Tuesday, June 13, 2017

What Can Marc-Andre Fleury Teach Bank Boards?

It's a team sport.

Sure, he's a hockey goalie. I doubt he knows much about banking. Or how good Boards function. But he can teach us that a high performing Board works as a team for their constituencies. For professional athletes, it's for their team, teammates, and town. For bank Boards it's for their shareholders, customers, communities, and employees.

I recently attended the Maryland Bankers' Association annual convention. I attend many sessions for my own knowledge. And for the benefit of clients, and today, my blog readers.

One interesting session was The Importance of Board Composition and Succession to the Future of the Enterprise delivered by Regina Pisa and Matt Dyckman of Goodwin Law. I know. The topic title was a mouthful. Lawyers.

Interesting because an early point they made was that "strategic planning and board composition should be inextricably linked." Provocative because they recommended diversity, but not in the politically correct way, but rather "diversity of skills, knowledge, and viewpoint."

And I say Amen!

Last September I did an analysis of the Board composition of the best and worst ROE banks to see if there was any secret sauce to the best, and a recipe for disaster for the worst.  I could find none. All of the carping over CPAs or former bankers meant nothing to the bank's financial condition or performance. Possibly to the chagrin of regulators who suggest or outright tell banks to put this person or that person on the Board.

What does matter in my opinion, and seemingly the opinion of the good folks of Goodwin Law, was the interaction between Board members and the Board and Management, determines if a Board is high performing or not. Don't take my interpretation of their words. Look at their slides. Lawyers have lots of slides.



This is consistent with my experience.

If you want a high performing Board, consider it as a whole, deliberative body. If the body needs an arm, add an arm. Don't add another leg. This brings me to the other slide I'll swipe from their presentation (with their permission, mind you).


What you want is debate, but not for debate's sake or to hear those type A personalities talk. But debate to ensure management is following policy for safety and soundness. Debate that the Board reports are accurate, timely, and relevant. And debate to hold management accountable for pursuing the bank's strategy. Team players that build the team up and make the Board better.

What you don't want are yes men/women, gripers, or those that pursue self interest above all else. 

Which brings me to Marc-Andre Fleury. Last season he was the Pittsburgh Penguins starting goalie. He got hurt and his replacement did so well he took Fleury's job. This season, Fleury served as the second string goalie although he is very, very good. He stepped in when the other goalie got hurt and delivered two playoff series wins. One against my Capitals!

He never griped. Never brought the team down. In fact, he built the team up when called upon. And his team spirit played a key role in delivering a second straight Stanley Cup to Pittsburgh. 

That's why the Pens general manager called him "the best team player in sports". Because hockey is not an individual sport. It's the team that wins championships.

And so it goes with bank Boards.


~ Jeff

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