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Bank Board Accountabilities

Directorate Meeting Efficiency Suggestions for the Community Bank

By: Debbie L. Meyers, Senior Consultant, Bank Strategies LLC

May 2013

Directors play an integral role in establishing a risk appetite and assessing key risks facing the community bank.  Oftentimes, however, board packets and reporting to the board is so overwhelming that board members “get lost” in the details.  While disclosure is very important, as a result of the extent of the information provided in board packets, most boards find themselves focusing on the more detailed and tactical issues as opposed to providing comprehensive guidance and important strategic direction to bank management. 

What steps can community bankers and directorates take to improve the focus of board members and board meeting efficiency?

One initiative the organization should strongly consider is to undertake is an assessment of the current board packet to determine how the information provided to the board supports directorate decision-making and facilitates oversight responsibilities.  When completing this assessment, the organization’s goal should be to find the proper balance between providing details and specifics to ensure proper disclosure to the board to one that allows the board members to fulfill corporate governance expectations.  Specifically, the review should result in a board packet that facilitates the board’s effective monitoring of management’s compliance with overall risk parameters established by the board, and should lead to the measurement of the progress in achieving key strategic goals and objectives.  To further enhance the board packet, the organization might also consider the option of using a “corporate scorecard” or “heat map”.  Often, these types of reports provide a reference tool for determining those areas where the organization may be falling outside of risk parameters, performance targets, and strategic goals and could quickly focus directorate attention on key issues emerging within the organization.

Revamping the board packet of the community bank may take considerable time and effort to accomplish.  However, sound management information systems for board reporting leads to better decision-making for an important governing and oversight body of organizational risk.  When undertaking this effort, the organization may wish to consider review of portions of the packet over time to make the project more manageable.

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