SUCCES AT TH There is no more vital decision for a bank and its board of directors than who leads the organization. Yet leadership succession remains a growing challenge, as banks too often lack sufficient executive depth or proper succession planning. Having conducted over 100 CEO succession search and assessment assignments, we have clearly seen that superior talent really does make a difference, especially for banks intending to remain long‑term survivors. From these accumulated client experiences, we have identified Six Key Lessons Learned from CEO Transitions. LESSON #1: SUCCESSION REALLY DOES MATTER! It is imperative that boards exercise their fiduciary and governance responsibilities and grapple with the challenges of leadership succession. The continuity of leadership promotes continuity of strategy, and both regulators and governance activists are more focused than ever on succession. There is also a growing body of information which affirms that a lack of planned orderly succession can have a significant impact on the value or survival of the company. LESSON #2: THE ELEPHANT IN THE ROOM CANNOT BE IGNORED Where is the elephant in your boardroom? Who is the stumbling block to planning for the bank’s future leadership? Is it the CEO who refuses to accept that he/she will not live forever, or are there directors who do not want to raise this issue with their friend, the CEO? The board has a responsibility to tackle succession no matter how awkward it may be, so start these conversations early and have them often. LESSON #3: THE SUCCESSION PROCESS IS AS IMPORTANT AS THE OUTCOME A robust, thoughtful and thorough succession process adds huge credibility to the board and the bank, regardless of whether your successor comes from within or outside of the bank. Take the time up front to ensure the alignment of your organization’s strategic plan with the ideal profile of your next CEO — which will likely look different than the predecessor’s. LESSON #4: YOU REALLY CAN DO IT! DEVELOP YOUR OWN METHODOLOGY AND TIMELINE Each succession situation and timeline are different, so there is no definitive template to follow. That being said, begin your efforts no less than 30-36 months before you anticipate a potential transition of leadership. It is also very helpful to formally anoint a Succession Committee of the Board (note: this is different from a search committee) to take ownership of this process and manage the many critical elements along the path. This makes the succession effort more manageable and provides for accountability. Lessons Learned From CEO Transitions By Alan J. Kaplan, Founder & CEO, Kaplan & Associates Inc. 12 The CommunityBanker
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