Magazine article American Banker

Latest Target for Downsizing: Banking Boards of Directors

Magazine article American Banker

Latest Target for Downsizing: Banking Boards of Directors

Article excerpt

The local board of directors, one of the cornerstones of a community bank, apparently is no longer sacred.

More multibank holding companies are considering doing away with multiple boards, to become more efficient.

First Busey Corp., for example, of Champaign-Urbana, Ill., last month completed an eight-year consolidation of its $850 million-asset organization, which in the late-1980s consisted of eight separately chartered banks, each with its own board.

Last week it announced it took the final step in this overhaul: merging the boards of its four remaining entities - a trust company, securities company, subsidiary bank, and holding company - into one 17-member board that serves all four.

"I'm not aware that it's something that's become predominant in the industry, but I think it will become so," said P. David Kuhl, chief executive of First Busey.

The choice is a more streamlined company versus the business ties that a local board can bring. More community bankers, even some die-hard advocates of decentralized supercommunity banking, appear to be leaning toward more simplified structures.

Mr. Kuhl said the move won't create any cost savings, as most of the directors already served on each of the boards. But it will save time that had been used for holding four separate board meetings each month. It also will make each director aware of all the different facets of the company.

"We are trying to create a seamless organization," Mr. …

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