Are bank boards becoming savvier?
In 2007, the life of a bank board member was less stressful. That was before Lehman Brothers Holdings filed for bankruptcy, before the full impact of the financial crisis was felt by the nation’s banks and almost three years before the Dodd-Frank Act was passed. By contrast, Bank Director’s 2012 Compensation Survey found bank boards “Overworked, Underpaid and Unappreciated.”
However, directors may be breathing a little easier or at least have adjusted to their enhanced responsibilities, according to our findings in the 2017 Compensation Survey, sponsored by Compensation Advisors, a member of Meyer-Chatfield Group. This white paper looks at the evolving trends both in composition and compensation that have occurred over the past ten years.
Today, most directors—73 percent—believe that their compensation is competitive enough to attract new board members. Just seven percent of the independent directors and chairmen responding to this year’s survey cite additional income as the greatest reward for board service—meaning that attracting top talent to the board doesn’t boil down to money. “Compensation is not a primary driver in choosing to serve on a board,” says Flynt Gallagher, president of Compensation Advisors. “You’ll never pay them for the actual value of the time spent.”
As the oversight responsibilities of bank boards expand, fueled not just by the regulatory environment but also an evolving marketplace, the composition of bank boards are gradually shifting to meet these new demands. Sixty percent of survey respondents say their board has a plan in place to identify prospective directors, and 51 percent say their board will actively seek to become more diverse in the next two years.
But will today’s banks be able to find and attract the board members needed to take the organization into the future?
For more on these considerations, read the white paper.
To view the full results to the survey, click here.