What role do directors play in the strategic planning process?
From my perspective, bank directors have four critical duties, the first of which is to increase shareholder value. Secondly, they need to develop a strong strategic plan. This is important not only to the future of the bank, but also to the regulators monitoring its activities. Regulators want the plan to come from the board, with the help of management. They want to know that it’s not one of the canned versions of strategic plans that are out there. And most importantly, they want to know that the directors worked prudently through all of the logic, gave considerable thought to where the bank should be strategically, and defined it clearly through the plan. You recommend that community bank directors implement a 10-year strategic plan as opposed to the typical three- or five-year plan. Why is that? Bank directors need to focus on long-term strategic goals versus the three- to five-year timeframes. Three years is a good range for the tactical part of a board’s plan and a reasonable ti
