As a new board member for the bank let’s cut to the chase. You’re incredibly busy adjusting to your new roles and responsibilities and do not have time for nonsense. Your responsibilities include critical tasks like the bank’s profitability and its safety and soundness. First, where is the banks risk appetite statement? I must read and review it. The risk appetite statement is central to the banks strategic plan. We need the risk appetite statement to inform our strategic plan.
Second, what and where is the most recent board approved strategic plan?
It is crucial to read and review that strategic plan and determine if it is in alignment with the risk appetite statement. When the board meets, you must have visibility into data and information so you can perform effectively:
You and your board must have accurate data and information that is both brief and concise. The information being provided upward from the various levels of the bank must answer the following:
- How is the bank going to make money?
- How is the bank going to grow profitably?
- How are we going to accomplish our strategic objectives or imperatives?
- How are we going to be alerted to problems or even crisis that may be percolating in the interior or exterior of the bank?
- How are we going to identify opportunities that we should be considering more risk and activity to increase the bank’s profitability?
While serving on other bank boards’ over the years, it was common practice for the board to receive reports that were fifty pages or more in length. These reports are too detailed and difficult to make sense of. We need a simple report that answers the questions such as the ones listed above.