Academic journal article ABA Banking Journal

Ongoing Struggle with Board Size: Bridgewater Savings Put Its Board on a Diet and Built a Succession Program

Academic journal article ABA Banking Journal

Ongoing Struggle with Board Size: Bridgewater Savings Put Its Board on a Diet and Built a Succession Program

Article excerpt

Like pounds that sneak on between physicals, boards can grow and yet not seem weighty until an outside party points it out.

[ILLUSTRATION OMITTED]

"The regulatory agencies said, 'You've got a big board of trustees'," recalls Robert Todd, nonexecutive chairman at $510 million-assets Bridgewater Savings, Raynham, Mass. "'How do you manage them?'"

Indeed, the 138-year-old mutual's board had swollen to a veritable host of 22.

The trustees, who perform similar duties as directors, traditionally are drawn from the board of corporators. (Unique to the mutual charter, corporators are akin to advisory board members and often are descendents of the mutual's founders, as well as other civic leaders.) Three of the trustees, Todd and CEO James Lively knew, would like to retire, but felt they had made a commitment. The bank has a mandatory board retirement age of 72, but offered a special early- retirement package in hopes of giving these trustees a graceful way to bow out.

Actually, 11 trustees took the attractive package.

Subsequently, a mutual holding company was formed. In the process, the MHC formed its own board of trustees. The bank, now a stock corporation, turned its board of trustees into directors (they serve as MHC trustees as well).

The number of outside directors of the bank had fallen to ten when, earlier this year, the company completed a merger with smaller East Bridgewater Savings. Sometimes mergers can bloat a board all over again. …

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