The directors’ agenda

This year marks the 10th year in a row we have devoted our March magazine to the recognition of Amazing Outside Directors. Bank directors have to consider multiple high-level issues which ultimately affect the overall direction of their institution. Here are some of the issues that I suspect are showing up on board meeting agendas these days..Artificial Intelligence is THE topic of discussion wherever you go. Years ago, bankers were concerned about how to make better credit decisions. Today, it’s not deciding what loans to make, but figuring out how to offer the best customer experience to the people borrowing the money. And AI seems to be the critical component to creating an efficient, smooth, reliable customer experience. So while we hear a lot about innovation, the real challenge is execution.Tech-based solutions (is there any other kind?) mean the stakes are high for board members and every member of the bank staff that is responsible for implementing them. There is no such thing as a small “tech” innovation. These are generally big, expensive decisions that mean implementing solutions that cannot be easily “undone.” These are all five-year decisions, at a minimum. You really cannot afford to get these wrong.Fraud has emerged as the biggest hole in the side of the ship at most banks. I have seen multiple credible industry surveys citing bankers who say fraud mitigation is a top priority, and they are backing that up with plans to spend substantial dollars on this effort. (Often, the solution involves AI.)Payment systems innovation is huge, upending a traditionally staid facet of the banking industry. Operational issues around payments used to be reserved for people comfortable working third shift in a windowless room in the basement. Today, in addition to FedNow, RTP,ACH, credit and debit rails, payments means figuring out stablecoin. The GENIUS Act put this squarely on the board meeting agenda, and no board can afford to set this one aside for very long. And with industry rules still up in the air, meaningful discussion can be elusive. And no board can avoid regular conversations about M&A. In the past, M&A was about the balance sheet, but today it is just as likely to be about tech and talent acquisition.While it is still an honor to serve on a bank board, the role is now more demanding than ever, requiring extensive study, research and discernment. Props to directors everywhere.The five directors we are honoring in this month’s magazine are:Cathy Durham, Lake Ridge Bank, Middleton, Wis.James Wieland, Bell Bank, Fargo, N.D.Karl Bollingberg, Cornerstone Bank, Fargo, N.D.; Federal Home Loan Bank of Des Moines and the Bank of North Dakota.Jim Johnson, Bridgewater Bank, St. Louis Park, Minn. Dan Rust, United Valley Bank, Crookston, Minn.