Western Independent Banker - November/December 2008 - (Page 8)

A Message From the President & CEO What Is an Effective Board? AS A RESULT of interest in board effectiveness evaluations and the increased importance of a highly effective board in today's environment, WIB recently appointed a task force of bankers and directors to investigate whether WIB should offer, recommend or endorse a board and/or director effectiveness evaluation program. One of the most challenging aspects of an effective board is the ability to work with the management of the institution effectively. To merge independent-thinking directors and motivated independent management personnel in a community bank environment requires a great deal of trust, open-mindedness and cooperation (not to mention keeping all egos in check). Our task force has compiled some characteristics that should be considered to measure an effective board and director: An effective board: • Understands what is the role of the board (governance) and what it is not (management) • Understands its independent, fiduciary responsibilities to shareholders • Has respectful, open and honest communications among all of its members and management • Has a well-defined and -documented organizational structure • Consists of independent thinkers with the ability to interact with a group and come to a consensus on decisions • Stays strategically forward-looking and focuses on broad issues that affect the direction of the company • Creates an open environment that encourages effective discussion and encourages constructive statement of opinion and dissent • Maintains objectivity in evaluating the company, its management and performance • Requires all board members to participate and allows no individuals to dominate the business of the board • Has its effectiveness evaluated and acts to improve any deficiencies in performance • Understands what drives the shareholder and market value of a bank • Has broad collective experience and perspective from "all points of the compass" • Understands and supports the strategic focus and specific business strategies of the company • Won't tolerate insider activities, ethical or legal violations or the appearance of such • Promotes transparency, accountability and professionalism • Is active in the community An effective director: • Takes the job seriously, takes the time to carry out the duties in a responsible manner and prepares adequately for board meetings • Has a good understanding of business basics • Does not micromanage management or dominate the board • Is willing to be evaluated as to his or her performance as a director • Objectively evaluates the company and its management and performance • Stays knowledgeable about the banking industry through ongoing education • Is a shareholder of the bank • Uses his or her influence in the community to bring good customers to the bank • Exhibits integrity and honesty beyond reproach • Is highly regarded and visible in the community • Has reasonable expectations for compensation that are consistent with industry levels Our task force plans to deliver our recommendations regarding board effectiveness evaluation programs at our Annual Directors Conference on November 6-8 in San Francisco. Nancy E. Sheppard P id President & CEO 8 www.wib.org Western Independent Banker http://www.wib.org

Table of Contents Feed for the Digital Edition of Western Independent Banker - November/December 2008

Western Independent Banker - November/December 2008 Contents A Message from the President & CEO A Practical Approach to Director Evaluations Director Assessment: New Standards for a High Performing Director The Best of the West: Traits of High Performing Banks Best Practices Checklist for the Audit Committee The Real Performance Metric: It Takes a Balance of Profitability and Growth to Be Successful The Role of the Board in a Credit Crisis A Bank Director's Obligation to Be Aware of Regulatory Change Benefits Tied to Performance Receive Higher Approval Rating by�Board Members Increasing Shareholder Value: Key Profitability Drivers Board Portals Streamline Efficiency for 21st Century WIB Service Corporation Report WIB Calendar Welcome New Members Index to Advertisers advertiser.com

Western Independent Banker - November/December 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.