Succession planning is moving to the top of the priority list for organizations facing an aging workforce, regulatory requirements and competition for talent from other industries. A common theme has been that the lack of a succession plan meant a sale or merger was the only viable solution for a CEO's retirement. Is your CEO approaching retirement age? Are there gaps in management positions? Are your regulators asking for your plan?

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Succession Planning for Success
Talent for Today, Tomorrow & Beyond

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Why is Succession Planning Important?
 Effective leadership drives shareholder value
 Aging workforce
 Changing demographics
 Competition for talent from other industries or
financial institutions
 Regulatory requirements
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Positive Outcomes
 Prepares for knowledge and relationship
transition.
 Thoughtful & strategic building of bench
strength.
 Commitment to groom & develop successors.
 Identification of key employees &
development needs.
 Improved employee engagement.
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Potential Drawbacks
 May force recognition of unrealistic
expectations.
 Risk of turnover of a disgruntled
candidate.
 Competition could lead to turnover or
conflict.
 Concern about potential successors and
the resulting direction of the bank.
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Challenges & Roadblocks
 Appears too daunting & time consuming
 Management focus on current issues & bank growth.
 Reluctance to acknowledge the inevitability of a key
employee’s retirement.
 Identifying the appropriate individual with the ability
and capacity to lead the project.
 Obtaining buy-in from those who are needed for the
project to be successful.
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The Planning Process
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Prepare Succession Planning Risk Assessment.Prepare Succession Planning Risk Assessment.
Assess Priority, Scope & Timeline. Assess Priority, Scope & Timeline.
Determine Resource Needs. Develop Budget.Determine Resource Needs. Develop Budget.
Talent Review & Assessment of Successor Candidates. Creation
of Employee Development Plans.
Talent Review & Assessment of Successor Candidates. Creation
of Employee Development Plans.
Documentation / Reporting / Communication.Documentation / Reporting / Communication.
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 There are risks associated with employee
transitions whether the departure is planned or
unplanned.
 These risks increase exponentially when the
positions include the CEO or C-Suite level.
 Succession planning cannot eliminate all risks.
 Preparing a risk assessment ensures potential
risks are identified and considered in order to
mitigate them where possible.
Risk Assessment
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Example: Potential Risks
 New appointee is unable to adapt to corporate
culture.
 Poor deployment of talent against business goals.
 Inability to fill vacancy in a critical role within an
acceptable time frame.
 Potential successors are underdeveloped and not
ready to fill a vacancy in the time frame needed.
 Demotivation and turnover caused by new
appointee.
 Other?
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Assess Priority, Scope & Timeline
 Review current status of bank in conjunction with
Strategic Plan over next 3 years
 Growth Plans
 Organic versus acquisition
 New products or new markets
 Line of business
 Skills needed to achieve growth
 Current demographics
 Planned CEO or C-Suite Retirements
 Total number of employees within 5 years of retirement
age (or subset targeted for succession)
 Are regulators asking for a plan?
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Timeline
 Succession planning should be an embedded part of
your human resources strategy; however:
 The catalyst for beginning the succession planning process
most often determines the timeline.
 For example, if a retirement or separation is to occur within
a one year timeframe, the process will have to be expedited
with a focus on filling the potential open position.
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Accelerated Sample Timeline
•Risk
Assessment
•Set
objectives
•Establish
roles
•Determine
timeline
•Develop
Policy
•Begin
planning
process
Month 1
•Identify
positions
•Identify
potential
candidates
• Document
position
requirements,
needed skills
& candidate
profiles.
•Receive
feedback on
internal
candidates
Months
2‐3
•Recruit if
needed.
•Create
development
plans for
internal
candidates
•Evaluate
compensation
•Review of
talent data
gathered.
•Hire or
promote
individual.
Months
4‐6
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DETERMINE RESOURCE NEEDS
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Determine Resource Needs
Board of Directors
Executive Committee
Compensation
Committee
CEO/President
(Project Sponsor)
Project Coordinator Bank’s Attorney
Advisors
(Consultants)
Committee to Oversee
Project
(Ex/Executive
Management)
Employee
Development
Document
Administrator
(Reporting &
Monitoring)
Budget
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Internal Resources
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Board of Directors
•The Board ultimate responsible
for Succession Planning
Process
•CEO and Board Member
recruiting and selection.
•Some Boards have direct
involvement in C‐Suite
succession planning.
•Ensures the process is
consistent with governance
needs and strategic plan
objectives.
CEO / President
•The CEO’s involvement in
successor selection and
integration is important driver
for a successful transition.
•The CEO’s engagement,
support and guidance is critical
to the success of any
succession planning initiative.
Involvement is needed at all
stages of the project.
•CEO connects and
communicates the project
status to the Board of
Directors.
Succession Plan Committee
•Ensure the succession planning
project meets the needs of the
organization and strategic plan.
•Set the project objectives
•Support the process and assist
with the identification of
positions to be included and
potential future successors.
Identify development needs.
•Recruit candidates and
negotiate terms.
•Evaluate the budget for the
project.
•Set the timeline.
•Review reports and provide
updates to the CEO as needed
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Third Party Resources
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Attorneys
•Ensure employment
contracts are binding and
thorough
•Ensure appropriate contract
terms for the specific
position are included (i.e.,
change in control provisions,
non‐compete provisions)
•Advise on SEC filings if
required
•Advisement when needed
with departing personnel
regarding contracts,
agreements, benefits
•Assist with structuring CEO
transition
Compensation ConsultantCompensation Consultant
•Peer compensation analysis
•Appropriate contract terms
for specific positions
•Job description assistance
•Development of new Benefit
Plans if required for
recruitment (SERP, Deferred
Compensation Plan,
Incentive Plans, Performance
Bonus Plans, etc.)
Other
•Coordinator (if not in‐house)
•Project facilitation
•Project management
•Project documentation
•Executive Recruiters for C‐
Suite Recruitment
•Training/Development if not
in‐house
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Coordinator Selection
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 Key driver
 Trustworthy and discreet
 Individual capacity must be evaluated
 HR Director’s assistance will be needed
 Due to sensitivity, may want to out-source
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Coordinator Responsibilities
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 Assist the CEO and/or project committee in
identifying potential successor(s) for each
position.
 Work with CEO and project committee to
identify gaps in talent and development needs.
 Create training and development plans for
potential successors. Seek training
opportunities for individuals.
 Create report(s) to track the information.

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Budget Considerations
 Coordinator capacity – need additional assistance?
 Coordinator training
 Third party resources
 Employee development
 Recruitment budget (advertising, executive recruiter,
relocation costs, etc.)
 Documentation tools/system
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Talent Review and Assessment
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Talent Review
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Identify critical positions needed to support the Strategic Plan &
business continuity.
Identify critical positions needed to support the Strategic Plan &
business continuity.
Will new talent need to be acquired?Will new talent need to be acquired?
Develop specific individual and bank‐wide plans for
preparedness.
Develop specific individual and bank‐wide plans for
preparedness.
Select competencies needed for success in critical
positions to meet identified business challenges.
Assess readiness of current talent for the identified
current and future positions.
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Identifying Critical Positions
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 Are you entering a new line of business that requires a
special skillset?
 Are you planning an acquisition?
 Which positions would have a significant impact on the
bank if vacant. Would the duties continue as usual?
 Evaluate positions where institutional knowledge is
significant.
 Evaluate positions where relationships are unique to
one individual
 Assess positions where distinct expertise is required.
 Prioritize critical positions

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Core Competency Considerations
 Background and experience level
 Education / certification requirements
 Management skills
 Leadership skills
 Presentation skills
 Community involvement
 Business development skills
 Willingness to relocate
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Assessment of Successor Candidates
• Current performance review outcome
• Consistently exceeds current job expectations
• Who adapts well and is open to change?
• Consider performing additional assessments outside of standard review process
Performance
• Capability of candidate to take on higher level responsibilities
• Consider delegating new projects that require the competencies needed in the
next position
• Leadership assessments for C‐Suite executives
• Experience / Education / Certification Review
Potential
• Time‐based readiness level
• Competency‐based readiness level
• Do your managers having a willingness to mentor?
• Employee desire for promotion
• Employee willingness to relocate if required for succession
Readiness
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Internal Employee Development Plan
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In‐house
training
Leadership
Development
Conferences
Tuition‐aid
benefit
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Acquisition of New Talent
 Which positions cannot be filled internally?
 Which positions warrant external candidate
consideration?
 Which positions only have one identified internal
candidate?
 Recruiting timeline will vary based on the
position
 CEO – typically minimum of 6 months
 C-suite – 1 to 3 months overlap
 Other – may want to “hire up” for current open
positions

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CEO Succession
 Board owns the process
 Identify and document emergency-triggered CEO
succession plan
 Develop profile for New CEO
 Consideration of internal successor candidates (typically
identified and potentially “groomed” by current CEO). Most
likely not a surprise to the Board.
 New strategic direction or new business strategy that requires
specific expertise?
 Community involvement
 Leadership “project” for internal candidates
 Determine appropriate compensation package
 Engage executive recruiter if needed or desired
 Minimum 6-month timeline to recruit

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Management Succession
 Senior Management will typically be involved
with CEO & HR in this process.
 Review the Strategic plan to identify new
initiatives, products and growth objectives.
 Determine appropriate organizational structure
 Identify timeline for projected retirements.
 Assess skills and readiness for existing managers
and their back ups. Identify gaps.
 Do you have multiple successors for each role?
 Internal / transitional pay considerations
 Sponsor training and development programs.
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Board Succession
 Review Board committee charters
 Determine CEO’s role in process.
 Determine upcoming retirement dates for Directors.
 Are there mandatory retirement guidelines in place?
 If not, should there be?
 Consider a Board Self-Assessment.
 Is the size and composition of the Board
appropriate?
 Shareholder expectations?
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Board Succession
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 Review Strategic plan for guidance in determining the
skills and background needed for new directors.
 New line of business?
 Financial expertise for SOX requirements?
 Technology expertise?
 Credit expertise?
 Diversity?
 New markets?
 The appropriate Board committee will develop a list,
interview and recommend candidates for nomination.
They will also assist with orientation & training for new
directors.

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Board Training & Development
 Assess Director development and training needs.
 Director orientation
 Overview of expectations and fiduciary responsibilities
 www.bankdirectorsdesktop.org – Federal Reserve Resource
 FDIC Directors’ Resource Center/Pocket Guide
 Ongoing training
 Fair Lending
 Insiders and Regulation O
 ALCO/Interest Rate Risk
 BSA/AML/OFAC
 Information & Cyber Security/Bank Security/ID Theft Red
Flags/Technology
 Credit Topics
 Regulatory updates

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DOCUMENTATION / REPORTING
& COMMUNICATION
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Documentation
 Begins with the Risk Assessment and Succession
Planning Policy
 Determine what information will be documented
for each position/candidate evaluated
 Determine method of documentation
 Paper or Electronic
 Current HR System capabilities
 Microsoft Office Tools (Word & Excel)
 New Software Needs
 Coordinator or HR typically responsible for
documentation
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Monitoring/Reporting
 Paramount for internally designated succession
candidates for key positions
 Analysis of plan data – trending of profile
components
 Recruiting / development activities
 Plan should be reviewed and updated annually
as part of the strategic planning process to
insure succession plan remains properly
aligned with the Bank’s business strategy
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Communication
 Differs from bank to bank and most likely by position
 The CEO and Board will determine the method of
communication
 Some banks communicate to the internal candidate
pool and others evaluate candidates without their
knowledge.
 There are also banks who are comfortable
communicating to the entire bank that the succession
project is in process.
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Conclusion
Succession Planning is a living process and
should be used as a continual check and balance.
It prepares the bank by identifying what talent is
currently available, what talent may be leaving,
and how to prepare to capture necessary
knowledge and disseminate to it to future
successors.
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Questions?
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Kim Snyder, CPA, CGMA
President & Founder
KBS Results LLC
KimSnyder@kbsresults.com
Office: (540) 685‐2559
Mobile: (540) 819‐2435
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About Us
KBS Results offers executive, financial and risk management services to
companies, with a focus on the financial institutions sector. We take a hands-on
approach by developing a collaborative, engaging partnership with our clients
and are most successful when that partnership results in us becoming an
extension of your management team.
With a combined over 60 years of community banking experience, we
understand the complexities and challenges community financial institutions
face. We recognize that old methods sometimes do not work and new ones
require adroit planning and foresight to gain a competitive advantage in the
rapidly changing marketplace.
We believe in a culture of continuous improvement created through the transfer
of knowledge and tools that will empower our clients to capitalize in their
investment both today and in the future.

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KBS Results Services
Executive
• M&A Planning
• Strategic Planning
• Succession Planning
• Human Resource
Strategies
• Incentive Plan
Development
• Earnings
Enhancement
Financial
• Interim
CFO/Controller
• Outsourced
Accounting / Finance
• Financial Model
Development
• Technology Evaluation
• Profitability Analyses
• Process Improvements
ERM
• Interim CRO
• ERM Assessments
• Risk Assessments
• Vendor Management
• Project Management
• Policy Development
• Facilitated
Procedures
Development
• Core/System
Implementation or
Conversion Support