Pub. 6 2017 Issue 8

December 2017 29 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s overviews of key laws and regulations before the board member’s first meeting and as laws and regulations are updated. • Strategic and tactical plans: Share current plans and those from the past three years to help the board member understand where the bank has been and where it is going. • Job aides: Provide a one- or two-page sheet of some of the abbreviations they might hear at meetings. For example, what is Reg H? What are some key lending ratios the bank is looking for? What are some policies and procedures such as CRA and ALLL? • A day with bankers: Have the new member spend time in several departments to understand what each does and how they work in concert for the benefit of the bank and the customer. This also helps humanize the new board member. Bored? Or Board Engagement? Engaging the board is the chairman’s responsibility. He or she is a meeting facilitator who needs to pull members into the conversation, according to Hubbard. Hubbard and St. Meyer said in order to establish productive and engaging board meetings, there needs to be trust between members and executives. This can take time to establish, and this trust has to be carefully managed. “It’s one thing to have a board member learn that this is a relevant question to ask the leadership; It is another issue to understand when and how to ask those questions,” St. Meyer said. “With all the changes in financial services, it is incumbent upon us as board members to stay current with industry trends,” Hubbard said. “It is up to the bank to provide board members with tools to stay informed and up to speed.” 7 Tips for Board Participation 1. Create a formal onboarding process for new board members. 2. Designate a banker buddy to help new board members better understand how to get things done and to build trust. 3. Survey or engage in a discussion with each member to gauge understanding on pressing topics. 4. Share regular communication with the board about essential banking topics through memos, articles or by uploading information to a board portal on your bank’s share drive. 5. Offer packets of relevant information and/or links to appropriate topic sources before meetings. 6. Present e-learning and self-paced learning opportunities on key topics. 7. Hold an annual one-day offsite meeting that combines business and social activities. This helps board members and bankers get to know each other better. Banks can encourage participation by board members and foster a sense of collaboration among them and the bank through ongoing formal and informal education of the board members, according to Hubbard. Creating anAtmosphere of Collaboration One way to evaluate overall board engagement is if all board members are asking questions, making recommendations and actively participating in meetings. To assist with meeting focus, consider asking board members to leave their cell phones outside the meeting room. Some questions to ask when this collaborative atmosphere is not apparent during board meetings are: • Is the agenda engaging? • Is the board packet full of one-dimensional reports or do the reports lead to insightful discussion? • Does the chairman explain situations, policies and laws well enough for board members to make valid decisions? • Are sales and marketing topics discussed? Are they at the top of the agenda to help the meeting start off with good energy? Is there an executive session at the end of the meeting where confidential topics can be discussed without management present? • Does the bank ask board members to take an annual survey to assess the meetings, the information they receive and other topics? Detecting Training Gaps During the evaluation and onboarding process, it may become apparent that individual board members or the entire board could use training in certain areas. An uninformed board not only leads to poor execution, it can be a precursor to lawsuits or worse. St. Meyer & Hubbard sees training gaps in all areas within the board process. “Lending is certainly the number one thing,” Hubbard said. “If you don’t understand what you are doing when evaluating and approving loans of any size, you are putting the bank’s capital at risk.” Hubbard suggests providing some level of credit training for directors to ensure they have adequate knowledge to actively participate in the loan approval process. “If you could get board members to take an e-learning class or have someone come in and say ‘here are some important things you ought to know about making a loan and approving a loan,’ that would be beneficial,” Hubbard said. “All board members need is the basics so they can ask the right questions before the up or down vote is cast.” OnCourse Learning Financial Services (formerly BankersEdge) is a full-ser- vice education and regulatory compliance provider in the banking, credit union, MSB, mortgage, insurance and gaming industries. To learn more about how OnCourse Learning can help your organization remain compli- ant, please email Craig Johnson or by 803-238-1010. OnCourse Learning is a training partner and endorsed vendor of the KBA. Information may be found at ksbankers.com .