Independent Banker - July 2019 - 62

families that have majority control, there are some
important nuances. First, the family must fi gure out its
own goals for the direction of the bank. Second, it must
hold strategy sessions with the board to determine how to
achieve those goals.
Randy Compton of $501 million-asset Pioneer Trust
Bank, N.A. in Salem, Ore., has a twin brother, Mike
Compton, and son, Brad Compton. Brad is an offi cer at
the bank and both brothers are CEOs and board co-chairs;
Mike is CEO of Pioneer Trust Bank's trust department and
investments, while Randy is CEO of the bank itself. Randy
company, Wilcox Bancshares Inc., in Grand Rapids, Minn.
He says that when Grand Rapids State Bank's board
rotated his grandfather off years ago, they let him know
that in a couple of years, they might want to move him
to an emeritus position for a year or two and then have
him no longer attend meetings. " It took a couple of
years of having dialogue, " says Wilcox, " because when
you're family, and especially when you're family and
have ownership, I think there's oftentimes a sense of
entitlement to a seat on the board just because of the
ownership issue. "
Wilcox is starting the dialogue right now with his father.
" When you're family ... I
think there's oftentimes a
sense of entitlement to a seat
on the board just because of the
ownership issue. "
-Noah Wilcox, Minnesota Lakes Bank and
Grand Rapids State Bank
says they agree that eff ective succession planning must
address who's going to be next in line and how they plan to
pass leadership from generation to generation.
The Comptons' strategy is to have representatives from
each family on the board who are part of the planning
process. Randy says there is a steep learning curve. " It
takes a long time, I think, for a board member to really
get up to speed and really understand things, " he says.
" We're constantly working with them, and that's part of the
process you have to go through. "
How to have the awkward conversation
Timing and communication are key to successfully
transitioning a family member on or off the board. " It can be
tricky with family, " says ICBA chairman-elect Noah Wilcox,
CEO and chairman of $100 million-asset Minnesota Lakes
Bank in Delano, Minn.; and president, CEO and chairman of
$235 million-asset Grand Rapids State Bank and its holding
60 Q ICBA Independent Banker Q July 2019
" He's only 70 years old, but he's been retired from the
business for a number of years, " he says.
He had tried being blunt, telling his father, " Well, now
that you're moving your residency to Arizona, maybe
now is the time to resign from the board, " but his
father's reaction was not what Wilcox expected. " He
looked at me like I was from Mars. "
Wilcox realized then that he would have to take a
gentler approach and let it play out more naturally.
Wilcox also believes planning for a transition comes
down to communication and clear expectations. " I tell our
directors at our annual meeting in January every year, 'It's
a one-year appointment. You don't have a board seat for
life,' " he says.
Smith says that with a family bank, the issues aren't as
straightforward as they are in nonfamily businesses. You
have to consider that it's Uncle Bob or Grandma Patty
on the board. " Those [situations] carry some unique
concerns, because you're trying to balance the benefi t
of the bank with what everybody's going to be doing at
Thanksgiving, " Smith says.
Preparing for transition
The tricky thing with succession at family-owned banks is
the board must plan around the major events of family life.
Scott Beeley is president and CEO of $172 millionasset
Bank of Terrell in Dawson, Ga., and his wife, Lucie
Beeley, is chairman of the board and president of the
holding company. Scott believes it's never too early to
start communicating about transition. The bank and its
holding company were in Lucie's family, and she stepped
into the leadership role when her father retired as
chairman in 2012.
He admits the board didn't do a good job of contingency
planning for the transition between Lucie and her father,
and that more conversation and transparency would have
made the transition easier.
Independent Banker - July 2019

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