Pub. 7 2016 Issue 4

www.wvbankers.org 18 West Virginia Banker Succession Planning – Beyond the Board of Directors Level By Christopher S. Nice, CPA, CISA, CGMA | Arnett Carbis Toothman llp Partner O ver the past ten plus years, through either strategic planning initiatives or via regulatory examiner directed actions, community banks have made significant progress in identifying and addressing succession issues that were prevalent within their Boards of Directors. As a result of those actions, many community banks instituted mandatory retirement ages at the Board level to allow for their respective banks to provide a channel by which a new generation of leaders could begin to emerge and allow for a smoother transfer of institutional knowledge as well as enhanced exposure within their bank’s community so as to continue on with their bank’s overall vision. Simply defined, succession planning is a process for identifying and developing internal people, or external people in the absence thereof, with the potential to fill key business leadership positions within a company. Unfortunately for many community banks, the focus on succession planning has been at the board level only and planning for other key leadership positions, for most banks, has been on the back burner. Recent statistics have illustrated that every day within the United States of America approximately 8,000 individuals are filing for social security. Considering West Virginia’s population has declined and is projected to have continual declines in the next few years, succession planning beyond the board level has become an even more critical issue for community banks for a multitude of underlying reasons. Without a robust and comprehensive succession plan banks can lose track of their strategic goals and increase the susceptibility of being acquired by another bank for the purposes of survival due to inability to compete