Pub. 12 2021 Issue 2

Pub. 12 2021 I Issue 2 Summer 27 West Virginia Banker Remaining independent requires continuous focus on addressing the elements most important to the bank’s significant shareholders and the entire shareholder base. How shareholders value the stock can change over time. Management Boards must constantly focus on retaining quality managers while developing or recruiting the managers and leaders who can carry the bank’s mission into the future. Boards must also continually assess the technical and leadership qualities of the bank management team. This pillar requires board commitment to succession planning, compensation programs, staff and manager development and planning. Leadership Board leadership is a crucial determinant of longevity. The demands of corporate governance today are more significant than ever. High-performing boards are composed of directors with a combination of talent, experience and commitment. Maintaining and improving the board of directors should be a constant priority. Boards should not wait until a group of directors is ready to retire before recruiting and repopulating the board. It often takes several years for new directors to understand their role in the bank thoroughly. In addition, boards should work toward improving and adapting corporate governance practices. Corporate governance is a dynamic discipline. Boards should continually evaluate whether the board’s time, attention, and resources are devoted to the most important determinates of long-term success. Vision Vision is the most commonly neglected pillar of independence. Every bank should have a stated vision of the bank’s future value proposition. Vision must be something more than an abstract concept. A strong vision places the daily decisions of a board and management team in the context of the board’s chosen path to increasing shareholder value. A clearly articulated vision can bind the board, management, and staff to pursue a goal more significant than the sum of their daily activities. It also provides a framework for the board to model its definition of future shareholder value. Using the Pillars as a Structure for Making Decisions Board agendas should reflect pillar considerations Including discussions of all five pillars in monthly or quarterly board agendas can keep critical priorities before the board. We are what we do routinely. Boards that choose to prioritize all five pillars are much more likely to take actions that create a holistic approach to their bank’s future. Recognize that the process is never complete Corporate governance should constantly evolve. The best boards embrace the knowledge that the banks they lead are dynamic and changing. The board’s response should be to adapt governance practices to match that dynamism. Benefits Boards that prioritize all five pillars have a greater sense of the bank’s actual value for their shareholders. A board’s evaluation of the five pillars ensures a forward-looking approach to bank leadership. With a focus on the five pillars and a little good fortune, shareholders will continue to value investment in the bank over other investment opportunities.  Mark Mangano is Counsel with Jackson Kelly PLLC. Mark is a former community bank CEO and owner. He focuses his practice on assisting clients with strategic planning, corporate governance, banking regulation, and mergers and acquisitions. Contact Mark at (304) 670-0441 or mark.mangano@jacksonskelly.com . Boards must constantly focus on retaining quality managers while developing or recruiting the managers and leaders who can carry the bank’s mission into the future. Boards must also continually assess the technical and leadership qualities of the bank management team.