By Debra Cope
This article accompanies an ABA Banking Journal feature on board refreshment. Click here to read the feature.
What are some steps boards can take to keep adapt to industry change? Board members and industry experts offer several tips:
1 Harness technology to make board service easier for busy executives. Inserra cites a client bank in Florida that has a board member in Colorado who attends nearly all meetings remotely. “It’s common these days to have board meetings where at least one person is calling in,” he says. “Banks can use that to attract new talent.” The key is to make sure meetings are secure, which is particularly important for banks. Directors may be required to log in using the bank’s iPad or other device for security reasons.
2 Don’t fixate on age. “If the only thing a 62-year-old board member ever does is second a motion, they’re probably not adding value,” Inserra says. “I’d rather see a 72-year-old board member who is willing to ask questions and challenge management.”
3 Evaluate the board. “I’ve not seen age or term limits be especially effective,” McAlpin says. “What bank boards need are annual 360-degree evaluations in which directors and management are really candid about the impact and quality of their service.”
4 Stay focused on strategy, not day-to-day decisions. Many boards are more deeply involved in decisions such as loan approvals than they need to be, says John Gorman, a partner in the law firm Luse Gorman in Washington, D.C. “The job of a director is not to slog through numbers,” Gorman says. “The board should be much more focused on strategic direction and engaging management in big questions, such as ‘Where are we going?’ and ‘How do we get there?’” Gorman says. He cites risk management, technology and cybersecurity as some of the areas where forward-looking boards are concentrating their energies now.
5 Be intentional. It is important to look for ways to put people into leadership positions, Goodenow says. He questions whether any board member should be chairman of a committee “for life” and says he has encouraged board members to step up to lead even technical roles, such as the audit committee, if they had the drive to learn the ropes.
6 Make time for purposeful social events. The flip side of allowing remote board attendance is that boards need to be more deliberate in building relationships and thereby building the trust that enables directors to be candid with one another, Inserra says. Having people arrive the night before a board meeting or retreat for a casual dinner is one effective approach to fostering camaraderie. Assigning seats can help ensure that directors mix rather than congregate with those they know best.
