In talking about Norwest Corp.'s service-oriented and community-oriented mission, president Richard N. Kovacevich emphasizes local boards.

"We seek local advice and counsel to help us meet the financial and human needs of each community," he has written in a company handbook.

"Our vision is viable only if we can identify and act upon real concerns in real communities. Community board members are critical to the success of this approach."

Members are "community leaders, talented professionals, and motivators of others" who lend their unique perspectives to bank management, Mr. Kovacevich wrote. They "share the vision of being the best."

As one of the biggest super community banks, with $48 billion in assets and banking subsidiaries in more than a dozen states, Norwest could find it hard to stay close to local roots. This is where the community boards come in.

A Crucial Factor

Mr. Kovacevich looks at the boards as the communication channet that facilitates understanding their markets' needs.

Community board members are essential to super community banks of any size, but especially to one like Norwest. The company's management recognizes it, and hence gives special attention to selecting the best available candidates. Norwest's community banking group is designed to allow each subsidiary bank to meet its community goals while serving the customer in the best possible way. Ken Murray, the head of community banking for Norwest, says:

"Our mission is to provide the personal service of a community bank with the extensive product and service resources of Norwest Corp. - the best of both worlds."

That is a concise recitation of super community theory.

Membership Criteria

Community board members are selected on the basis of expertise and business and community service, reputation as community leaders, talent as professionals and motivators of others, and ability to lend unique perspective to other board members and the management of the bank.

The members' role is to provide the president with an outside, objective source of expertise. They should counsel and support the bank in achieving business and community goals.

They are also expected to take an active interest in the performance of their banks, and to take the responsibility in seeking out information that is necessary to fulfill this role.

Each Norwest president is responsible for selecting his bank' community board and keeping its members informed about significant policy changes, management decisions, local market developments, and new business strategies.

Other Responsibilities

The community board members are expected to contribute to the bank's community marketing initiatives to assure that Norwest is meeting the banking needs of its entire community.

The board will annually review the Community Reinvestment Act statement and other aspects of community relations.

Among the community boards' other responsibilities are:

* To review their bank's statements of condition, income statements, and other financial performance reports on a periodic basis.

* To monitor, and advise the bank president on, the competitiveness and effectiveness of Norwest products and services.

* To assist in business development activity by identifying new customers and services and by suggesting changes in existing services that would enhance the bank's market position. .

Through this set of responsibilities, Norwest puts meat on the bones of the advisory board membership and makes the board a true contributor to bank management and local focus, even without the legal ties of full board membership.

Like BB&T Financial Corp. in North Carolina [see my column of May 12], Norwest successfully motivates hundreds of "partners" in community relations and customer development by making them integral parts of the management team.

It is the commitment that makes the difference, not the legal status of the directors. In fact, the advisory status confers all the advantages of a fullfledged board without the downside of legal liability.

Norwest provides suggested guidelines that include frequency of meetings, terms of office, stock ownership, business commitments, an annual performance review, and retirement and conflict-of-interest policies.

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