Succession can easily make or break your independent community bank. Jeff Gerrish, in an article for Banking Exchange, presents key issues that the board and CEO must confront when dealing with this issue.
Make a plan in advance – To remain independent in today’s consolidating environment, it is key that you have a clear plan in place for CEO succession. The board and the CEO should define a strategy in advance, not just expect something to fall into place naturally.
Start the transition early – Adequate notice of a CEO’s retirement is at least 24 months. Banks that have groomed a successor internally will likely have a smoother transition than those that must seek an outside candidate.
Have well-defined CEO qualifications – The following are all important areas of consideration:
- Does the CEO candidate have similar experience running a similar-sized or larger community bank?
- Is the candidate capable of having good board relations?
- Will the candidate be able to provide adequate leadership for the organization?
- Does the candidate demonstrate business development potential?
- Should the CEO also be chairman?
Aim for the ideal – The better prepared you are, the less likely you are to be thrown off by unanticipated obstacles. Let the knowledge that bumps in the road of succession will inevitably arise motivate you to plan thoroughly.
For more details, read the article in full at Banking Exchange.