Building a Higher Performance Bank Board

This is the first of five bank director “education”-type posts on About That Ratio.  Against yet another snowstorm in D.C., I’m gearing up for a Bank Board Training Forum in Nashville later this week and will share various thoughts that tie into our “strong board, strong bank” philosophy.

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Today’s post is not a “check the box” criteria for how a bank’s board should operate; rather, a personal observation based on numerous conversations with CEOs, Chairmen and outside directors.  Simply, when it comes to building a high performance board, I would ask each member of the board to consider:

  1. Are you prepared to lead when something big happens (e.g. a regulatory agency takes action against the institution… an unexpected takeover attempt, etc.)?
  2. Have you given succession planning serious time and attention for your next generation of leaders?
  3. What kind of diversity of perspective do your fellow board members bring to the table – and how are these used to strengthen the bank?

Although bank boards have certain duties that have been prescribed by law or regulation, I’ve learned that an individual board’s role is defined as much by culture and tradition as by an external requirement.  While building a higher performance board is as much an art as it is a science, I’ve found asking “better questions” leads to better results.

If you’re interested…

Here are three free resources that can help you go deeper into this topic today:

  • Jack Milligan authors The Bank Spot – a must-read blog about banks & banking, written from the perspective of a veteran financial journalist (and yes, Bank Director’s editor)
  • Weil is one of the pre-eminent corporate governance counsel
  • McKinsey recently published “Building a Forward-Looking Board” (registration required)

One thought on “Building a Higher Performance Bank Board

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