Next KeyCorp CEO a Product of Old-School Grooming

US Banker  |  November, 2010

By Matt Monks

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Running a large bank is one of the most prized — albeit toughest — jobs in finance. When Beth Mooney was tapped to head KeyCorp on Thursday, she heard from a number of the lucky few who have had the privilege.

There was an e-mail from O.B. Grayson Hall, a former co-worker who took the reins of Regions Financial Corp. this year. Thomas Hoaglin, a former Huntington Bancshares Inc. chief executive, passed along his congratulations. So did John B. McCoy, a former head of Banc One Corp.

"I do think it's a big day-in-the-life-of" moment, Mooney said in an interview Friday. "I've heard from my first boss. I've heard from a lot of my bosses along the way. I've heard from other bank CEOs. I've heard from other women that are prominent in the industry."

Among those women: Pamela Joseph, the vice chairman of payments for U.S. Bancorp, another member of an elite circle of executives — not to mention female bankers — experts say have the skills and experience to run a large bank.

The story of Mooney's ascension to the top of the $95 billion-asset KeyCorp highlights how the bench strength of the nation's banking industry is going to be put to the test in the coming years. Big-bank boards will increasingly look to relieve aging CEOs who oversaw the industry's collapse and recovery, given the strain of the last few years and deep challenges ahead. KeyCorp — for instance — asked departing CEO Henry Meyer 3rd, who turns 61 next month, to start thinking seriously about a successor more than a year ago.

"What the board said is, Henry, not today, but at some point, you're going to retire and we'd like to have internal candidates," Meyer said in a joint interview with Mooney. "I had Beth as a high-potential candidate."

Succession is one of the thorniest issues in managing any organization, but it may be particularly difficult in contemporary banking. There just aren't a lot of people like Mooney out there who have had much practice running a big bank. Her ascension sent ripples through the industry for that reason and because she is the first woman CEO of a large U.S.-based banking company. She said she got "hundreds" of e-mails hours after KeyCorp announced Thursday that she would succeed Meyer in May 2011.

The names of some of the people in her inbox in a lot of ways represent where the industry is going and where it has been.

Mooney, 55, is among the last generation of bankers groomed the old-fashioned way: when the decentralized nature of most banks before the megabank era gave up-and-comers chances to be mini-CEOs. That's how Hall, who worked with Mooney at AmSouth Bancorp., and Hoaglin came up.

As banks have gotten larger, giving regional executives broad leeway on lending and pricing decisions became less feasible.

No company illustrates that better than the now-vanished Banc One. It is no coincidence that both Hoaglin and Mooney honed their skills at Banc One, which before its takeover by JPMorgan Chase & Co. was famous for churning out CEOs and for letting its regional bankers do their own thing.

Hoaglin was Mooney's boss at Banc One in the mid-1990s. She did such a good job as his chief financial officer for the Ohio region that he picked her to run Akron and Dayton, important markets.

"Beth did not necessarily know how to do the assignment she was asked to perform," Hoaglin said. "She excelled all the time."