People always tell you of the unintended consequences of intentional actions. When the board of Congressional Bank, a $450-million asset institution in Bethesda, Maryland, decided to conduct its first board self-assessment last year, we had no idea what it would produce. We composed and conducted the self-review without outside help. It brought immeasurable returns.
The board of directors of Congressional Bank has been in place for 10 years. We have most of the founding members still sitting at the table, and about one third of our 15 members have joined in the last five years. The bank had come through the recession with a strong balance sheet, yet we knew that the near–term horizon of the community banking industry will bring great uncertainty and change. We decided to take the opportunity to reflect on how we could better support management in this next stage for Congressional Bank.
The board development committee launched a self-assessment process involving individual interviews with each of our board members. We were eager to know the strengths and weaknesses of the board as perceived by each board member, with interviews scheduled at a time when we were not rushed to accomplish any other bank business. The results of the reviews would be presented to the full board, although names of those commenting would be kept private.
Immediately, a valuable part of this process became evident. Members of the board development committee wanted to interview members they didn’t know well. As one member of the committee said, “I don’t ever interact with so-and-so. He is not on any committees with me, our paths don’t cross in the community and I feel I just don’t know him. This will be a great opportunity to learn more about him.” Another committee member said, “I would like to interview the women of the board. I am very interested in gaining what may be unique perspectives.” A third member of the committee made his request, “I am most interested in whether newer members of the board feel they are listened to and believe their opinions are respected as well as more-tenured members.” Members chose their interviewees based on their interests and the relationships they wanted to grow.
We built the board self-assessment around some traditional questions related to our board member roles, committee work and meeting agendas, such as:
- Are we staying at the strategic level as good board members should, or is there room for improvement here?
- Do we have the right board members for the future? If not, what areas of expertise, and characteristics/qualities do we need to add to the board with our next nomination of a new member?
- We have not reviewed our own compensation for many years. Is our current compensation matched well with our purpose as a board, or does it need to be adjusted?
The board self-assessment also included some questions often used in other industries to uncover strengths and areas for improvement, such as,
- What should we keep doing?
- What should we start doing or do more of?
- What we should stop doing or do less of?
These last three questions provided much more thoughtful responses, more enthusiastic ideas and more individual reflection than the other, more traditional questions. Several board members reviewed their own contributions to the board and declared their interest in additional or different committee assignments. Members expressed eagerness for even more knowledge and training about our bank, our industry and related regulatory matters.
Interviewees expressed their desire to ensure we were always aligned and focused in our time and energy with management on the matters that were of the highest priority for the bank’s success.
So was it worth it? We tweaked our board agendas, are reviewing our board compensation and have added more banking knowledge/training opportunities for our board members. Yes, I would say it was worth it.
But the full value of this self-assessment was generated in the unique process we used. The individual board member interviews, conducted by colleagues who serve on the board development committee, generated the real return. We conducted hours of one-on-one interviews exploring what each individual thought was important for the full board going forward, and the power of their own individual contributions for the best future of the bank. We grew more meaningful relationships and deepened our appreciation for each other. Yes again—I would say it was well worth it.