A bank’s success is dependent upon its people and nonqualified plans can be used as both a recruiting and retention tool for that talent. An often overlooked issue is “What will the bank do if it unexpectedly looses its top talent?”. Succession planning is crucial to ensuring the continued success of a bank.
A board’s primary responsibility is setting the direction of a bank through the CEO they hire and manage. In turn the CEO is responsible for a bank’s direction with the selection and management of the remaining key roles and positions in a bank.
A bank that does not have a succession plan in place is putting shareholders at risk.
Manage Leadership Risk
- Where will the next C-Level executive come from?
- Who will replace them if they become disabled, prematurely pass away or leave unexpectedly?
- How will current employees handle the change?
- Should the bank hire an Executive search firm?
- What types of benefits are required for second tier key management?
- What if your bank has a great opportunity to grow through mergers and acquisitions?
Competing for Talent Risk
Banks Struggle not only to find the “right” experienced candidate but once found must compete with other banks who are looking for the same talent.
Regulatory Scrutiny Risk
Regulators are looking for serious succession plans that are in writing, especially for CEOs.
Begin with the end in mind…developing a succession plan that addresses these risks and needs both now and in the future is key to the continued success of the bank.