BRENTWOOD, TENN., Oct. 6, 2020 – Bank Director, the leading information resource for directors and officers of financial institutions nationwide, today released its 2020 Governance Best Practices Survey, sponsored by Bryan Cave Leighton Paisner. The survey identifies two key challenges facing bank boards today: staying abreast of changes that are occurring throughout the banking industry (69%), and cybersecurity and similar emerging issues (69%).
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The Best Practices For Corporate Governance In The Banking Industry
“The purpose of the survey is to build clarity around a set of best practices for corporate governance in the banking industry and provide directors a sense of how boards at other banks go about their business,” says Jack Milligan, editor at large at Bank Director. “A strong board — and strong governance practices — form the foundation for a high performing bank, and contribute to a safe and sound banking industry.”
The 2020 Governance Best Practices Survey fosters a broader understanding of corporate governance policies and opinions throughout the banking industry. Interviews by thought leaders and board chairs were conducted to provide additional insight.
“Bryan Cave is pleased to sponsor Bank Director’s first annual Governance Best Practices Survey. In my governance work with boards of directors over the years I’ve found that the most effective tool can be a reference to what other well-run companies are doing,” says James J. McAlpin, a partner at Bryan Cave Leighton Paisner and leader of the firm’s banking practice group. “Best practices are important in every industry, but of particular importance in the banking industry. I believe the information in this year’s survey results will be very helpful to bank boards across the U.S.”
It should be noted the survey was conducted just before banks had to shift operations to comply with stay-at-home orders and keep their customers and employees safe, and the accompanying wave of mass adoption of digital technology reported by banks large and small.
In addition to publishing the full survey results, Bank Director also produced a report that further explores the findings, which is divided into five modules: process, independence, oversight, composition and refreshment.
Key Findings From The 2020 Governance Best Practices Survey
Key findings include:
Pushback on Diversity
Forty percent of respondents believe the performance benefits from greater race, gender or ethnic diversity is overrated, and 8% say it doesn’t improve the board’s performance at all. Fewer than 40% say their board features several directors who fit that definition of diversity.
Oversight
Sixty-one percent say most directors are actively engaged; however, 36% say only some are. The majority — 87% — say they’re confident that management shares all relevant information with the board in a proactive manner.
Board Refreshment
Twenty percent say their board doesn’t have a process in place to create space for new backgrounds and expertise on the board.
Underperformance
Forty-three percent indicate that at least one or two directors are underperforming and should be replaced.
The survey includes the views of more than 150 independent directors, chairs and CEOs of U.S. banks below $50 billion in assets. Full survey results, as well as a detailed analysis of the findings, are now available online at BankDirector.com.
About Bank Director
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. For more information, please visit BankDirector.com.
About Bryan Cave Leighton Paisner
With 1,400 lawyers in 32 offices across North America, Europe, the Middle East and Asia. For more information about Bryan Cave Leighton Paisner, visit www.bryancave.com.
