§ 1239.2 Definitions.

As used in this part, (unless otherwise noted): Board member means a member of the board of directors of a regulated entity. Board of directors means the board of directors of a regulated entity. Business risk means the risk of an adverse impact on a regulated entity's profitability resulting from external factors as may occur in both the short and long run. Community financial institution has the meaning set forth in § 1263.1 of this chapter. Compensation means any payment of money or the provision of any other thing of current or potential value in connection with employment or in connection with service as a director. Credit risk is the potential that a borrower or counterparty will fail to meet its financial obligations in accordance with agreed terms. Employee means an individual, other than an executive officer, who works part-time, full-time, or temporarily for a regulated entity. Executive officer means the chief executive officer, chief financial officer, chief operating officer, president, any executive vice president, any senior vice president, and any individual with similar responsibilities, without regard to title, who is in charge of a principal business unit, division, or function, or who reports directly to the chairperson, vice chairperson, chief operating officer, or chief executive officer or president of a regulated entity. Immediate family member means a parent, sibling, spouse, child, dependent, or any relative sharing the same residence. Internal auditor means the individual responsible for the internal audit function at a regulated entity. Liquidity risk means the risk that a regulated entity will be unable to meet its financial obligations as they come due or meet the credit needs of its members and associates in a timely and cost-efficient manner. Market risk means the risk that the market value, or estimated fair value if market value is not available, of a regulated entity's portfolio will decline as a result of changes in interest rates, foreign exchange rates, or equity or commodity prices. NYSE means the New York Stock Exchange. Operational risk means the risk of loss resulting from inadequate or failed internal processes, people, or systems, or from external events (including legal risk but excluding strategic and reputational risk). Risk appetite means the aggregate level and types of risk the board of directors and management are willing to assume to achieve the regulated entity's strategic objectives and business plan, consistent with applicable capital, liquidity, and other regulatory requirements. Significant deficiency means a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.