Appearance is everything, and for

National Commerce Financial

( NCF), appearance is about to change.

For the past two years, National Commerce has disclosed in its proxy statement that its chief financial officer, Sheldon Fox, is the brother of Jeffrey Fox, president of

Alltel's

(AT) - Get Report

information services division. Over that span, the Tennessee-based regional bank has paid about $6.5 million to the Arkansas telecommunications company for wide array of software and telecom support services.

But with the sale of Alltel's information unit to

Fidelity National

(FNF) - Get Report

, the sibling ties between the bank and the telecom are being severed -- at least partially.

That's because the software support services Altell has been providing National Commerce will now come from Fidelity National. But Alltel will continue to provide the 400-branch bank with telecommunications services, and Jeffery Fox remains a senior executive at the phone company.

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No big deal, arguably. But in the aftermath of

Enron

and other corporate scandals, some would say any appearance of corporate cronyism should be avoided. The National Commerce case is, in any event, a lesson in what you can find in a proxy statement.

"The reason Uncle Sam makes companies tell you this kind of stuff is because investors may think it's a problem," said Nell Minnow, editor of the Corporate Library, a corporate governance research organization. "We like to see the related transactions sections blank. It seems to me any related transaction has a heavy burden of proof."

That is to say, any transaction involving a corporate insider must be shown to be a fair one for the corporation and its shareholders, negotiated as part of an arm's-length process.

That's just how National Commerce describes its business dealings with Alltel. They're "substantially the same as could have been obtained in transactions with unaffiliated parties."

Fox, National Commerce's chief financial officer, goes even further in defending the bank's transactions with Alltel, noting that the bank had a business relationship with Alltel prior to his brother taking a job at the telecom company.

"They were a vendor before my brother joined Alltel. There is really no news," said Fox.

Maybe. Then again, the Alltel deal isn't the only instance of National Commerce doing business with a company that has ties to one of its top officials.

The bank last year purchased roughly a $1 million worth of a paper goods and other office supplies from Brame Specialty, a company run by James Brame, a National Commerce director. In 2001, the bank leased $200,000 worth of equipment from another of Brame's companies.

The bank in 2002 also paid $1.3 million in legal fees to law firms in which two other bank directors are partners.

Again, the proxy statement describes all these deals as fair ones.