The Board's Role in Refocusing Bahrain Development Bank
In March 2016, Bahrain Development Bank's existing board term came to an end and Khalid Al Rumaihi was appointed the new chairman. Determining a need for change, he immediately overhauled the board and replaced the Bank's long-standing CEO. The new board quickly concluded that the Bank needed to refocus on its core business of lending to small and medium-sized enterprises (SMEs) and selected an experienced Bahraini corporate banker to implement this strategy. However, within six months, the new CEO resigned and the board had to once again look for a replacement. Expanding their search globally, they found Sanjeev Paul, a Singaporean with immense experience in SME lending, who was appointed CEO of BDB in May 2018. Over the next 20 months, with the board's support, Paul headed an organization-wide revamp aimed at enabling the bank to refocus and achieve its mandate of supporting SMEs. By December 2019, the changes started to pay off; after three years of losses, BDB turned its first profit. However, Paul and the board recognized their work was far from over. The Bank's cost structure was higher than that of competition, they paid below-market salaries, and had an outdated core banking system. As Al Rumaihi looked ahead to his second term as chair, he wondered how the board could help Paul and his management team in addressing these challenges.