Seven Secrets of Succession Success

A well-orchestrated plan of succession and leadership continuity reassures employees, investors and communities

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One of a bank board’s most vital responsibilities is overseeing the plan of succession for the CEO. Whether driven by a looming retirement or change in the incumbent’s personal timeline, a well-orchestrated plan of succession and leadership continuity reassures employees, investors and communities. Unfortunately,
too many bank boards still take a passive approach to CEO succession, rather than acknowledging that as directors, they are responsible for the selection and ongoing evaluation of CEO performance.

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This article appeared in the February 2018 issue of BankDirector.com, copyright 2018.

Alan J. Kaplan is Founder & CEO of Kaplan Partners, a retained executive search and talent advisory firm based in Philadelphia. Kaplan Partners is the country’s only retained executive search firm member of the ABA & ICBA. You can reach him at alan@KaplanPartners.com or 610-642-5644.

Does Your Bank Have A Dream Team

Assessing Your Bank’s Leadership Team is the Foundation of Successful Succession Planning

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Many bank Boards of Directors and CEOs are proud of their bank’s executive team. And rightly so! Yet frequently those feelings of pride dissolve into uncertainty when the bank is faced with the decision to promote a banker into a top executive position or even the CEO role.

How does this happen? Why do well laid out succession plans sometimes evaporate in the face of reality when the time to elevate someone finally arrives? One of the reasons, based on our experience working with hundreds of community bank boards and executive teams, is that directors are often missing context when faced with a promotion decision. The lack of relative perspective on comparative candidates for similar roles may at times impede the comfort level necessary for a board to validate a promotion decision.

<To Read the Article in its published format, click here:  Dream Team Article A 8-2017>

This article appeared in the Pennsylvania Association of Community Bankers Publication in 2017.

Alan J. Kaplan is Founder & CEO of Kaplan Partners, a retained executive search and talent advisory firm based in Philadelphia.  Kaplan Partners is the country’s only retained executive search firm member of the ABA & ICBA.  You can reach him at alan@KaplanPartners.com or 610-642-5644.

The Bank Director of the Future: Diversity of Experiences and Skill Sets Matter

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While the requirements needed in a bank leader today continue to evolve, the same can also be said for bank directors. Boards of directors today are under more scrutiny than ever before, whether from governance advisors, shareholders, Wall Street analysts, activist investors, community leaders and customers. Even mutuals and privately held institutions face more visible scrutiny around corporate governance from their regulators and key constituents. Serving as a bank director today may still have a certain amount of prestige (depending on whom you ask), but the expectations for director performance and engagement have never been higher.

Community banks in particular tend to have long tenured board members—in many cases with decades of service. Continuity can be a good thing, provided the director skill sets continue to be relevant and the board does not become too close to the CEO, compromising objectivity. However, many bank boards have begun to focus more on the “collective skills” represented around the board table, and have started to emphasize a skill-based approach in making director retention and recruiting decisions.

<To Read the Complete Article in its published format, Click here:     <The Bank Director of the Future Diversity of Experiences and Skill Sets>

The article appeared in the February 2017 issue of BankDirector.com, copyright 2017

Alan J. Kaplan is Founder & CEO of Kaplan Partners, a retained executive search and talent advisory firm based in Philadelphia.  Kaplan Partners is the country’s only retained executive search firm member of the ABA & ICBA.  You can reach him at alan@KaplanPartners.com or 610-642-5644.

The Bank Executive of the Future: Agile and Focused on Talent

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Today’s bank leader remains under more pressure than at any time since the financial crisis. Tangible skills still matter, such as commercial credit experience, risk management and strategic planning.
Nevertheless, the real challenges may lie in developing the key leadership requirements for institutional success, and in the navigation of the managerial challenges which lie ahead. Here are three intangible but particularly important qualities for the future bank leader’s success.

<To Read the Complete Article in its published format, Click here:     <The Bank Executive of the Future Agile and Focused on Talent>

The Article appeared in the January 2017 issue of  BankDirector.com, Copyright 2017.

Alan J. Kaplan is founder and CEO of Kaplan Partners, a retained executive search and talent advisory firm based in Philadelphia. Kaplan Partners is the country’s only retained executive search firm member of the ABA & ICBA. You can reach him at alan@KaplanPartners.com or 610-642-5644.

Meet the New Bank Executive

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Today’s bank leader is under greater pressure than at any time since the financial crisis.  While the crisis itself was a hot mess, the banking climate remaining in the aftermath of the Great Recession has likely altered the course of the industry for decades to come.  The two most vital ingredients today for a bank’s long-term autonomy are capital and talent.  Without those two key elements, a bank’s future survival becomes much more of an uphill climb.

Much has and will continue to be written about the tangible banking skills and technical proficiencies which have become necessities for leaders in the industry today.  There’s a shopping list of experience with subjects such as regulatory relations, balance sheet management, capital strategy, commercial credit, investor relations, risk management, technology and strategic planning that are now considered “table stakes” for bank leaders and CEO contenders.  Despite this daunting plethora of needed banking skills, the real challenges lie in development of the key leadership requirements for institutional success, and in the navigation of the managerial challenges which lie ahead.

There is no shortage of experts touting their views on the vital leadership competencies of the day.  So we will focus here on three intangible but particularly important areas of emphasis in the human capital arena which are critical for the future bank leader’s success:  cultural agility, workforce flexibility and talent-centricity.

<To Read the Complete Article in its published format, Click here:    Feature_Hiring_OctNov_Banking Exchange 2016  >

The article appeared in the Oct./Nov. 2016 issue of Banking Exchange magazine, copyright 2016 by Simmons-Boardman Publishing.

 Alan J. Kaplan is Founder & CEO of Kaplan Partners, a retained executive search and talent advisory firm based in Philadelphia.  Kaplan Partners is the country’s only retained executive search firm member of the ABA & ICBA.  You can reach him at alan@KaplanPartners.com or 610-642-5644.

 

 

 

Inside the Chief Financial Officer Role

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Alan Kaplan, Kaplan Partners, USA

Founder and CEO

How would you describe the outlook for the CFO function in the US?

The CFO function has always been a critical role in organizations, but in the post-crisis era the finance function has taken on additional significance for a variety of reasons. During the financial crisis, a few different factors become important to a company’s financial success: 1) financial strength, 2) cost control and 3) finding growth opportunities. Overlaying all of that is a more proactive regulatory environment; this has been a huge challenge on financial institutions and those managing these companies. Any publicly-traded company is under greater scrutiny from the SEC and the investor community. All of these factors have elevated the visibility of the CFO role as being front and center in a much wider range of activities. If you’re a CFO at a growth company or a company that is a large cap company, your ability to interact with the investor community has become more important than ever.

As a result, the demands on CFOs are greater. There is high demand for well-credentialed finance and accounting professionals who can function more strategically, rather than tactically. The demand is greater than the supply for these kind of finance professionals.

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A Tale of Two CEO Succession Plans

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Written by, Jack Milligan, Editor in Chief for Bank Director

In January 2014, the board of directors at Union Bankshares Corp. decided that it was time to begin considering a successor to President and Chief Executive Officer G. William “Billy” Beale, who at 65 was starting to think about his own retirement. This was a pivotal time for the now $8.1 billion asset bank, which is headquartered in Richmond, Virginia. The 2013 acquisition of Charlottesville, Virginia-based StellarOne Corp. had nearly doubled the company in size, and eight of the StellarOne directors joined the board of the merged company. The newly expanded board was firmly committed to a growth plan that would take it past $10 billion in assets, where several important regulatory requirements would kick in, so the new CEO would have to be capable of managing a larger bank in a more rigorous regulatory environment.

Managing an orderly and ultimately successful CEO succession process is one of the board’s biggest responsibilities, and can be a stressful situation under the best of circumstances. And, in this instance, the eight directors from StellarOne and 11 directors from the old Union would have to work together on a potentially sensitive issue, despite the fact that they were still getting to know each other. Beale says the board engaged a consultant to help it develop a consensus on the kind of individual it was looking for, and the directors ultimately agreed on a set of expectations for the new CEO’s work experience and competencies.

<To view the Article in its published format, click here   BD Tale of Two Succession Plans >

What to Look for in Your Next CEO Part II

<To view the Article in its published format, click here  What to Look for in Your Next CEO Part II>

Selecting your bank’s next chief executive officer remains the board’s single most important responsibility. The risk of selecting an underprepared or inadequate leader is high, and can impact the bank’s strategic direction, reputation and ultimately, its viability. As highlighted last month, there are many critical banking industry skills needed in a leader today. In addition, there are intangible competencies and leadership qualities which are equally vital for the success of the CEO and the institution. Here, we emphasize ten leadership competencies and attributes which have proven vital for bank CEOs.

<To Read the Complete Article in its published format, click here  What to Look for in Your Next CEO Part II>

 

 

What to Look for in Your Next CEO: Part I

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Selecting a chief executive to lead your institution is a bank board’s single most important responsibility. Everything flows from this decision, including the bank’s strategy, reputation, the ability to attract critical talent, investor and employee confidence and the credibility of the board itself. Selecting an underprepared or inadequate leader—no matter how well liked or how long employed—can quickly send a bank in the wrong direction.

The list of optimal skills required in a bank CEO today could easily include dozens of items. Here we will highlight ten technical skills that we see as “must haves.” Next month, we will highlight ten leadership competencies and attributes which will complement the qualifications below.

<To Read the Complete Article in its published format, click here: What to Look for in Your Next CEO – Part I>

 

 

Today’s New Bank Leader

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The banking industry today is operating in an environment that few could have anticipated, yet requires an increasingly complex mix of banking skills, leadership capabilities and interpersonal qualities in its leaders. Having spent time recently speaking with hundreds of bank CEOs, Board Members and senior executives, the requirements for success as a bank leader today have crystalized. Each letter below represents a vital element of successful bank leadership:

B is for Balance Sheet Savvy Today’s bank leaders must understand the risks inherent in the current interest rate environment, whether due to potential funding mismatches or the risks from declining securities values in a rising rate environment.

A stands for Asset Quality, and the ongoing need to remain vigilant regarding credit quality. There’s still no quicker way for a bank to falter than to suffer from a spate of bad loans. Regulators continue to focus on credit culture, policies and procedures as well.

N is for Non-Interest Income Everyone wants more, but how do we actually grow revenues? Increasing fees on customers always carries some potential fallout. And, building lines of business such as Wealth Management, Insurance or other products involves a significant up-front investment and a longer term return. There are few easy answers here.

K represents Capital As everyone knows, this is the most critical ingredient that banks need today to survive and drive growth, whether organic or transactional. A lack of ample capital not only constrains strategic plans, but too often invites a call from your regulator.

The L in Bank Leader does, in fact, stand for Leadership. While great leadership remains an obvious prerequisite for success, the demands on bank leaders today are more strenuous and complex than at any time since the Great Depression. Many bank boards struggle with the challenges of succession and developing that vital next generation. In addition, the mantle of leadership should extend much further into the organization than just the CEO’s office or C-Suite executives for an organization to truly succeed. While the CEO sets the tone, everyone should lead by example in their daily interactions with customers and colleagues.

E stands for Emotional Intelligence This is the critical aspect of leadership in which you see your bank’s leaders communicating effectively, leading from the front rather than the rear, and following a “servant leader” mindset. The emotionally intelligent leader knows that it truly is not about them, but rather the people on their team. When the team is successful, the leader succeeds as well.

A represents Authenticity One of our favorite leadership attributes, authenticity occurs in the leader who means what she says, and does what she says she will do. It’s the ability to create “follower-ship” through actions and a genuine approach to dealing with a bank’s varying constituents.

D is for Digital Savvy Today’s community banks need an approach to the digital world that is timely, relevant and real. Whether you like it or not, the technologies that are revolutionizing banking today are not just impacting the industry’s back office, but have become a vital channel for growth. Banks must play offense here, not defense.

Our second E represents the Employee Bank CEOs and Directors regularly praise their employees for good work and great service. While these are the foundation upon which our institutions are built, they are simply not enough anymore. If your bank is going to win against the competition, it must have the absolute strongest cadre of bankers possible—from the executive team to front line lenders and managers, to the employees behind the scenes. Next to Capital, Talent—and talent’s ability to execute your plan—is the only remaining differentiator in banking today.

R, of course stands for Regulatory In the current climate, the ability of bank leaders to forge a constructive working relationship with their regulators is vital. Banks that take a combative tone with their examiners usually end up on the wrong side of their exam. While the regulatory climate may have overreached, it is what it is. High performing bank leaders figure out how to operate successfully under this dynamic, and forge positive regulatory partnerships.

As Billy Beale, CEO of Richmond, VA based Union First Market Bank stated at the Bank Director Acquire or be Acquired Conference: “banking is not complicated, but it has gotten awfully complex”. Today’s Bank Leader needs a plethora of banking skills, leadership competencies and personal attributes to be successful. Anything less than a full suite of these talents may not only impact your bank’s ability to win, but could ultimately put the institution itself at risk.

Alan J. Kaplan is Founder & CEO of Kaplan Partners, a retained executive search and talent advisory firm focused on serving community banks. Based in Philadelphia, Kaplan Partners is  the country’s only retained executive search firm member of both the ABA and the ICBA. He is reachable at Alan@KaplanPartners.com or 610-642-5644.