Management Studies, Board Assessments and Compensation Studies
The effectiveness of a bank’s board and management is increasingly important to being able to establish and maintain both a safe and sound operation but also a competitively significant institution. Compensation practices are increasingly a major focus of regulators and have found to be a cause of bank failures in recent years. Bank Strategies LLC is very experienced in management and board evaluations as well as assessing compensation approaches.
Banker--February 8, 2011
Reassessing Management Assessments
"Our work with financial institutions reflects a broad divergence of practice in how boards evaluate management. Most often, the review is limited principally to the chief executive and arises in the context of a compensation assessment of whether annual performance targets were achieved. Today's management evaluations too often do not sufficiently assess whether:
- There are clear lines of authority among the management ranks.
- Policies, job descriptions and training provide effective guidance to staff.
- Key risk management activities are properly governed.
- Sound human resources practices are followed.
- Management and board reporting conveys clearly the information necessary for effective oversight.
"Similarly, the persistent focus on annual financial results often crowds out careful consideration of whether managers possess not only the technical skills necessary to perform their responsibilities effectively, but the executive competencies most often associated with success: leadership, driving results (including risk management), talent development, strategic thinking, and relationship building."
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Mail: 75 S. Joyce Street, Golden, CO 80401