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Better Board Meetings: No snoring allowed

Directors and experts share techniques for more effective board deliberations 

Better Board Meetings: No snoring allowed
Years ago one of the tips booklets given out by the Dale Carnegie folks suggested that the best way to keep meetings short was to remove all the chairs from the meeting room. Standing for the whole meeting was sure to keep things shorter.

Bank board meetings often generate sniggers—look at Sam over there, dozing off in the middle of the financials, again, or the like. But most directors and trustees have busy schedules, and, if they are going to commit a piece of them to a meeting, they want the gathering to be an effective one.

But there’s much more to a productive board meeting than bodily comfort and total consciousness. Doing the right things the right way in the right time—that’s the ticket.

During ABA’s recent National Conference for Community Bankers, ABA BDB sponsored a director peer group session moderated by Jeff Gerrish of Gerrish McCreary Smith, PC, and Robert Todd, chairman of Bridgewater Savings, Raynham, Mass. It was a session chock full of give and take from the moderators and the audience, who provided many of the solutions they themselves have come up with for boardroom challenges. One of the most common topics raised in the meeting was how to make board meetings more effective and efficient.
How long is too long?
One client bank of Jeff Gerrish traditionally held board meetings that lasted four hours. Four hours seemed like a long time to the attorney. He asked why it took such an eternity to handle the board’s usually routine business.

“Well, we start at 8:00 in the morning, and we always end at lunch,” one director told him.

“Well, you could probably hold it to three hours and end at 11:00,” said Gerrish.

“Oh, but we always end at lunch,” he was told.

Gerrish pondered this for about ten seconds and said, “Then why don’t you start at 9:00?”

The board thought that was great, and now it has three-hour meetings.

Co-moderator Bob Todd shook his head as he heard that story. “I hold my meetings to no more than two hours,” said Todd. “Realistically, you can’t expect board members to sit there and listen to presentations and do what they should be doing in the meeting after three or four hours. They’re all falling asleep, and they’ve all lost track of where they are.”

The challenge is, with more and more landing on the board’s plate to chew on, finding ways to hold the meetings down to a reasonable amount of time has become critical. Solutions discussed in the session included: improved meeting agendas; the role of board committees; the appropriate place and time for staff presentations; helpful tools; and the role of advance preparation.

Take one comfort: Your bank is very likely not in the spot that one of Gerrish’s clients was in, again, because of tradition.

That bank’s board meets weekly. Gerrish asked the CEO what his typical week was like.

“Well, the board meets on Wednesday,” the CEO answered. “Monday and Tuesday I prepare for the board meeting. I spend almost all day in the board meeting on Wednesday. On Thursday and Friday, I try to undo what the board did. And then Monday we start all over again.”

Gerrish thought this obvious micromanaging could be cured by shifting the board to a monthly meeting format. But they wouldn’t budge—the board had been having weekly board meetings for 50 years and not one director wanted that to change.
Streamlined agendas
Too often, Gerrish said, boards spend most of their meeting time “driving with the rear-view mirror.” That is, typically a good deal of the meeting is taken up with looking at the past. “Do you really need the CFO standing in the front of the room reading the entire financial statement to you?” Gerrish asked.

A solution to spending the meeting on one long recap is the “consent agenda.” Simply put, the consent agenda is a short agenda of items that have been covered in the board packet. This might include the financials; minutes of the last meeting; committee reports of an noncontroversial nature; routine items that rarely change—basically anything that truly requires no discussion, absent an objection or significant question. The chairman simply announces the consent agenda, and it is approved unless someone speaks up.

“You have to review your own present agenda and decided what makes sense for your bank and board to put on the consent agenda, all with the goal of streamlining the meeting,” said Gerrish.

What’s more important is to understand what doesn’t belong on there, and why saving time is so important. Gerrish believes the priority ought to be matters of strategic importance and matters involving significant risk to the bank.

Sometimes part of the process is warning the usual players that their time allotment is being cut back. “You have to go to the CFO and say, ‘You know that 20-minute speech you make every month? It’s going to be three minutes long now. So pick out the top three things you want to be sure the board knows, and assume everybody’s read everything else in the financial packet’.”

Several listeners said their boards chopped out blocks of time by limiting discussion of such items to the airing of any variances from plan or norm.

A variation on the consent agenda concept that one listener’s bank uses is a split-frequency approach to meetings. Monthly meetings are still heavily devoted to hard-core governance duties: compliance issues, financial reports, and such. But once a quarter, the board holds an additional gathering, called the “operations meeting.”

At that gathering, board members agree in advance to focus on one major issues—say a significant loan category that needs consideration.

“In this way you focus on key areas, and you are not stuck at that meeting with all the governance items,” the listener said.

One board member said his bank maintains a strategic planning committee, which meets monthly. “They discuss not only issues that have been discussed on the main board’s planning agenda in the past, but also any new issues that come up,” the director explained. The full board maintains a regular agenda item each month to talk about strategic planning, as well, and feeds off the committee discussion.
Role of board committees
According to the classic edition of Robert’s Rules of Order, “a committee is a body of one or more persons appointed or elected by an assembly or society to consider, or investigate, or take action in regard to, certain matters or subjects, or to do all of these things. … It is usual, in deliberative assemblies, to have all preliminary work in the preparation of matter for their action done by means of committees.”

Somewhere along the line, some boards have forgotten this basic, and the directors ignore the committee reports and recommendations.

“Empowering committees” was a phrase heard from some in the audience who recommended doing so to make board meetings more efficient. Actually, it would seem that this is a return to the original concept of committees.

“I’ve had a lot of boards ask me how to make their meetings more efficient,” said Gerrish, and he asks them how they run the meetings now. “So they’ll tell me, ‘We delegate stuff to the committees, and then it comes back to the board and the board discusses it all again’.”

Gerrish paused and said, “So, why bother having a committee?”

One listener said his bank had a process for making committee work meaningful. First, board members who are not on a committee may, if they know of a matter due to come up at a committee meeting, attend to find out what’s going on. Second, unless the committee’s report indicates that there was dissension on a matter, it generally will not come before the entire board for new discussion.

In a similar fashion, audience members indicated that the days of having a bunch of department heads make a monthly presentation are passing. “We used to do that, but it went on forever,” said one director. “Now, one individual a month is chosen.”
Electronic tools can help
Several members of the audience have streamlined meetings by improving the way they distribute advance discussion materials. Instead of mailing them, their banks use electronic solutions. Some of these are secure internet portals, and others take other forms. The operative part is that there’s a degree of trust and faith involved.

Not faith in the technology—faith in the directors.

“Our board members can log in online and go through all the material on their own time, in advance,” said one director. “But you have to put a lot of faith in the idea that they are going to do that advance work on their own time.”

“Hmmm, like when you see the director walking into the meeting ripping open his or her board package just before the meeting begins?” asked Gerrish.

Another director said his bank was pretty pleased with advance presentation of online materials: “The volume of items that we used to go through at our monthly meetings when everything was done in hard copy was just terrible. There wasn’t enough time for going through the material at the meeting and still having meaningful discussions. So we got online and it’s worked out very well.”

The director said the online portal was particularly helpful for directors who travel frequently for their own businesses. Now, no matter where they are, they can keep up.

Another director’s bank has equipped the board with iPads, enabling them to quickly page through documents during meetings rather than waiting for PowerPoint presentations to be made. Gerrish said he’s seen some banks equip their boards with laptops the same purpose.
Bank Directors Briefing has been published for directors by veteran banking journalists of the staff of Banking Exchange for more than 32 years. If your board is looking for a new boardroom publication, we’d love to hear from you. Email the editor, Steve Cocheo, at [email protected]


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