Independent Banker - June 2019 - 47

one woman, on the board? " he asks.
Craig Scheef, chairman and CEO of $480 million-asset
Texas Security Bank in Dallas, recognizes the importance
of gender and ethnic diversity, and he is also considering
how diversity of age might benefi t the community bank's
board. " Having a younger person's perspective could be
very valuable, " he adds.
Johnson would also welcome " a millennial director who
represents the upcoming generations. " In general, though,
he emphasizes the importance of diversity of opinion, no
matter the source. " I think I have a very diverse board that
generates a lot of questions and discussions, " he says. " It's
challenging at times, but I like to be challenged, and I think
it makes us better as an organization. "
Making a change
If an assessment fi nds that new skills are needed
in the boardroom, community banks can pursue a number
of avenues.
One option that Choice Bank chose is to grandfather
in existing board members and then expand the board,
looking for new directors who possess desired skills.
Weinstock notes that implementing new policies, such
as term or age limits, can also boost attrition, spurring a
change in board composition.
Often, however, says Weinstock, an alternative approach
is the more interpersonally challenging one. He suggests
" dealing with the people on the board who are not
performing well and moving them or replacing them with
talent that the bank hopes would perform better. "
Scheef acknowledges that he isn't an expert on having
the type of tough conversation that Weinstock advocates.
" But I do feel like I need to be able to do it, " he adds. Scheef
once had to explain to a board member-a retired airplane
pilot with " good judgment and people skills " -why he was
replacing him with a large shareholder with signifi cant
accounting and chief fi nancial offi cer experience.
Ideally, these conversations, Scheef says, should be
" well-scripted, short and surgical, and they have to be
respectful. The backdrop is a deep appreciation for the
contribution the person has made and for the best interests
of the organization over the long term. " He continues, " It's
always diffi cult to have conversations when you've found
someone better, but you have to be able to have those
adult conversations. "
Johnson is no stranger to diffi cult conversations. A
few years ago, one of Choice Bank's directors ran for
Designing a board
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less robust board selection process served
Texas Security Bank in Dallas well from its
beginnings as a de novo in May 2008 until quite
recently, when it hit the $480 million-asset mark.
" In the past, we weren't as strategic or
deliberate [about finding new directors] as
we want to be now, " acknowledges CEO Craig
Scheef. He notes that his bank's 10-person
board meets monthly, and three of the original
directors still serve today.
" We're at an inflection point with the bank, "
he explains. " We realize we have a good bank, a
good board and good raw materials. Now we're
thinking: 'Let's really be more strategic about
our board composition based on where we as an
organization want to get to.' "
As a starting point, Scheef has embarked on
creating a board skills matrix. Typically, a board
skills matrix is a graph or table that sets forth the
competencies of each individual director and
how those competencies contribute to critical
functions of the board and the bank.
Scheef is convinced that a board skills matrix
will help Texas Security Bank view
its board composition more
strategically, and yet he
does not foresee any
major upheavals ahead.
" I don't see us
needing to have tough
conversations, " Scheef
concludes, " but if we
need to do that, we
will. "
A
Craig Scheef
independentbanker.org Q 47
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Independent Banker - June 2019

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