Banking Perspectives


June, 2015
Recent M&A Transactions



Why Board Strategic Planning Meetings Are So Important?
by Marcus Faust - Managing Director
Given all of the responsibilities bank boards have, regular board meetings rarely leave time to address the really important questions regarding the bank's strategy, the board's risk appetite and the bank's ability to withstand risks from the perspective of its earnings and capital. Both executive management and the directorate can find themselves spending most of their time together focused on last month's or last quarter's financial results and the myriad of reports required to be reviewed, many of which are for regulatory compliance purposes. That can easily cause most of us to lose sight of the "bigger picture" questions such as: Have we achieved what we set out to achieve? What do we want to accomplish over the next three years? Are the goals we have set to achieve in the best interest of our shareholders and other constituents?

To answer the aforementioned questions, it is important that management together with the board take a day or two (in some cases even one half of one day can suffice) to reach board and management consensus on the bank's future strategy, why it is the right strategy and how it will be accomplished. Summer is the ideal time to start thinking about what the strategic planning meeting agenda topics should look like to make the meeting a success. So you might start by considering the following questions in developing your meeting agenda:
  1. Has the bank's financial performance over the past several years been as expected/projected and how has it compared to peers?
  2. Have individual products/business lines performed as expected?
  3. What impact have the people who are responsible had on that performance and what changes, if any, do we need to make as a result?
  4. What is the outlook over the foreseeable future in terms of the banking, regulatory and economic environments, human resource and IT capabilities (and opportunities), products/business lines?
  5. What changes should be considered in terms of people, technology, products, services and delivery channels?
  6. Are there other strategic options and scenarios that management and the board should consider?
  7. What are the potential franchise value implications?

To have a fruitful planning meeting that results in a well thought out and cohesive strategy for coming years, getting the right topics on the agenda to address what is most important for your particular bank is critical. Also critical is that management and the board have discussion materials to frame the discussion and a facilitator who understands banking, to keep the discussion on track and help management and the board reach consensus. So as you head to the mountains, head to the beach or wherever you are going this summer, take your smartphone or notepad so that if you find yourself pondering bank strategy while you have some downtime, you can start formulating your strategic planning meeting agenda and have a head start when you return. And if you want some input, give me a call at 703.647.6553.

Marcus Faust
Managing Director
(703) 647-6553
William Pommerening
Managing Director
(703) 647-6546
Ronald Riggins
Managing Director
(703) 647-6543
Gregory Dunn
(703) 647-6548
James Hennessey
(703) 647-6544
James Oren
(703) 647-6549

With over 25 years of experience gained by working with more than 1,200 banking companies, RP Financial has become a trusted source for advisory, planning and valuation services. Our expertise and clear vision lead to precise and deliberate action that adds value for our clients. 


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