Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

SUCCESSION – BEST PRACTICES

6. Use formal assessment processes 7. Interact with internal candidates 8. Stage succession without pitting candidates against each other 9. Develop internal candidates rather than always seeking external candidates 10. Departing CEO actually leaves, or board member for limited time

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SUCCESSION – RED FLAGS

 No internal candidates  Departure of promising internal candidates  Chronic poor company performance – and board reluctance to recognize need for change  CEO retirement delayed because no successor  Time-based succession planning (e.g., age) instead of performance based succession planning  CEO limits director access to promising candidates or discourages executive sessions

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