As 2016 looms, your job as a bank director is ...

• Author: Thayer, Charles J.
• Position: ROLE OF THE BOARD

Today's bank board agendas tend to be long on compliance and short on strategy. It's time for bank directors to shift focus from reacting to the swinging pendulum of ever-increasing regulatory compliance and work with management to initiate strategic leadership to better serve their bank's customers and communities.

The pendulum of regulatory and compliance requirements is continuing to swing and this focus on compliance with both new and old regulations tends to dominate time on board agendas. Regulatory frustration is pushing many boards to consider selling to another institution. Investment bankers are urging boards to sell as the best alternative to maximize shareholder value. However, selling your bank may not be the best outcome for your shareholders, your customers and your community.

Small business provides most job growth and our nation's 5,600 community banks provide essential financial services to small business in communities, large and small, across our nation. As I have stated in numerous articles, our nation's banking system provides the credit and liquidity required for economic growth. In simple terms, an engine won't run without oil and community banks provide the credit [oil] for economic growth in the communities we serve. Community banks have experienced no meaningful loan growth during the past seven years, a period when community bank boards have been reacting to increased regulation.

Your job as a bank director is to help guide your institution and leadership requires shifting your focus to strategic action, not just regulatory reaction. The following points should help guide your board agenda as we enter 2016.

* People: Most experts say selecting the right CEO is the board's most important job; I disagree. I believe your board's most important job is to select, recruit and retain board members with the right skill sets required to provide appropriate guidance and oversight for management. The right board will select and retain the right CEO to lead your institution--poor boards lead to poor CEO selection.

Take the time as you enter next year to examine your board and make tough decisions if necessary; a bank director's job is too important to 'waste' a seat.

* Strategy: Your management and board are best positioned to identify the needs of your community and your bank must be positioned to service those needs. Effective strategy is not a large binder' on the shelf; it requires effective focus and action. As Yogi...