

"The board structure among banks is still pretty poor," said Mark Watson, senior vice president of Moody's Investors Services. "We're critical of boards that get too big and directors tell us that smaller boards are more effective."

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