Independent Banker - December 2021 - 56

Community bank leaders know their people are their greatest asset-
but what happens when their best people leave the institution?
From retirements to unexpected departures, no
community bank is immune to turnover. Employees
leave, and when they do, it's important to have capable
leaders waiting in the wings who can minimize disruption
to the community bank and its customers. Failure to have
heirs apparent in place can threaten everything from a
bank's profi tability to its very existence.
" If you don't have a plan to have people ready and
prepared to step into those roles, then every time you
have an event where you need a new person, you're
delayed in fi lling it, " says Phil Buffi ngton, community
1
Succession plans
need proactive
updating
A succession plan
drafted today may look totally
diff erent than one fi ve years from
now. For example, a community bank
might open a mortgage division three
years after its most recent succession
plan was put into place. If the bank
doesn't update its plan, and over the
next two years that division becomes
one of the bank's primary fee
generators,
fee income
could be
severely
aff ected if
the person
running
the division
leaves.
" The most important issue is that
[succession] has to be a regular
discussion point for the board and
executive management, " Buffi ngton
says. " Don't just think about
updating the written plan because
the regulators say to. Talk several
times a year. "
Succession planning is not a task
that can be delegated to human
resources. It requires engagement
at all levels, including the board.
If the board isn't supervising
succession planning, things can fall
through the cracks.
52 Q ICBA Independent Banker Q December 2021
2
Don't limit your
plan to the
top role
While it's critical
to plan successors for the
president and/or CEO role,
other C-suite positions, such
as chief fi nancial offi cer and
chief risk offi cer, should be
part of succession planning,
too. Bankers should look at
their org charts to identify roles
that are vital to continuing
their operations and success.
Would it set the institution back
signifi cantly if those roles were
suddenly unfi lled? If so, there
should be a succession plan,
Buffi ngton says.
" If you just look at the CRO,
CEO and CFO and aren't
looking at the divisions that
make up the bulk of the bank's
activities, " he says, " then you
may be shorting yourself on the
planning process and leaving
yourself open to gaps where
you might have an immediate
need for a successor. "
bank team leader and partner at the Jackson, Miss., offi ce
of Adams and Reese LLP. " If you can't fi ll it immediately,
the fi nancial institution suff ers. "
The future of every community bank is therefore tied
to succession planning. A good succession plan protects
a bank from losing strategic focus and institutional
knowledge while providing a roadmap for installing new
talent to keep the bank moving forward.
Here, succession planning experts and bankers share
their best practices for cultivating a culture of ongoing
recruiting and career development.
3
Customize your
succession planning
It's never a good idea
to take another bank's
succession plan and use it as your
own. A succession plan should be
tailored to the community bank. " Any
plan you start with has to be adapted,
because each institution has separate
and distinct needs and issues that
must be addressed, " Buffi ngton says.
One bank may have an individual
in position if the president wins the
lottery and moves to Fiji. Another
might have to temporarily divvy up
responsibilities among existing staff
and then hire an executive search
fi rm. Another might have to hire
interim help right away.
The same is true when it comes
to updating the bank's succession
plan. Community banks change over
time. Updating a succession plan
means looking beyond retirements
and staffi ng changes to understand
how an institution has changed and
what roles are important today and
in the future.
Independent Banker - December 2021

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