Independent Banker - December 2021 - 58

6
Make sure your plan
includes processes
It's not enough to say that a
community bank is going to look
7
internally or externally for candidates to fi ll an
open position. There needs to be a process that
outlines how to identify candidates and where
to look, Buffi ngton says.
For example, if there isn't anyone in the IT
department, the bank should develop a plan
stating where in the technology space the bank
will look and how it will identify candidates
who can learn and thrive in a
regulated environment.
Central Valley Community
Bank relied on its succession plan
when president and CEO James
Ford announced his retirement
in March 2021. The $2.3 billionasset
community bank in Fresno,
Calif., had hired James Kim, a
former community bank CEO, as
its chief operating offi cer in 2018.
The board had been evaluating
his work and recognized Kim as a
likely successor within two years
of his arrival. As a publicly traded
company, however, the bank felt
it was important to also evaluate
external candidates, Ford says. Ultimately,
the job went to Kim.
Use succession planning for business
continuity planning
While succession is a long-term issue, it
can have short-term implications in an
emergency situation, as COVID-19 reminded us. A
succession plan can identify staff members who may
be prepared to step up and fi ll a role if the bank has to
enact its business continuity plan.
" Regardless of the cause, if we lose a key decision
maker, we need to know what to do, " Bodine says.
" Who fi lls the role? That's something regulators are
looking keenly at. "
Farmers National Bank in Canfi eld,
Ohio, is constantly evaluating employees
and conducting annual succession
planning for about 10 to 12 executive
positions and 30 other key roles. Current
leaders review and update their job
descriptions and then evaluate employees
both within and outside their chain of
command, scoring them on a matrix
of leadership and performance. The
$4.1 billion-asset community bank then
tailors development plans for the top
two or three people for each role and has
the board review it, says Mark Nicastro,
senior vice president and chief human
resources offi cer.
" It serves two purposes: succession
planning and disaster recovery, " he says. " It shows us
who is the next person to promote into that role. "
BONUS TIP #2
Ask about future plans-delicately
Succession planning can be a sensitive topic
for current community bank leaders. Some
employees are uncomfortable talking about
the personal reasons behind retirement,
such as health or family matters.
When talking about retirement, steer
clear of medical issues and putting any
one person on the spot, says Doc Bodine,
managing director of Gerrish Smith
Tuck Consultants and Attorneys PC in
Memphis, Tenn.
Instead, ask a group of employees or board
members about potential exits, reminding
them that regulators need to know the plan.
People will often volunteer information in a
casual group conversation if they're asked.
Be sure to consult employment laws to avoid
discrimination issues.
" I can't tell you the number of times I've
asked if anyone is thinking about resigning
from the board or if an off icer is thinking of
retiring and someone says, 'Oh yeah, I was
thinking of not running for re-election,' "
Bodine says. He recommends bringing in a
neutral third party to lead the discussion,
if necessary.
54 Q ICBA Independent Banker Q December 2021
Independent Banker - December 2021

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