The environment for financial institutions in 2026 is more complex than ever. Many boards seek to increase their performance as fiduciary agents of their organizations. A significant challenge is that boards typically meet only once a month, and many members have external professional commitments that compete for their time and capacity. Achieving a high-performing board requires a mutual commitment and great strides in areas like clarity, engagement, and strategic focus—the three most frequent detractors from high performance. Furthermore, surveys consistently show that strategic focus and board composition are the components of board governance that score the lowest, often leading to leadership stagnation and hampering the board–CEO relationship.
This article outlines eight critical detractors and addresses tangible actions boards can take early in 2026 to significantly increase their organization's potential success and value to its constituents.
- Clarity on roles and responsibilities: Board members need to clarify the division between the governance of the board and the responsibility of management. The board's most effective use is not to micromanage operations, yet some boards are too hands-off, which can lead to a leadership vacuum. There is a fine balance between strategic focus and operational execution.
- Lack of intrinsic commitment: Board members who are recruited based upon personal connections or community prestige may not have the expertise, the capacity to serve, or the willingness to put in the time and effort. A high-performing board member needs to commit, on average, at least 150 hours annually to add strategic and governance value to the organization.
- Required skills and expertise to be high performing: Community advocacy is often the number one skill sought in a new board member, yet equal attention must be paid to other areas of expertise such as finance, AI, technology, executive-level leadership, higher-level human-centric skills, and strategic and critical thinking.
- Operationally focused board agendas: When agendas lead with operational topics, strategic discussions often come to the forefront when board members are already tired and disengaged. When board members read the packet ahead of time and prepare their questions in advance, executive team members do not need to repeat the information in the board packet in lengthy presentations. Conversely, this allows for critical perspectives within the board packets to be discussed and debated.
- Lack of effective onboarding: Too often, the onboarding of new board members is limited to a tour of operations, a brief overview of the balance sheet and investment portfolio, and a review of lending policies. Rarely is the strategic vision and plan shared, nor is the evolving responsibility of the board member clearly defined, along with accountability for their role.
- Strategic planning is a list of projects rather than generative strategic scenarios: Board members with an operationally focused professional background are comfortable with reviewing a list of projects. Conversely, board members with executive and line-authority expertise gravitate toward a higher-level strategic and critical thinking dialogue that frames the future using the organization's core competencies and strategic opportunities.
- Entrenched mindset: Resistance to change is a prevailing culture where board members are comfortable with the status quo, resisting a mindset to explore and adapt to new ways of thinking, new technologies, evolving community needs, and modern governance best practices.
- Ineffective succession planning: A lack of clarity when selecting and onboarding new board members leads to the prevailing mindset that joining the board might be a lifetime appointment. Conversely, recruited board members should understand that their skills will be needed for a certain strategic direction and that, at some point, they should make room for new skills and expertise as the organization continues to evolve. Industry data suggests that serving six to nine years is an adequate timeframe to onboard, add strategic value, and contribute meaningfully to the highest performing modern governance practices.
A major step toward relevant board governance
What can a board do to self-reflect on its value and contribution to the organization?
One of the most effective steps a board can take is to dedicate time for its own strategic planning. This process involves reflecting on and evaluating their contributions, exploring possibilities for increased value, and committing to new practices that result in a measurable and observable shift in governance, mindset, dialogue, decision-making, and accountability. Specifically, boards should conduct self-assessments, board-wide assessments, and board alignment assessments. Reviewing this information from an appreciative perspective will help leverage current commitments, composition, expertise, and mindset to evolve into a higher-level thinking-in-action governance body.
Look ahead and find a day for the board to do its own work. Schedule this day before the executive team presents their strategic plan and it's guaranteed that the strategic planning event will be more meaningful, relevant, and opportunistic.
