Richard K. Davis, chairman, president and CEO, U.S. Bancorp, began his career as a bank teller at age 18. After 35 years in banking, he knows the industry well. He compared the banking industry to the game of basketball in his keynote address at the Corporate Directors Forum, held at USD last week, “Directors Forum 2013: Directors, Management and Shareholders in Dialogue.”
Richard pointed out that, in basketball, the team plays both offense and defense, shifting continuously between the two. This is unlike football that brings on different players for offense and defense, and even has “special teams” for transition plays. Similarly, the banking industry has to be both a safe place for people to keep their money and a place that takes enough risk to help people realize their dreams when they come to the bank for help.
Further, in banking and the game of basketball: both have rules – these are changing for banks; both have a venue – for banks it’s the economy; both have fans – the banks’ fans are confused about the role and reputation of banks; both have referees – the regulators are increasingly aggressive with banks; and both have owners that are seeking success – for banks they’re the shareholders; but, the banking industry’s sphere of accountability is changing rapidly, putting it in a position of responsibility to a much larger audience.
To continue the basketball analogy, Richard cautioned against celebrating defense (regulation) at the cost of offense (risk-taking). Asking banks to be risk-free is to take away their important role of providing help for people to pursue their dreams. He pointed out that in the last few years, media coverage about the banking industry has not been nuanced in a way that allows for good news about the banks that are staying the course and fulfilling their traditional role of being both safe and risk-taking.
Richard talked about leadership and the kind of guidance that the directors attending the Forum provide their organizations. He quoted Duke basketball coach, Mike Krzyzewski, “Coach K,” on leadership: “Whatever a leader does now sets up what he or she does later – there’s always a ‘later.’” Richard told the group that this Directors Forum, by focusing on governance, helps these leaders to “set up a better future.”