Succession Planning for a CEO - Essay Example

Succession Planning for a CEO Question Lone Star should consider the experience and the qualifications of an individual who will succeed Ritter. Based on the wide range of financial services offered by Lone Star, it will be essential to have a candidate with extensive knowledge in finance and economics. Similarly, the potential successor should have extensive knowledge especially in the banking industry. Herbert et al (2011) implies that the board should not only look for internal successor but also it should look for external individuals who are qualified.

Based on his wide experience as senior vice president of operations, Bob Bowers should replace Ritter. In this way, Bowers who is aware of the bank financial position will be well placed to address the financial challenges that are currently facing the institution. Question 2 One of the ways of identifying and recruiting other internal candidates is by considering their experience and qualifications. Even though majority of the board members are well conversant with the banking operations, individual with a bias in the fields of commerce, finance, business administration and economics are in a better position to deal with Lone Star financial problems.

The achievement of the board members is another factor that should be considered. Board members who have attained significant achievements during their tenure should be given a priority. Internal recruitment process should be undertaken by the company directors, the current CEO as well as a renowned auditing firm such as the Pricewaterhousecoopers. In this way, the recruitment process will be fair to all candidates. Question3 Lone Star should have a succession plan for the CEO position. Based on the significant nature of the CEO position, the board should ensure that a board member with many years of experience in the bank or any other large financial institution is given a priority.

Academic qualifications should also be considered in the succession plan. For example, the CEO should be holding a minimum of Masters Degree preferably in Business Administration. In this way, board members will be eager to undertake further education an aspect that will improve their management skills. It is also vital for the board members to adopt timeline within which a CEO will be in office. For example, the board can stipulate that CEO should stay in office for 10 years. However, the board should be at liberty to increase the tenure of the CEO if he or she portrays remarkable performance.

Question 4 In addition to the succession plan for CEO, Lone Star should have a succession plan for other individuals. Based on the fact that the senior vice president of operations has an opportunity of becoming the CEO, it is vital to have a person who has the ability to occupy the vice president position. In this way, the position will not remain vacant for a long period of time. This will entail coming up with a succession plan that takes into consideration the performance and the qualifications of senior managers who have the opportunities of becoming board members.

This implies that a succession plan for senior managers is also paramount. Such plan will ensure despite promotion of the senior managers to a position of a board member, banks operations at the departmental level will not be jeopardized. References Herbert, G., Heneman, John, D., John, M and Timothy, J. (2011). Staffing Organizations. New York: McGraw-Hill Higher Education.