By Stephen A. Enna, John Parry & Alexander

Recently I was asked to comment on the criteria that I feel is important to consider when selecting a Board Chairman. The more I thought about it, the more I have come to believe that the same characteristics are applicable to board committee chairs and others in board leadership positions. I based a portion of my comments on work completed by Federal Express when considering those for leadership positions. Here is what I feel is important. For those of you in leadership positions, you may want to rate yourself and see how you do.

Good Leadership Characteristics

Charisma

• Instills faith, respect and trust
• Has a special gift of seeing what others need to consider
• Conveys a strong sense of mission

Individual Considerations

• Coaches, advises and teaches people who need it
• Actively listens and gives indications of listening
• Gives newcomers a lot of help

Intellectual Stimulation

• Gets others to use reasoning and evidence, rather than unsupported opinion
• Enables others to think about old problems in new ways
• Communicates in a way that forces others to rethink ideas that they have never questioned before

Courage

• Willing to stand up for ideas, even if they are unpopular
• Does not give in to pressure or to other’s opinions in order to avoid confrontation
• Will do what’s right for the company and for employees, even if it causes personal hardship

Dependability

• Follows through and keeps commitments
• Takes responsibility for actions and accepts responsibility for mistakes
• Works well independently of the boss

Flexibility

• Functions effectively in changing environments
• When a lot of issues hit at once, handles more than one problem at a time
• Changes course when the situation warrants it

Integrity

• Does what is morally and ethically right
• Does not abuse management privileges
• Is a consistent role model

Judgment

• Reaches sound and objective evaluations of alternative courses of action through logical, analysis and comparison
• Puts facts together rationally and realistically
• Uses past experience and information to bring perspective to present decisions

Respect for Others

• Honors and does not belittle the opinion or work of other people, regardless of their status or position

Competency Levels
In addition to the qualities of good leadership, the Board Directors must be fully competent in the following areas:

Intelligence

• Ability to perform highly complex mental work (e.g. abstract reasoning)
• Has the cognitive competency to effectively deal with highly complex problems
• Is very bright, a quick thinker, and unusually curious

Consistent Exceptional Performance

• Ability to perform the job in an excellent manner at all times, consistently producing desired results and outcomes
• Is results oriented and has a proven track records of achieving results
• Can “multi-task” with ease

Interpersonal Relations

• Ability to work exceptionally well with others
• Establishes strong collaborative relationships and is sought out by others (including peers, managers and subordinates)
• Is highly sensitive to the needs of others and this caring spirit is evident
• Supports others when appropriate and encourages others to excel
• Is generally viewed as a leader in the office as well as externally

Problem Solving

• Highly adept at identifying causes of problems, securing relevant information and developing appropriate courses of action
• Highly adept at gaining approval for chosen course of action and independently executes plan

Ability to Adapt to Change

• Highly developed ability to adapt to organizational or environmental change, and does so without panic or anxiety
• Willingly learns from mistakes and takes appropriate corrective action so that others are willing to imitate approach
• Understands the need to be flexible, while maintaining objective in mind

Banking Knowledge
While banking knowledge is not essential to be a Bank Director, it can be most helpful.  The following are areas where prior knowledge can be very beneficial:

• Loans, including Internal Loan Review Procedures
• Investments
• Asset-Liability/Funds Management
• Profit Planning and Budget
• Capital Planning
• Internal Controls
• Compliance Activities
• Audit Program
• Capital Outlays and Adequacy
• Investments
• Problem Loans, their Present Status and Workout Programs
• Allowance for Possible Loan Loss
• Concentrations of Credit
• Funding Activities and the Management of Interest Rate Risk

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