Over the last 25 years, Paula Phillippe has been on a lot of boards ranging from food shelves to theater, engineering to securities. When it comes to corporate boards, she gravitates toward community banks, though.
The boards she chooses to sit on “have to fit a passion for me because, if you’re on a board where you don’t really understand the industry or don’t have a passion for the service, it feels more perfunctory,” Phillippe said. “When you have the passion, it becomes something really fun.”
She’s brought her passion to bear for the $783 million Highland Bank of St. Michael, Minn., for which she’s being honored as a 2024 “Amazing Outside Director” by BankBeat magazine.
“I like financial services as an industry,” she said. “I really think that there is a place for good financial services firms to serve people for myriad reasons. Good financial services definitely have a place in helping people realize their dreams.”
She also takes a close look at the integrity of the leadership, whether the organization has a good culture, and whether the bank’s business model makes sense. “How does the model drive success, and do they have the right pieces in place?” she asked. “I like organizations that are constantly evolving and trying to be better and do new things.”
When Highland CEO and Chair Rick Wall approached Phillippe about joining its board, she had also been offered a directorship at another community bank. “I chose Highland; I liked the culture, ownership, view and steady success Highland had demonstrated over time,” she said. “I really appreciate [Rick’s] leadership, so that made it easy to make the choice.”
Wall was acting on a friend’s suggestion when he first tagged Phillippe but quickly learned the value of her skills. “Her background was perfect for what we needed,” he said. Phillippe has worked in human resources her entire career, mainly at financial service and health care companies.
Two key experiences that set Phillippe up for success at Highland were working for the Pohlad-owned Marquette Financial Companies and serving on the board of what was KleinBank (now part of Indiana’s Old National Bank).
Many of the Pohlad companies were specialty finance businesses like equipment leasing, factoring, asset-based loans, and asset management, and Phillippe worked with all of them. This gave her the opportunity to see the “interaction of good leaders who really understand their market” and can grow that market while building a strong client base and making solid loans, she said.
Her time on the audit committee at KleinBank helped her know what questions to ask “to make sure the bank is growing in the right way, taking the right risks, and being safe at the same time.”
These experiences showed Phillippe that privately-held companies were her favorite kind to work with because “they have a different mindset” than publicly-held companies which have constant earnings pressures, she said. Privately-held companies “have a long-term view [of value] that owners take in their businesses.”
When Phillippe joined Highland’s board, the bank had no one at a senior level who had experience in HR; they had outsourced that function. “Paula brought insights and skills for that,” Wall said. “Paula also had a lot of board experience. We’re a smaller, private company, and we’re continuing to professionalize our whole governance structure — her communication on it is helpful for all board members.”
Phillippe strives to ensure the smooth operation of the board by thinking strategically, providing oversight and appropriately challenging management — all while not micromanaging. “When boards do it right, there’s a lot of value to the organization,” she said. “When they don’t do it right, it can really be a problem.”
Wall praised Phillippe’s ability to distinguish between the governance and managerial elements of board issues. “She’s not confrontational, but she’s clearly willing to be persistent and share her insight,” he said.
Being “clear about connecting goals and strategies to outcomes and rewards,” is another way Phillippe strives to bring value, she said.
“It’s good to see how the long-term strategy of Highland Bank is really set with parameters of the holding company and their goals for their long-term future,” she said. “That linkage is so important. I think that’s been done really well at Highland.”
Phillippe also continues to hone her skills and knowledge by being part of the Minnesota Women’s Economic Roundtable. “I’ve always enjoyed it,” she said. “I find it a great place to continue my own learning and be thoughtful about what’s going on in the current environment.”
She also feels she learns a lot from her colleagues in the boardroom. “Rick has put together a strong board, so there are lots of good perspectives around the table,” she said. Other directors bring experience with entrepreneurs and capital needs, IT consulting, family office investment, and commercial real estate development.
Phillippe is right at home in that mix, according to Wall. “Her insights from previous experiences have helped us,” he said. “It’s worked out really well.”