MADISON – Ken Thompson, president and CEO of Capitol Bank, has been elected to serve as the 2021–2022 board chair of the Wisconsin Bankers Association (WBA).

The Wisconsin Bankers Association is the state’s largest financial industry trade association, representing more than 200 commercial banks and savings institutions, their branches, and over 21,000 employees.

“Ken brings decades of banking experience and a wealth of knowledge to the WBA Board,” said Rose Oswald Poels, WBA president and CEO. “He will do an excellent job of leading our Board and industry forward in the post-pandemic economy.”

Thompson has been in the Madison banking industry for over 35 years, joining Capitol Bank in 1996. He has extensive experience in all areas of lending. Thompson was named president in 2003 and serves on the bank’s board of directors. Thompson holds a bachelor’s degree in business from UW-Stevens Point and earned his MBA from UW-Madison in 1997. He completed the Graduate School of Banking in Madison in 2004 and is a graduate of Leadership Greater Madison #2. Community involvement is greatly valued by Thompson, displayed by years of working with a variety of local nonprofits including American Family Children’s Hospital, Agrace Hospice Care (treasurer), Catholic Charities, and the Breakfast Optimist Club of Madison. Thompson also serves on the boards for Hy Cite Enterprises and Extreme Engineering. Thompson enjoys spending time with his wife and two children, especially outdoors. His pastimes include golf, racquetball, and hunting.

Also serving as officers on the WBA Board are: Chair-Elect Dan Peterson, president and CEO of The Stephenson National Bank & Trust, Marinette; Vice Chair Donna Hoppenjan, president and CEO of Mound City Bank, Platteville; and Past Chair Paul Kohler, president and CEO of Charter Bank, Eau Claire.

Joining the board for three-year terms are Greg Ogren, president of Security Bank, Iron River; Jay Mack, president and CEO of Town Bank, N.A., Hartland; and Dan Ravenscroft, president and CEO of Royal Bank, Elroy.

Those continuing their terms on the board are: Al Araque, SVP, director of consumer and private banking, Johnson Financial Group, Racine; Jim Chatterton, president and CEO, National Exchange Bank & Trust, Fond du Lac; Mark Erickson, regional president, MidWestOne Bank, Osceola; Timothy Kotnour, president and CEO, State Bank Financial, La Crosse; Paul Northway, president and CEO, American National Bank – Fox Cities, Appleton; Joe Peikert, president and CEO, Wolf River Community Bank, Hortonville; Jenny Provancher, president and CEO, The Equitable Bank, S.S.B., Wauwatosa; Terry Rosengarten, president and COO, Unity Bank, Augusta; and Mark Wierman, president and chief lending officer, Ixonia Bank.


About the Wisconsin Bankers Association
Founded in 1892, WBA is the state’s largest financial industry trade association, representing more than 200 commercial banks and savings institutions, their branches, and over 21,000 employees. The Association represents banks of all sizes in Wisconsin, and nearly 98 percent of banks in the state are WBA members.

By, Cassie Krause

Joe Fazio was looking for an organization that connects companies with potential board of director candidates a year ago when he learned about the Private Directors Association. He noticed the association had chapters in a variety of places around the U.S., but not in Wisconsin. So he asked why. 

“They said nobody has volunteered to do that yet,” said Fazio, who is chairman and chief executive officer of West Bend-based Commerce State Bank. 

Next thing he knew, Fazio was president of the Wisconsin Chapter, which launched in June of 2020 and has been growing ever since. In its first year it has attracted 159 members and six sponsors. So far, two banks doing business in Wisconsin are sponsors of the state chapter of PDA – Old National Bank and Town Bank. Inge Plautz, of Old National, is the vice president of the state chapter. 

“It’s gone really well, and there’s a significant interest in it,” Fazio said. 

Chicago-based PDA, founded in 2014 with 20 people, now has about 2,000 members nationwide and 18 chapters. Fazio called it the “go-to source” for private directors and boards. 

In addition to helping to connect diverse director candidates with companies seeking them, PDA offers educational resources for companies with boards. It also holds social gatherings, which, during the pandemic, have been mostly online. 

For example, this month (May) the Wisconsin chapter is hosting a  virtual wine tasting event featuring products from the Grgich Hills Estate Winery of Napa Valley, Calif. 

There are a couple of reasons PDA should appeal to banks, Fazio said. 

“We’re all required to have boards. So how do you get outside your circle of influence, and particularly, when you try to diversify your board,” Fazio said. “How do I go find that person?” 

Most bank boards in Wisconsin consist mainly of white males, he said. PDA can help introduce females and people of color who are fully qualified to serve on bank boards. 

“There are very talented diverse candidates who are very capable of being on boards of directors,” Fazio said. “And it drives me nuts when people say, ‘Yeah, I just can’t find a good diverse candidate.’” 

A second reason PDA could help banks is because banks serve businesses, he said. PDA could link a bank’s business customers with director candidates. 

“We want businesses to do well. So do they have a board, or do they need to set up a board?” Fazio said. “Particularly, like ESOP companies, they have to have a board of directors. So again, where do we find good directors?’” 

PDA resources also help potential directors prepare for the position and to stand out among candidates. 

“For instance, there is training on how to write to resume for a board seat, because it’s different from a traditional resume. Or how to interview for a board position. It’s different from a traditional interview. So that’s really valuable,” Fazio said. 

He said there are two main elements to PDA. 

“It’s really board education, and helping build a board, start a board, make it more efficient and effective,” Fazio said. “And then the other is to help the individual become more competitive and then connect those dots for those opportunities.” 

Fazio said he expects the Wisconsin chapter of PDA to have six to nine events each year. 

“Some will be webinars, and some in person,” he said. 

The cost to join is $350 a year.  

“As a member of the Wisconsin chapter, you really have access to all the events, all the people, all the expertise throughout the country in all the chapters,” Fazio said. 

A full list of PDA’s services can be found on its website

Paul Gores is a journalist who covered business news for the Milwaukee Journal Sentinel for 20 years. Have a story idea? Contact him at

By, Alex Paniagua

With technology taking an increasingly important role in banking, directors of community banks need to be up to speed on the responsibilities this trend brings. 

From mobile banking to online loan applications to digital account opening, technology is crucial to financial institutions, said Patrick Neuman, a partner with the law firm Boardman Clark. He cited this as a reason directors should be tuned into their bank’s technology and cybersecurity. 

“Digital platforms create enormous opportunity, but they also require strategic planning and robust risk management practices, and that really starts at the board level,” said Neuman, who focuses on banking for Boardman Clark. “The board really does need to be informed. There are a number of different risks they need to be thinking about and a number of different kinds of strategies they need to be thinking about as their bank is expanding its digital platform to stay competitive in the marketplace.” 

Neuman and Boardman Clark colleague Cat Wiese plan to cover those issues in their presentation during the WBA Directors Summit, a virtual live event from 9 a.m. to 12 p.m. CDT on May 19. Wiese said she plans to talk about compliance concerns that come along with technology. 

In the Summit, directors of community banks will hear from experts on topics such as choosing technology vendors and getting ready for the future instant payment system. They’ll also be urged to take a close look at their assets and prepare for the rebooting economy. 

Patrick Dix, vice president of strategic alliances for the financial services and technology firm SHAZAM Inc., will talk with Summit attendees about the current and coming payments landscape. Part of the focus will be on the Federal Reserve’s desire for safe, ubiquitous, and faster payments capabilities in the U.S. and what’s happening on that front. 

“We’re going to touch on what’s coming next, which is faster payments,” Dix said. “This is a topic that’s been talked about for the last two or three years in real general ways, but I think things are getting real now.” 

It’s time for community banks to start thinking about and discussing how to help create a system in which they’ll participate for many years to come, he said. Dix said it amounts to “a reimagining of the payments system as we know it.” 

“We want to pose some questions so they can start thinking about that,” he said. 

How might that issue affect bank directors? 

“In many community banks, the directors are involved in decisions like, ‘Do we change our core?’  And that’s a big decision, certainly, but it also will have impact on these kinds of future technology,” Dix said. “How will your core play with other fintech companies? Will they be interoperable with other players in the industry?” 

Dix added: “I always say to people, ‘If your biggest tech partner can’t hook up to other systems, how good of a tech partner are they? If they won’t hook up to other tech partners, how good of a partner are they?’ Those are real important questions for community banks.” 

While technology will be in the limelight at the Summit, one presenter, Marc Gall, vice president and asset/liability strategist at BOK Financial, plans to look at some other topics of key concern to bankers:  interest rates, liquidity, and earnings. 

“Right now, most banks are swamped with liquidity and not really sure what to do with it,” Gall said. 

On the other hand, there is concern as the economy improves, inflation is going to take off, and rates are going to rise. 

“Balancing that weight of a very low earning asset on your book — being cash — with the potential risk that’s out there for rising rates leads banks to be a little bit more perplexed right now as to what to do,” Gall said. 

He said banks need to assess what’s on their balance sheet and, as pandemic relief measures like Paycheck Protection Program loans go away, get back to the nuts and bolts of banking. 

Gall added that some think the Fed is going to raise interest rates faster than what it has indicated and inflation will soar. He’s not convinced this is the case and said there may be risk to banks sitting on piles of cash. Some banks feel like if they do that, it’s conservative and they’re not taking a risk, he said. 

“But we would say doing nothing is a risk in and of itself,” Gall said. 

The Directors Summit is recommended for bank management teams, beginning or experienced inside and outside directors, bank CEOs, executive officers, and bank general counsel. 


By, Alex Paniagua

Does your CRM process set you up for success?

Providing credit is a fundamental component of the banking business model, but as banks (and the financial services industry as whole) have become more complex it can be tempting to let the act of lending diverge from the credit standards that guide the institution. When that happens, the bank's credit culture can cause financial and reputational risk. "Banking is a unique animal," said Tom Siska, Associate at Plante Moran. "The greatest source of a bank's income is also the greatest source of risk: the lending portfolio." So how can banks avoid falling into bad habits as credit quality rises? "It starts with the board making credit quality a top priority," said John Behringer, CPA, Partner at RSM US LLC. Credit loss, and particularly systemic credit loss across multiple loan segments, is a critical risk for every lending institution, so the board must be confident in its ability to oversee the loan portfolio. "Credit risk management, also called loan portfolio management, is the first line of defense between success and failure in managing the number one risk for a bank," said Michael Wear, an instructor at WBA's Commercial Lending School and also a faculty member and Loan Portfolio Management Section Leader at the Graduate School of Banking – Wisconsin. Boards and management can ensure their policy and monitoring processes are sound by first recognizing their level of risk, finding the balance between detail and summary for the board, and then assessing their operations. 

Recognize Risk

Effective director oversight of the credit function requires the board to have a comprehensive understanding of the risks present in their institution's market(s) and of their comfort level with that level of risk. This has become an area of concern for regulators, as well. In the winter issue of its Supervisory Insights publication, the FDIC highlighted credit risk trends in CRE, ag, and oil and gas lending, and reiterated the importance of maintaining strong risk management processes.* The OCC, meanwhile, addressed similar issues in the Spring 2016 issue of its Semiannual Risk Perspective publication, which allocated significant focus to elevated CRE and operational risks, in particular. "Anytime you have a concentration you need to be aware, as a director, of what percentage of your loan portfolio is in that particular concentration and what the overall impact will be if something happens in the economy," Siska advised.

In addition to their focus on concentrations, regulators have also begun to watch competitive pricing closely. "Appropriate pricing of risk is the principal business of any bank," said Siska. "The regulatory bodies are starting to get concerned with competition for interest rates, so they're watching that very carefully. Banks, for the most part, have been very careful to grant loans on a sound and collectible basis coming out of the recession," he continued. "Any slippage we see is usually due to competition." 

Of course, the economy is also a major factor in assessing credit risk at a particular institution. "We've had good times these past few years, but that's when bad loans are made," said Wear. He recommends recognizing and monitoring potential systemic risk causes, augmented with scenario-based stress testing on larger credits and loan loss reserve adequacy in aggregate. "You have to think outside of the box when coming up with the absolute worst-case scenarios and how they might impact you," he explained. Bank boards are made up of business and community leaders, and management should leverage that expertise. "Boards know their marketplace—along with its intrinsic risks—better than any computer program or risk model," said Wear. Forecasting and stress testing the portfolio for a more difficult economy is essential to prepare the bank for potential issues. "We're closer to the next recession than we are to the last one," Behringer said, noting that we're currently in one of the longest economic expansions in U.S. history. "The more you spring clean now, the better prepared you'll be for the next downturn."

Balance Perspective and Detail

In addition to a full understanding of the risks in the loan portfolio, bank directors also need the right balance of detailed loan reporting and summarizations that provide a wide perspective. According to Behringer, the degree of board engagement depends on the bank; for example, an institution with a concentration in high-risk loans—such as CRE—requires more detailed monitoring. "The board should spend time designing their dashboard with management to identify and measure loan portfolio risk indicators," Behringer recommended, adding that the board must then review that dashboard each month. 

Effective monitoring requires watching for trends, both within the bank's loan portfolio and externally in the local economy. "Directors really need to have their finger on the pulse of the loan portfolio," said Siska, recommending a period review of peer data as it relates to asset quality. "Every bank has a unique economy," he explained. "A small town bank in northern Wisconsin is not in the same economy as a large bank in the heart of downtown Chicago, so that's why peer comparison is important." That peer data is a reliable source for the board to provide perspective on sector trends, for example. Internally, loan exceptions are one piece of data the board should watch carefully. "Policy exceptions are a great way for the board to track how well employee behavior aligns with the bank's risk tolerance," Wear explained.

However, the board also needs to be able to drill down into individual loans, at times. A certain level of detail is required when assessing exceptions to the loan policy, for example. So how can you tell when board reports are in the "sweet spot"? "Successful early identification of weakening conditions of borrowers—before they hit traditional problem delinquency or problem loan reports—is a good litmus test that you have the balance between detail and perspective right," said Wear. 

Compare Policy and Operations 

The best way for the board to fulfill sound credit oversight is to perform a periodic, comprehensive assessment of the bank's loan operations to ensure that all policies and procedures match staff practices. "Whoever the institution is, the process is the same," said Siska. 

1.    Define your Risk Appetite
Since the bank's comfort with different levels of risk depend greatly on the bank's strategic goals, Wear says it's critical for the board to first identify the mission and goals of the institution. "This is the guiding light for everyone in the bank and is usually consistent through good and bad economic times," he said. Doing so will help the board to clearly articulate the risk appetite of the bank, which impacts both the written policy and the operational procedures it prescribes. "It's the board's job to define the risk appetite of the bank, and the riskiest asset most banks hold are their loans," said Behringer. 

2.    Compare Policy and Portfolio
Next, review the loan policy and the bank's current portfolio; compare the two and identify gaps where they indicate different comfort levels with risk. Examine areas of concentration and loan exceptions, in particular. "Look at the loan policy no less than annually and assess if it still aligns with the risk appetite of the bank," Behringer advised. "Especially look at exception reporting and concentration reporting relative to capital and the overall portfolio."

3.    Monitor Behavior: Loan Documentation
Many credit risk reviews stop there, but it is essential that the board also know whether the operational practices of bank employees align with the philosophy set out in the credit policy and visible in the loan portfolio. "When we see errors, it tends not be to in the design of the controls but the operating effectiveness," said Behringer. "The breakdown that leads to the greatest risk is when we approve a structure for a borrower in a certain way, but that doesn't carry through to the loan documentation or the monitoring process." A full analysis requires that the bank's loan documentation procedures are clear and in writing. "Make sure it's detailed, complete and consistent from loan to loan," Siska advised. "The process should be one the bank is comfortable with and also gives them all the information they need about each borrower. Anyone should be able to open the file and find what they need." 

4.    Monitor Behavior: Loan Administration
A thorough credit risk review must follow the process from "cradle to grave," so after reviewing loan documentation practices, the next step is to review the bank's loan administration practices. "Credit administration is the mortar in between the bricks of a solid credit culture," Wear explained. "It has to be consistent." The bank's loan administration practices provide for an "early warning system," Behringer explained, allowing the bank to intervene before a customer goes into default. "The sooner you can identify an issue, the sooner the bank can work with the borrower, which is a hallmark of a community bank," he said. Loan administration can be a positive customer touchpoint when done well, according to Wear. "Past due loan renewals are a customer service failure," he asserted. 

5.    Identify your Tools
Finally, identify the tools your institution will use to conduct this review on a timely, consistent basis. Some banks will find complex software tools the most applicable to their situations, while others can succeed with Excel spreadsheets. It all depends on the complexity of the bank and its portfolio. Whichever tools you use, however, remember that they are not a panacea. "Sometimes banks tend to view software products as the solution when really they're just a tool," Behringer cautioned. "You can have the best technology in the world but your procedures and your people need to be effective as well in order for the process to work." 

In addition, a loan grading system can be helpful for the board, according to Siska. "They should have a loan grading system in place as part of their policy, and the directors should know how to interpret it," he said. Another option is to categorize all loans, which helps identify concentrations. "I'm a big fan of categorizing the portfolio," said Wear, suggesting banks use the North American Industry Classification System (NAICS) on both commercial and consumer loans. "Even for consumer loans, we should know where your concentrated sources of repayment originate, such as how many customers have the same employer or industry," he said. "For investment CRE loans, tenant industry concentrations can be combined with data from commercial and consumer portfolios to provide an overall picture of industry or sector exposure," Wear added.

Credit risk management is one of the bank board's most fundamental duties, and developing a careful process to guide that oversight benefits the bank, its shareholders and employees, and the community as a whole. "Directors are responsible for ensuring that overall, lending is done responsibly with a concern for the soundness of the bank, shareholder returns, and meeting the credit needs of the community," Siska explained. "Scrutiny of the process is important."

Plante Moran is a WBA Silver Associate Member.
RSM, US LLC is a WBA Bronze Associate Member.

By, Amber Seitz

The banking industry is undergoing a prolonged period of tremendous change. In fact, many experts say that constant change is the new normal. As the guiding hand and governing body, bank boards must also adapt and adjust their focus in order to lead their institutions to success in today's volatile environment, all without losing sight of their primary responsibilities. Read on for a look at how directors and boards have changed in recent years, and for perspective on what your bank's board may need to transform into in the near future. 

Who's Sitting Around the Table?

Twenty or 30 years ago, the banking industry was much more straightforward than it is today, and was reasonably stable as well. That placed fewer demands on directors, in general. "As long as the board members were representative of the bank's market and were helpful in generating new business and making lending decisions they contributed to the success of the bank," said Cass Bettinger, president, Cass Bettinger and Associates. Often chosen for their community status or ongoing business with the bank, directors on historical bank boards often mirrored the bank's product mix, which facilitated their role as brand ambassadors, according to Julia Johnson, senior manager, Wipfli LLP. "However, those historical boards may not have had a thorough understanding of banking, and how banks serve as an intermediary of cash," she explained. "They put a lot of faith, confidence and trust in senior management to prudently manage the bank and ensure regulatory compliance." 

Walk into a bank boardroom in 1985 and you'd find a collection of businessmen, lawyers, accountants and community leaders, individuals with backgrounds in either business or finance. New directors were often selected based on their commercial relationship with the bank, their connections to the local business community, or because they (or their family) owned a large share of the bank's stock. According to Philip K. Smith, president, Gerrish McCreary Smith Consultants and Attorneys, the director role used to be viewed as a passive one with little impact on the overall success of the institution. "Historically the makeup of the board of a successful bank was identical to the makeup of the boards of unsuccessful banks," he said. "The focus of those kinds of boards was loan approval, dividend payments and general oversight." 

Walk into that same boardroom today, and you'll still find a collection of businessmen, lawyers, accountants and community leaders, but they may look very different. As with historical boards, today's directors are individuals with business acumen, and may also be representatives of large shareholders. "A good business background is helpful, and those people often end up leading discussions and have significant input," said John Knight, partner, Boardman & Clark llp. However, today's economic and regulatory environment has forced a move toward selecting directors to fill in gaps in expertise on the board, rather than business community or shareholder representation. "That has promoted much more diversity in the board in terms of gender, race, age and ethnicity," explained Smith. "Those go out the window when the question is 'what does the bank need?' rather than 'who should sit on the board?'." According to Knight, the composition of bank boards is transitioning slowly, especially at community banks. "It's quite different between community banks and regional or national banks," he said. "If I see a change, it's modest and gradual. This is not abrupt." Still, Johnson says not only is increased diversity necessary to bring in expertise, but it will also have an overall positive impact on the institution. "When you look at what needs to shift in terms of the composition of the board, we need to have more diversity on the board," she said. "While backgrounds may remain consistent, the diversity of individual experiences and perspectives contribute to the strength of the board by creating a rich and robust platform for discussion. Specifically, there will be greater representation of women and individuals of different ages on the board." 

Same Board, Shifted Focus

While the individuals sitting around the table and their backgrounds are not much different, the expectations placed on them and their approach to their role has shifted dramatically. "Traditionally, the board has looked to the CEO to be the primary strategist for the organization and that their role was simply to look at the strategic plan and approve it," Bettinger explained. "The biggest single change in responsibilities for board directors is that they now must be responsible for being actively engaged in the strategic planning process and understanding what it means." According to Knight, the law regarding directors' responsibilities has not changed appreciably, but the application of it has broadened as expectations from regulators rise. "In general terms, their fiduciary duties haven't really changed," he said. "But the regulators in particular expect more of directors." Those expectations mean directors can no longer be passive sources of commercial loan contacts. "In the past, directors could serve in a more passive capacity," Johnson said. "Today, the regulatory environment doesn't allow for that." 

Just as regulatory expectations for bank directors have transformed their role, so have market and economic influences. "Banks now have to be constantly reassessing their business model and changing it," said Bettinger. "The bank needs directors who have certain skillsets that will help the bank succeed in a changing marketplace." The ideal combination of skillsets will vary by institution, depending on the bank's strategic goals. "The board needs to know who the bank is and who they want to be in the future," Smith explained. "You identify new members by understanding the kind of bank you're trying to become and then reaching out to those people." For example, if the strategic plan forecasts growth through M&A activity, the board should have at least a couple directors with experience in that arena. That's why Johnson advocates not filling the board to capacity at all times. "I like to see banks that don't keep their board at full capacity, but leave a couple seats vacant as permitted by the bank's bylaws," she said. "This gives the bank flexibility to bring in new board members who have a particular expertise and/or enables the bank to create an overlap between a new director and an experienced director who may be stepping off the board." That provides the board with crucial responsiveness if a critical unmet need is identified.

With this shift away from more ceremonial boards to knowledge-based, strategic, active boards, the recruitment and training of board members is transforming as well. "It's a requirement that the board not micromanage but be much more active than historical boards," said Smith. "That changes the dynamic, even as you're recruiting people." Smith says the board must also take an active role in its own succession planning. "Directors must help recruit new board members," he said. "The board should consider itself a body independent of management and therefore participate in recruitment." The process for identifying potential successors should be familiar to the board, because it's the same one they use within the bank. "Look at the strategic plan and then do a board composition analysis, on the basis of knowledge, skills and abilities, and identify where you have gaps," said Johnson. "It's the same thing you do at the bank level. The key is to be intentional and proactive." Active recruitment also requires directors to understand and articulate why serving on the board is valuable. "In today's world, if you want somebody who's really good to come on your board, you need to have a winning value proposition for them," Bettinger explained. "You want them to feel that going on your board will be a great thing for them to do for the community and their business." 

Training: Not Just for New Directors
Offering regular education and training opportunities is one of the best ways bank executives can equip their directors (and therefore their bank) for success. After all, most directors will not have built-in understanding of the banking industry, and that is an important component of their fiduciary duty. Board education and training is a highly diverse process that varies greatly from board to board. The key is that it should not be a one-and-done onboarding session. "All board members of all banks ought to have some type of minimum requirement for continuing education every year," Smith advised. Bettinger recommends specifying the education and development each individual director needs and incorporating it into a written plan. This not only provides specific training for each board member, it's more efficient, too. "You don't want to spend money to send your entire board off to training that only a quarter of them need," Bettinger explained. "It's much more cost-effective to be individualized in your director education by identifying what specific education that each director needs that's most important." Another approach, specific to the onboarding process, is to provide one-to-one guidance. "You might even assign a mentor for a period of time," Johnson suggested. "Partner a new director with a seasoned director who can respond to questions."

Looking Forward

So, what will you see walking into a bank boardroom in 2030? "I'm already seeing more independent directors with specific expertise and experience that are relevant to the development and execution of strategy," said Bettinger. "A prime example is the crucial role that digital technologies increasingly play in developing, promoting and reinforcing winning customer value propositions; measuring and managing relationship profitability and loyalty; efficiency enhancement; and more effectively managing all categories of risk." With signs indicating that mergers and acquisitions will continue to rise, Johnson predicts the resulting larger banks will have boards focused on those unique challenges. "On the one hand, I think bank boards will need to be more savvy and more skilled in merger and acquisition activity," she said. "On the other side, as the asset size of the banks grows and regulatory pressures increase, they'll need to be increasingly more sophisticated in terms of the banking industry and the applicability of those regulations to their financial institution in order to mitigate risk and liability, to ensure safety and soundness." Increased regulatory pressure will be met with increasing pressure from technological changes, as well. "It's my opinion that it will result in more board turnover because directors will need to constantly stay on top of new threats that didn't exist before," Smith said. "The industry is changing so rapidly it will require a more engaged, nimble board with a much younger average age that is able to monitor technology." Just as we've seen over the past two decades, as the industry becomes more complex, the board will shoulder more responsibility to be informed. "The complexity of banking is much greater now than it's ever been," said Knight. "That requires more well-informed, better educated directors, just to deal with the complexity of it.

By, Amber Seitz

Personalized Strategic Plans
To manage board and shareholder expectations, design a strategy that fits the unique composition of your institution

Balance sheets are healthier than they've been since pre-recession years, yet earnings remain stubbornly elusive for most financial institutions. In some cases, the challenge of achieving high-performance in a banking landscape that features persistently low rates, extreme regulatory burden, and intense competition on multiple fronts creates friction in the board room. If bank management, directors and shareholders don't share expectations for the bank's performance, time and energy will be wasted on efforts that don't drive the institution toward that unified goal. The bank's strategic plan is more important than ever as it serves as the bedrock and written understanding of that shared vision and the steps to achieve it. In order to maintain buy-in with the strategic plan over the course of its three- to five-year life, the plan must reflect the unique perspectives and priorities of the bank's shareholders, directors and management.

Start with a Shared Strategy

The best – and perhaps only – way to keep management, directors and shareholders on the same page as the institution moves into the future is for all three stakeholders to start with the same goals, risk tolerance and vision for the bank. The strategic plan can be a powerful tool in clearly defining those elements, especially when all parties do not have the exact same vision. "You don't need 100 percent agreement, but you do need 100 percent buy-in," said Thom Back, senior manager at Wipfli. Ken Johnson, principal of Ken Johnson Consulting, recommends all bank directors participate in an anonymous questionnaire prior to the strategic planning process; not only does this demonstrate how the board as a whole feels about the bank's current situation, but it also allows for discussion of any items where there is a large discrepancy. "It's helpful to have everyone grounded to what others' perspectives are," Johnson explained. "That starts you off in the same place and helps you set realistic goals."

In drafting the specifics of the strategic plan, management must balance the board's performance goals with the institution's clearly defined risk tolerance. "You have to ensure that there's a balance between growth desires, capital levels, and dividend targets and understand which of those goals is the highest priority," said David Koch, president/CEO of Farin & Associates. On a more granular level, Cass Bettinger, president of Cass Bettinger and Associates, explained that strategic planning should involve the board setting a target return on equity range and capital ratio based on the bank's risk management strategy, which then enables management to calculate what the bank's target return on assets must be. It is essential for management to have a crystal clear understanding of the board's risk tolerance in order to successfully balance that equation. "If the board and management work together on that basis, at the end of the day you'll have a strategic plan that is very clear about what it's designed to produce for shareholders and what all the objectives and strategies are," Bettinger said. 

Ultimately, both the goals and risk tolerance of the bank are guided by the directors' shared understanding of the institution's mission, which should be defined with input from directors, management and shareholders. "Good strategic plans are about a lot more than just the numbers," said Elliot Berman, principal of Bowtie Advisors. "There needs to be a strategic planning process, not just a budgeting process," Berman continued. "The board should get involved at the front end of that process. At the outset, they need to provide a high-level sense of direction for management, and at the end need to approve the plan."

Understand Your Key Stakeholder Groups

While each bank has a unique composition of key stakeholders, most have three main groups: directors, executive management and shareholders. All three contribute different perspectives and skillsets to the creation of the bank's mission and the strategic plan built on that mission. Directors connect shareholder interests with management's tactics by guiding the institution at a high level. "It requires business acumen and understanding to lead the organization toward a vision that will improve the financial performance of the bank," Johnson explained. The board's role is also to use their business acumen and leadership abilities to represent the shareholder's interests. "The board's responsibility to shareholders for strategic planning is the single most important responsibility the board has," Bettinger pointed out. Paying attention to increasing shareholder value can help mitigate investor dissatisfaction with the bank's performance as well as provide management with actionable guidance. "Management gets the most out of the board when they spend 70 percent of the time looking forward," said Berman. 

Management's role is to convert the board's vision for the institution with the specific tactics bank staff will need in order to accomplish that mission, as well as to ensure that the board is properly equipped to guide the bank. "Understand the strengths, skills and relationships that each director brings to the table," said Koch. "Strengths-based management is key to a successful, engaged board." The CEO needs to be the driver in aligning the expectations of directors and shareholders to the bank's performance. "The strategic planning process has to engage the board and management, working together to fulfill the mission of the bank," said Bettinger. The best way to accomplish that, according to Johnson, is for the CEO to ensure that the bank's strategic planning process includes the right people and the right information. "It's not easy, but the CEO is the one who is charged with organizing it," he said. 

Part of ensuring the right people are included is cultivating a thorough understanding of the bank's shareholder base. "The board and management need to have an understanding of what their shareholder base is looking for, because that will influence the strategic plan," said Mark Koehl, CPA, partner at Wipfli. "Knowing the shareholder group is key to helping the bank's plan be successful." It's unwise to generalize with shareholders, and each bank will have a unique mix of investors depending on its size and ownership structure. However, there are a few categories of shareholder that many banks share: 1) mature shareholders who may be nearing retirement, and therefore are looking for dividend growth and liquidity, but also community involvement; 2) second- or third-generation shareholders, who may no longer be based in the community and therefore are primarily interested in earnings per share growth and return on equity; 3) mid-life investors who may feel disillusioned with community banking due to current political and economic headwinds, and therefore wish to maximize the bank's sale price and look for a partner. 

In addition, from each of these groups (or others that exist at your institution), sometimes activist investors arise. Between 2012 and 2014, only 8 percent of SEC filings showing at least 5 percent ownership and "activist intent" came from financial institutions. However, in 2015, that jumped to more than 17 percent. "Activist investors see the value of the bank differently than the board and management," Back said. "It doesn't translate to 'wrong,' they just have a different vision for the bank." The best way to prevent this dissonance is through consistent and clear communication between all stakeholder groups. "Activist investors make noise either because they see a financial opportunity being missed or because they care about the bank but feel like they aren't being heard," Koch explained. "Shareholders need to feel that the strategic plan reflects their needs and their input and their priorities, and the only way to do that is to engage them in the process," Bettinger agreed.

Keeping In Step

Communication and transparent monitoring are the two essential drumbeats that management should use to keep all stakeholders in step for the duration of the strategic plan. "Transparency is a very key aspect," said Back. "Not transmitting exactly what your intentions are can sometimes paint you into a corner worse than laying out the plan. It also maintains trust, which is critical." Koch also said transparency on the key goals and objectives of the plan should be a top priority. "Senior management's role comes down to consistent positive messaging with the board and staff," he said. "There's no magic there, just understanding the audience and being honest, and if the message isn't positive speak to what can be done to turn things around." Another part of management's role in open stakeholder communication is to solicit input from large shareholders on a consistent basis, especially as it pertains to the strategic plan. "CEOs and directors aren't performing their job properly if shareholders are not involved in the strategic planning process," said Johnson. This doesn't need to occur monthly, or even quarterly, but the lines of communication should never be closed. "You're not necessarily seeking out input from shareholders who aren't on the board on a frequent basis, but you have to always be open to answering questions," said Koehl. 

While responding to shareholder questions and expectations for bank performance is a complicated interaction that involves a lot of different factors, not just the strategic plan, Berman suggests using the strategic plan as a framework when communicating with shareholders. "You don't have to get into details, but use the plan and what you're doing with it as the outline," he advised. The most important feature of stakeholder communication, especially to shareholders, is the effort you put into it. "If you focus on your communication with your shareholders in the same way you focus on communication with major customers or prospective customers, you'll see results," said Berman. 

The other vital aspect of transparency is how stakeholders monitor the bank's progress in accordance with the strategic plan. This requires clear communication timing, specific numerical goals and metrics for measurement. "It's really important that management and the board discuss the timeframe," said Bettinger. "For community banks in particular, it's not about short-term profits but long-term value." Specific numerical goals can help avoid rewarding a focus on short-term gains by providing specific long-term targets. "Once you define the mission or vision, the CFO needs to put it down on paper as a pro forma balance sheet and income statement. Then you know what's supposed to be happening," Johnson advised. "While the numbers are not the plan, there do need to be specific, measurable goals," Back agreed. 

Measuring the institution's performance against those goals requires metrics and testing, because no institution will ever be in total alignment with their strategic plan at all times. "Every plan is wrong in some way," said Koch. "If it's not, your plan either isn't specific enough or you're very lucky." One popular way to quantify the alignment between the plan and performance is found by examining the key assumptions that may not be right via stress testing. "It's not about sticking one number out there as your plan. It's also about knowing the three or four most important factors in getting there," Koch explained. "In the risk management process we tend to focus mainly on what might go wrong, but it is only useful to the extent that it helps you identify what needs to go right in order for you to hit your goals." Those benchmarks and milestones are crucial signs on the roadmap of your strategic plan, so all stakeholders should be able to identify them. 

Clear communication of the bank's strategic objectives and how to track them is also how the bank leadership determines when it's time to reassess the strategic plan as a whole. "The strategic planning process isn't an annual event," said Bettinger. "It's ongoing. You always have new opportunities and new threats emerging." As those new opportunities and threats arise, it is inevitable that the strategic plan will adapt accordingly. With the joint efforts of shareholders, directors and bank management, the bank will also rise to meet them.

By, Amber Seitz


Boards have the ultimate responsibility for the security of customer information, as well as the responsibility to approve financial investments into cybersecurity, create accountability in the institution for security operations, and set clear expectations for management. A positive culture needs to be established for the organization to be successful in addressing cybersecurity needs. For an organization’s culture to be positive, it must start with the Board.

Important decisions are made at each board meeting that affect strategic objectives, products and service offerings, and ultimately information security. Poorly informed or misinformed decision makers could influence security negatively and cause unintended damage to an institution. Understanding the basics of an Information Security Program is critical for the board to make effective discussions. This session will discuss how to improve communication and reporting with the board, basic processes and components of the ISP relevant to the board create, and how to improve cybersecurity culture.

Covered Topics

Information security program basics
Trends in cybersecurity
Improving board information flow
Cybersecurity culture
Roles and responsibilities

Target Audience
Both board members and information security professional will benefit from this session. Board and Senior Executives will receive a basic review of Cybersecurity and a strong Information Security Program, plus questions to ask of management. Members of the management team will benefit from a better understanding of what the board needs to know, how to communicate it, and tips in creating a strong culture.

This program qualifies for the following CPE Credits through the SBS Institute: 1.5 CPEs*: CBSM, CBSE, CBCM ISC2*: Estimated 1.5 hrs. CISSP. ISACA*: Estimated 1.5 hrs. CISA/CISM/CRISC. *Self-Reporting


Shane Daniel, SBS CyberSecurity, LLC

Registration Option

Live presentation $275

Recording available through Mar. 3, 2022


The board secretary’s role goes far beyond being the “note taker” at board meetings. The job often entails being the chief organizer, ensuring compliance requirements are met, understanding governance issues, planning meetings, developing reports, and preserving corporate records.

This session will provide the information and tools needed to be a successful board secretary. It will review responsibilities and provide best practices to enhance administration of corporate governance, including establishing an agenda, delivering the board package, scribing contemporaneous meeting notes, and documenting the details in the official minutes. In addition, this webinar will provide guidance and tips for becoming more effective and efficient, provide tools to facilitate success, and detail best practices for documenting “healthy debate” and discussion that occurs during a board meeting.

Attendance certificate provided to self-report CE credits.


Understand the board secretary’s role and responsibilities
Document board oversight of your institution’s risk management program
Prepare effective agendas and board package materials
Track items for board review
Write thorough board meeting minutes
Appropriately correct prior minutes
Explain the benefits and compliance considerations of electronic board package delivery and virtual meeting platforms


Sample board agendas
Sample board reporting schedule
Sample board attendance log
Sample policy approval schedule
Employee training log
Interactive quiz

This informative session is designed for board secretaries, corporate secretaries, senior management, and administrative personnel.

ABOUT THE PRESENTER – Dawn Kincaid, Brode Consulting Services, Inc.


Live Webinar – $245
Recorded Webinar and Digital Download – $245 plus tax
Live Webinar, Recorded Webinar and Digital Download – $320 plus tax

Directors have overall responsibility for your institution’s BSA program, including approving the program itself, funding its budget, appointing a BSA officer, and instilling a culture of compliance. Senior management is then responsible for taking those directives and ensuring they are practiced throughout the institution.

It is imperative that directors and senior management understand the potential threats posed by money launderers and terrorist financers – and the institution’s role in preventing bad actors from accessing the US and worldwide financial system. Without a thorough understanding of how financial institutions can be used to funnel illicit proceeds, hide funds, and promote illegal activity, they cannot make informed decisions about the funding and resources necessary to meet BSA compliance requirements. Those types of failures often result in substantial penalties to institutions and individuals. This vital training will provide an overview of recent cases and enforcement actions, BSA program requirements, examiner expectations, and recent advisories and guidance regarding the ever-changing fraud and money laundering schemes.


Know your institution’s BSA and OFAC responsibilities and the importance of actively supporting efforts to fulfill them
Understand the mandatory reporting requirements for CTRs, SARs, and OFAC screening in order to provide appropriate resources and support
Define money laundering, identity theft, synthetic identity fraud, and more
Explain why BSA and OFAC compliance is critical to protect the US and worldwide financial systems from money laundering, terrorist financing, and proliferation of organized criminal activity
Distinguish between lower-risk and higher-risk products, services, and accountholders and understand the need for appropriate risk-based controls


Glossary of important BSA and OFAC terms
High-level executive summary of key BSA and OFAC components
Employee training log
Interactive quiz

This informative session is designed for senior management and directors who want a succinct overview of the Bank Secrecy Act and implementing regulations to effectively oversee and provide support for the institution’s written programs.

ABOUT THE PRESENTER – Mary-Lou Heighes, Compliance Plus, Inc.


Involved with financial institutions since 1989, Mary-Lou has over 25 years’ compliance experience. Before starting Compliance Plus in 2000, she spent five years working as a loan officer, marketer, and collector. She also worked at a state trade association for seven years providing compliance assistance and advising on state and federal legislative issues that affect financial institutions.


Live Webinar – $245
Recorded Webinar and Digital Download – $245 plus tax