Independent Banker - December 2023 - 21

gaping holes in technical expertise,
such as cyber, which can be hard to
remedy with their current boards.
For community banks struggling to
find tech expertise for their boards,
it's important to be flexible, says
J. Scott Petty, managing partner,
financial services, at Chartwell
Partners in Dallas.
For banks in rural communities
that have to go to other markets for
tech expertise, he suggests holding a
few virtual meetings a year to make
the demands on the new directors'
time less onerous.
reason than that the bank has grown
and the necessary expertise is lacking.
For example, according to Kaplan,
there could be a multibillion-dollar
bank with $60 million to $100 million
in revenues, with no one on the
board who has ever run a company
with more than $5 million in
revenue and 20 employees. Boards
at community banks that have
rapidly expanded need to figure out
ways to bring on new directors with
appropriate experience.
Some banks have also identified
An " intentional " process
In recent years, $2.9 billion-asset
First Mutual Holding Company,
parent to five mutual banks in the
Midwest and the mid-Atlantic region,
has reimagined and rebuilt its board
succession process, according to
CEO Thomas Fraser.
" A decade ago, [our board
succession process] was more
reactive, " Fraser says. " We've evolved,
and we're now very process driven
and intentional. "
Twice a year at First Mutual, the
nominating committee of the holding
company's board reviews the board
matrix. This matrix maps out directors'
terms and skill sets and highlights
other key objectives, such as ensuring
the board is diverse and inclusive.
More from ICBA
The ICBA Bank Director
Program provides an annual
subscription to director
resources for the entire
board-see details at
icba.org/education/bankdirector-program
And
for the full educational
experience, check out
the Bank Director Forums
happening quarterly
throughout 2024. Learn more
at icba.org/education
Becoming more intentional " allowed us
to deepen the skill sets of the board and
to widen its perspective, " says Fraser.
As part of this, the board imposed
a mandatory retirement age of 75 for
members of the bank holding company's
board. But for some of its banks' boards,
the retirement age is 72.
" When life changes, that gives
us an opportunity to say,
'You're no longer fulfilling all of
the characteristics of an ideal
director, so maybe now is a
good time to part ways.' "
-JIM L. TUBBS, LAKE RIDGE BANK
Specifying a retirement age ensures
that directors understand their timelines,
Fraser says. " It creates turnover for the
board at various points, which I believe
is a good thing, " he says, " and it removes
the need for awkward conversations. "
Kaplan, who has consulted on board
succession and other issues at First
Mutual, urges community banks to
attend to a range of issues in addition
to age and tenure. Everything from a
director's location (have they retired to
another state?) to preparedness (are the
500-page board packets getting read?)
should be evaluated.
Evaluating current board members
" This director is a troublemaker. " " This
person has checked out. " " This person
is micromanaging staff. " These are the
independentbanker.org // 21
http://www.icba.org/education/bank-director-program http://www.icba.org/education/bank-director-program http://www.icba.org/education http://www.independentbanker.org
Independent Banker - December 2023

Table of Contents for the Digital Edition of Independent Banker - December 2023
