Don’t Forget About These 3 Succession Planning Areas

Ask yourself this question: Am I sure about who may take over the business when our current CEO retires? If you answered yes, you’re in a fairly good position right now. If you answered no, you need to read Bank Director’s article on succession planning and the three critical areas you shouldn’t forget about. According to the article, the three main areas are management, board and ownership succession.

Management Succession: This area of succession planning involves your senior level executives including the CEO, CFO, CMO and other executives. While retirement is a more evident reason to create a succession plan, you can’t predict unforeseen life events. Make sure to identify at least 5 potential candidates and how you’re going to retain those candidates.

Board Succession: It’s also important to create a succession plan for your board of directors. The board is a critical component of your bank as these men and women help guide the future of your bank. In order to make sure the future of your bank is in good hands, your succession plan should include a persona that explains the type of candidate needed for each role.

Ownership Succession: Since it’s very common for owners to not share their succession plan with the board or management team, the article recommends “utilizing nonqualified benefit plans to keep the management team in place during ownership succession of the bank”.

Out of the three areas of succession planning, where does your bank struggle the most and why?