Before Bill responds to Hi’s offer to join Insights Bank and Trust, he has an opportunity to meet with Wilford ("Will") Simms, the director Bill would replace. View the video to see what director Simms has to offer Bill.

Reflections on the Video

Bill’s conversation with director Simms the day after meeting with Hi was enlightening. It turns out that Will, a successful bank director, had many of the same misgivings Bill has. In fact, he found that being a director was daunting and he was ready to resign from the board until he decided to ask questions, no matter how embarrassingly simple they seemed to others. That way, he could clear away jargon and fully understand proposals (their upsides and downsides) on which he would vote. He was determined to do a good job for the bank and its stakeholders.

As it turns out, Hi and the other members of senior management were more than happy to explain matters in a way someone new to banking would understand. The bottom line is that clarifying or probing questions are one of the most powerful management tools that bank directors have. Use them to understand the issues and to determine the pros and cons of proposals brought to you.

As you listened to the conversation between Hi and Bill in the opening clip, did you form a clearer view of why Hi asked Bill to join the board? Is it because of his business acumen and leadership in the community? Or, does Hi want someone who’s more interested in the prestige and perks associated with being a bank director, giving management a free hand to run the bank as it sees fit with little input or interference by board members? What’s your view?

Concluding Thoughts

Hi certainly pays lip service to the strengths that Bill brings to the bank’s board. However, Hi’s remark about the board not having to do much work because “senior management runs the bank” makes you wonder just how much oversight the board actually exercises. On the flip side, director Simms complimented the bank’s senior management team for answering his questions and obtaining training for him. The implication is that senior management supports, at least to some degree, active participation by the board. Besides, director Simms doesn’t appear to be a shrinking violet. It is likely that he would have resigned long ago if the board did not play a meaningful role at the bank. Thus, it appears that the expertise Bill would bring to the board is paramount in Hi’s mind in extending the invitation to become a director.