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Better Strategic Planning
Should more boards take an active role in their bank’s strategic plan?
Bank Director’s 2026 Governance Best Practices Survey shows that many boards don’t take an active role. More than half say their board establishes the bank’s risk appetite — a key baseline to develop a strategic plan — but management develops that plan with the board’s approval. Twenty-two percent say the board develops the plan with management, but one-quarter are relatively hands-off.
Boards have an obligation to ask questions about the strategic plan, including management’s assumptions and associated risks, according to the Office of the Comptroller of the Currency’s “Director’s Book.” While the board won’t implement the plan, directors “should recognize whether the bank has a reasonable strategy and, if not, challenge management’s decisions, drive sustainable corrective actions, or change the strategic direction, as appropriate,” the OCC wrote.
“I would like to see board members be more curious about how things are being done and why they're being done,” said Bank Director Executive Vice President and Managing Director Bill Herrell in a recent webinar, where he shared how boards could enhance strategic planning. Board evaluations could help directors weigh in on growth opportunities, risks and internal hurdles ahead of the strategic planning session, he said. “We’re trying to get to an honest assessment of the organization.” However, evaluations are used annually by only 39% of survey respondents.
Boards could also better monitor progress on the strategic plan to ensure that objectives are met, said Herrell. If goals aren’t achieved, that’s an opportunity to ask management why and determine if adjustments need to be made. In the survey, 44% said better measurement and monitoring would improve the strategic planning process. Herrell said objectives set by management and the board are frequently imprecise. “A lot of the strategic plans that I see, they don't have measurable goals in them,” he said.
And directors should ensure that updates are included in board materials and expect to discuss the strategic plan regularly — at least quarterly. Annually, the assessment process could help spark discussion about whether it’s time to pivot on the objectives set in the plan. “Rarely do I see a report in the board package that says, ‘Here's where we are relative to our plan,’” Herrell said. “Set some time aside in the agenda to say, ‘OK, we're going to talk about why we're on plan or why we're off plan.’”
• Emily McCormick, vice president of editorial & research for Bank Director
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