Strategic Planning: Board Approach
June 20, 2024
 |
7 minute read –We have spent thousands of hours working with Boards and Leadership teams on strategic planning and we regularly get asked, “How can a Board, made up of individuals who often are only able to focus on the financial institution during monthly meetings or annual planning sessions, be more strategic in their thinking?”
Most of the Boards we work with want to support the financial institution’s Senior Leadership Team and the long-term viability of the organization, but a challenge for many volunteers is the infrequency with which they get to immerse themselves in this world. We have some suggestions on how Senior Leadership Teams can support their Board and how Boards can set themselves up for a rapidly changing future.
- Thinking for the sake of thinking – As suggested in a previous blog, we believe there is incredible value in making and taking time to think without the pressure of decisions. This is just as important for Boards and can be an opportunity for Leadership and Boards to check in with each other as far as risk tolerance and awareness of potential game changers. Taking time to work through possible future scenarios can help Leadership and the Board develop a clearer understanding of necessary steps for the longevity of the financial institution.
- Rework Board packets – In order to make time for thinking for the sake of thinking, many boards and leadership teams are reevaluating what goes into the board packet. What does the board really need to know? Imagine the board member only has 10 minutes to look at the packet. How can you make it easy for them to zero in on what is most important? How can industry jargon be made more digestible by volunteers who may not be in it every day? Get agreement from the board on items you can stop including – are there reports that were requested in response to something that is no longer relevant?
- Committee structures – Another way some boards are working to create more time for thinking is by reducing the number of standing committees they have, opting instead for short-term committees created to address specific needs such as a Hiring Committee. Otherwise, we have seen boards struggle to develop clear expectations of engagement and communication to work better together.
- Range of right mindset – Eventually, thinking does turn into decisions. Historically, many organizations have set their goals for desired financial performance (such as ROA or Net Worth) as specific numbers. Many of our clients are finding that this methodology and mindset is no longer serving them in a world of swift market changes and even faster consumer behavior changes. Instead, organizations are aiming for a “range of right” – this allows for flexibility to respond to an unpredictable future.
As we have mentioned before, more and more organizations are approaching strategic planning as a year-round process: this includes boards. Taking time at each board meeting to practice thinking for the sake of thinking can help prepare for multi-year, multi-path possibilities, which can enable institutions to be more flexible and change to meet the challenges of tomorrow faster.
