An educated board is an asset worth your investment

Editor's Note: This column ran in our Jan. 22 Pulse sent to nearly 14,000 email subscribers.In just a little more than a week, bankers will gather in Phoenix at the AOBA conference, the nationally-focused counterpart to the seminars offered semi-annually by the Bank Holding Company Association. .Board governance has been on my mind since attending a BHCA session last fall led by Jenn Docherty of Performance Trust. Docherty encourages community bankers to be intentional about sourcing board members, reminding them to select directors with expertise that reflects the markets they serve. The talent is out there, she said; finding it just requires more deliberate action. Doesn’t every worthwhile cause?And in the context of M&A, whether or not it’s on your radar, it’s important to position your board to evaluate strategic opportunities well before a transaction opportunity emerges. Ownership that assembles a board that is well prepared to think and act strategically will have done these three things:Skills assessment. It’s important to know the individual skills of each board member to set a baseline for any needed training or development, Docherty said.Succession planning. What plan does the bank have to address director retirements, which can occur quickly and unexpectedly? Will a retirement cause a board shakeup, which can be destabilizing? Banks need a plan (and hopefully a timeline) to replace all directors.Education. This is critical. Bring directors to educational events such as the national AOBA or the regional BHCA seminars. Education allows directors who aren’t in the day-to-day mix of operations to stay attuned to market fluctuations and allow them to be effective decision-makers. Furthermore, regulators demand it. And, if the unfortunate occurs and your board faces litigation, a proven plan of director education can shield directors from liability.I’ve been a lifelong proponent of continuous education. If it comes with a healthy dose of Vitamin D, all the better.