Our latest contest for the temporary presidency of Schmidlap National Bank asked how banks should plan for the retirement of board members and top officers.

John G. Greer, president and chief executive at New Richmond National Bank in New Richmond, Ohio, said he believes "the institution is more important than the individual.

"I am a 41-year-old CEO. Our bank has a succession plan. Why? Because it's the right thing to do!"

Richard M. Bell, president and CEO of First National Bank of Three Rivers (Mich.), said his bank recently adopted a policy that requires directors to retire from boards within two years of retiring from their jobs or at age 70, whichever occurs first.

The bank also requires directors to submit their resignations for consideration if they no longer represent the company or occupation they represented when first appointed to the board or they move outside the bank's primary market area.

Mr. Bell's bank also has documents that name an acting CEO in case the current officeholder dies, falls ill, or resigns.

Our winner, though, is Robert W. Klockers, president and CEO of VASA Group of Middleton, Wis.

Before joining this consulting group he was a community banker in Kansas and vice president of the graduate school of banking in Madison, Wis.

Mr. Klockers writes that the problem of succession is especially difficult in family-owned banks, where it's not uncommon to see officers and directors well into their 70s. To overcome the ticklish problem of pushing aside older directors, he suggests naming these people emeritus directors and keeping their director fees unchanged.

What makes him the winner is a schedule he sent in showing his "12 Tasks in Succession Planning." While these are geared to family-owned banks, many apply to all banks.

Mr. Klockers 12 tasks are:

1. Continuing family ownership.

2. Talking openly about death, inheritance, favored siblings, and other topics that are usually avoided.

3. Getting management commitment.

4. Involving other major stakeholders.

5. Reaching consensus on key issues. This may involve a family council in closely held banks.

6. Developing a vision and assigning roles. ("This may bring up a conflict between some people's vision of what they want to do and the skills they have.")

7. Choosing and training a new leader.

8. Building authority in this new leader.

9. Estate planning.

10. Understanding the rights, roles, and responsibilities of ownership and management.

11. Informing important stakeholders, such as community leaders, government officials, and business executives.

12. Developing a contingency succession plan for a worst-case scenario that might upset the plan in place."

"Succession planning is a process, not an event," Mr. Klockers says. Mr. Nadler, an American Banker contributing editor, is a professor of finance at Rutgers University Graduate School of Management.

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