at the last minute added a seminar titled "Redefining the role of bank directors." He's glad he did. "We had more interest in that area than anything else we did, by about a 2-to-1 margin," said Jim Barton, vice president of Performance Solutions of Kennesaw, Ga. "We scheduled the session just once for the day, almost as an afterthought, but if we could do it again we'd schedule it at least three times." The demand for bank director education - coming from management, bank regulators, and the directors themselves - has skyrocketed in the past few years. And the effort to meet that demand has spawned a booming cottage industry of consultants and service providers that shows no signs of abating. The number of such consultants, some of whom focus solely on bank director issues, has increased perhaps fivefold in about three years, according to the American Association of Bank Directors, itself formed in 1989 to cope with the director liability questions stemming from that period. The business is hot at the moment, because directors of small banks are coping with a host of questions for which their backgrounds provide few answers - namely how to stay ahead of a rapidly changing industry. "The focus for directors today is on determining what you want your bank to be and how to go about getting there," said Peter K. Gwaltney, vice president of the Louisiana Bankers Association, which just ran a seminar for more than 100 bank directors. "Small banks today have to make big changes, and this has to start from the top, meaning the board." These answers come in part from the more than 50 programs and providers listed in the bank director association's quarterly newsletter. Just three years ago it was only four pages long, with just a handful of consultants. Today, the association receives about four calls a week from bank director educators who want to be added to the publication, which now has 45 pages. "As consolidation continues, there will be a decline in the total number of directors out there," said David H. Baris, executive director of the association, whose membership nevertheless is 1,000 and growing. "We haven't seen any diminishing aspects so far because I think there's a growing recognition by many boards that there is a need for supplemental sources of information." A vast majority of boards still have had no director education - probably more than 75% of them, some estimated. This means there's a large market of mostly eager students in the industry. With banks willing to pay a consultant $3,000 or more for a one-day, in-house session, it's not hard to understand why the industry is mushrooming. T.K. Kerstetter exemplifies the new breed of consultants. He's the managing director of the Bank Director Training Center in Wilmington, Del., which he cofounded three years ago. Gross revenue has grown to well over $1 million, compared with its first-year gross of around $60,000, he estimated. "Even though there is an influx of things happening in this area, it's still in the early growth stage," said Mr. Kerstetter, a former community bank chief executive and the author of a book titled "The Ten Commandments for Bank Directors: The Official Guide That Regulators Won't Publish." Five years ago bank directors were most concerned with liability issues and oversight responsibilities. Those concerns have been replaced with understanding technology and searching out new markets for their banks, observers said. Though the banking industry has seldom been healthier, bank directors are justifiably worried about the future of the industry and their banks' role in it, observers said. The frenzied merger market has only enhanced those uncertainties. "I think there are two reasons for the growth - opportunity and fear," said Mr. Barton. "With the consolidation occurring, small banks have to step into the vacuum, and that requires them to change the way they're doing business. They have to be more aggressive, and that starts with the directors."

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