Management: Bank Directors Face an Ever-Evolving Role @sh#Board Members Are Increasingly Being Expected to Bring Business in the Door

By Monahan, Julie | American Banker, April 4, 2000 | Go to article overview

Management: Bank Directors Face an Ever-Evolving Role @sh#Board Members Are Increasingly Being Expected to Bring Business in the Door


Monahan, Julie, American Banker


Since the savings and loan crisis, the role of the community bank director has evolved from sometimes passive supporter of bank management to assertive overseer of corporate health.

The change was necessary to the survival of many institutions. Today the impetus is more than survival: Directors are becoming integral to community banks' competitive performance.

Many community bank boards have shifted in both composition and activity. Whether it's the board of a start-up looking to gain a foothold or an established institution fighting merged monoliths, the results share some similarities: diversified recruitment of new directors, higher expectations of aggressive business development, and closer integration with strategic direction.

Union Bank of Florida, a $300 million-asset bank in Fort Lauderdale, says its goal is nothing less than the resurgence of Florida's homegrown banks in a market buffeted by mergers. To this end, says Lynne Wines, Union Bank's president and chief executive officer, the board has expanded from eight to 12 directors, with a concentration of local business executives.

"These directors make the bank more aggressive in setting high-level goals," Mr. Wines says. "We now have the expertise we normally would not be able to hire. And because they are entrepreneurial, our directors want to look at partnerships and grow the bank."

One recent offshoot of this director involvement is a joint venture and minority ownership of Eras JV, an Internet and imaging software developer in Orlando that specializes in the financial services market.

The partnership was first suggested by board members. But the first step in transforming the Union Bank board was setting a goal for growth, then bringing current directors closer to the strategic vision of the bank and adding new directors to buttress that stance.

Part of that expected growth depends on the business development potential of the directors. "They are helping us reach out to companies we normally would not have access to," Mr. Wines says.

Independence Community Bank Corp., a $7 billion-asset company in Brooklyn, N.Y., restructured its board 10 years ago, replacing community leaders from education and the arts with commercial business executives from real estate, finance, and corporate law. "We've grown tenfold in the last decade," says Charles J. Hamm, chairman, chief executive officer, and president of Independence. "The rapidity of this growth is certainly a reflection of the board's vision and capacity."

To maximize the board's potential, Independence's directors sit on various committees that study issues of interest to the bank. Committees examine commercial lending activities, credit, audit responsibilities, and technology in a process that emphasizes the governance role of directors. This approach helps target the attention of selected directors who later share their findings with the board as a whole.

Committee-driven boards have become more common for community banks, especially growing institutions. "Committees leave the boardroom for the bigger picture," says Walt Moeling, a partner at Powell, Goldstein, Frazer & Murphy, a law firm in Atlanta. "In time there will be a real revolution to a much more focused approach to the business of

banking. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Management: Bank Directors Face an Ever-Evolving Role @sh#Board Members Are Increasingly Being Expected to Bring Business in the Door
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.