It's time for a new contest to appoint a president for the day of our Schmidlap National Bank.

This one should leave us inundated with responses.

The question: What makes a good CEO?

We all know that the chemistry of leadership is hard to define but easy to see in action. "An institution is the length and shadow of one person."

Time after time we have seen a new CEO either turn a bank from a loser to a winner or, conversely, snatch defeat from the jaws of victory, seriously harming an institution that was doing well when he or she arrived.

So, what makes a good leader?

In a recent presentation to the KPMG Peat Marwick Financial Services Business School, M.A. Schapiro & Co. investment banking director Richard J. Kelly highlighted some of the signs of a good CEO.

He indicated that minimizing bureaucracy and disseminating authority closer to the customer is a key to a successful bank - and the decision to do this is one only the CEO can make.

He describes well managed banks as "those that don't do much that is dramatic, but they do everything a little bit better than the rest; control costs, serve customers, and collect fees. And they grant credit with a lot more restraint. They don't tend to be empire builders and seldom pay up for acquisitions, yet somehow when credit turns bad, they've got things under control."

But instead of having our contest solicit other broad principles of the impact of a good CEO, I would like to concentrate this time on the little things I have seen that show the workings of a top CEO in the hope it will bring forth your responses of similar signs of a top manager.

I remember when I worked for Old Kent Bank as a semiannual visitor for one day of talks. I turned to Dick Gillette, then the CEO, during one visit and said: "Dick, I haven't had a raise for seven years now. I think it's time."

His response: "It's been six years." which showed me that before I came to Grand Rapids he had looked into this as part of his normal preparation for my visit, just as he examined every other detail affecting the bank and its people.

I don't remember if I got a raise that day, but I sure remember how impressed I was with his knowing where I stood with the bank.

I remember when real estate investment trusts were just being formed and everyone was agog about their prospects. I was a passenger on Commerce Bank of Missouri's plane with CEO Jim Kemper, who at that time was looking at some prospectuses on REITs. He exclaimed, "Why, these are just third mortgages on rotten properties." A lot of banks could have saved millions with Jim Kemper's sagacity.

Recently I learned that Arthur Courshon and Bart Goldberg, chairman and president, respectively, of Jefferson Bank in Miami, were told by the Office of the Comptroller of the Currency that they must write off a loan on a restaurant that had blown away in a hurricane, as there was no property left as collateral.

Their response: This borrower is a Holocaust survivor who has never been one minute late on a payment and never will be, whether there is a property under the loan or not. We will not write it off.

When the national bank examiners insisted that they write it off, the bank switched to a state charter . (P.S. The loan is still current.)

I remember hearing of several CEOs who would spend Christmas Eve on the front line in the operations center so employees forced to work there would know their job was important enough for the CEO to be there as well as the troops.

And I remember the old National Community Bank of New Jersey whose staff was so loyal to CEO Bill Staehle that no one would think of asking for a raise.

"When I deserve it, Bill will give it to me," was their attitude.

I may add that these may be small examples, but the banks involved were top performers under their leaders.

These, then, are some of my examples of what makes a good CEO or, rather, what good CEOs do in action?

I'd love to hear your examples. And you might be the winner of Schmidlap National Bank's presidency for a day, and the accompanying certificate attesting to your prowess.

Mr. Nadler is a contributing editor of the American Banker and professor of finance at Rutgers University Graduate School of Management.

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