Photo courtesy of Essex Bank
Doug Paul
Chairman of the Board, Essex Savings Bank
Industry experience: 15 years
Essex Bank is heading into a new era as Lynn Giroux is now officially serving as the bank’s new president and CEO. The process of getting there was not a sprint, says the bank’s board chair, Doug Paul.
It was a multi-year process to land on Giroux which included seeking an external opinion. The bank was looking for a leader that can operate in an environment that is seeing innovation and changes. Customers are expecting more from their bank, even if they are of a size of Essex Bank.
Naming a new leader requires a commitment from board members regarding the vision for a bank. As a chair of the board, it was Paul’s job to get a group with varying opinions to be on the same page.
Q: What went into your process of finding a new bank leader?
A: So, Lynn [Giroux] was just named our new CEO and president, and her predecessor Diane Arnold was named that five years ago. She sort of committed to five years and had a five-year term. We’re a small bank. We’re a mutual bank, which means we don’t have shareholders. In effect the depositors own the bank. So we can’t be bought or sold unless the bank wants to go public and do that, but that’s not our intent. So our intent and goal is to continue as a community bank and serve our community and the customers. We are a small to mid-sized bank.
Step one is to make sure the board’s all on the same page with that, and no one’s trying to position the bank to take it public or have it be acquired by a bigger bank, because there are some CEOs, that’s sort of their specialty. You might want somebody else if that’s what you were doing. Conversely, if you’re in a bad spot and you’re in a turnaround situation, there are CEOs in all industries, that’s what they do. They go to places that are in trouble. They do things that they hope will turn it around, and then it either works or it doesn’t but then they generally will move on to another similar situation. Neither of those were our story. We want to keep continuing as we are. That’s very important for us.
Q: What traits do you look for in a new bank leader?
A: We are a community bank. We’re very involved in the community, both by contributions and by involvement. We generally serve a market area surrounding us that are smaller communities, and so the personal service and the culture of the banks are important. You have to know your culture. A CEO from a larger bank might not be the right fit for what we are. It has to be the right fit. So that’s very important, and they have to believe in our mission, etc. So that’s just sort of the philosophical things.
Then there’s the skill level. In our case, it’s both internal and external. Leadership is very important. Obviously, experience, banking operations management experience. We like to, when we can, promote from within. So it’s important that somebody has a focus on trying to develop our staff and provide opportunities for our staff. They have to be good at delegating and overseeing things especially if they’ve been in another function. In our case, both Diane and then Lynn were in-house promotions. They both had to change positions from what they were doing. Sometimes someone has a hard time letting go.
[They] have to be a strategic thinker. Banking is changing very fast. The way my kids bank is different from the way I banked, and so you have to be a strategic thinker. There’s just a lot of change in banking. Technology is super important now, so we want someone who is interested in understanding technology. We’re not going to necessarily be the leader, but we need to be a fast follower and keep up with things and give our customers the same kind of technology services that other bigger banks can do.
Externally, very important in our case, the CEO is the face of the bank. So they have to be very comfortable with people, good with the public. They’re going to be involved in the community, known in the community. So that’s sort of an external skill, and then you know, someone the board has to have confidence in. They have to support the board, and fit our mission which is providing financial service to help our customers achieve their goals, business and personal, and then supporting the community with involvement and contribution.
Q: How do you weigh what the board thinks of a candidate, with also seeking external advice?
A: We felt, with both Diane and Lynn, we had very strong candidates. Of course the board interviewed them, but just to follow through on our fiduciary duty and give ourselves the comfort that we’re comparing them properly and doing the right thing, we actually retained a outside consultant to help us to interview and assess both Diane and Lynn, and assess them and give us their advice as to whether they were good CEO candidates and how they compared in the outside world to other candidates that these consultants might see. We started that process more than a year before we named who was going to be the CEO because we wanted to give ourselves a lot of time to have them assess and if we had to compare them, go outside to have that opportunity as well. We started way in advance because we really wanted to assess them, have a lot of conversation with them, and make use of an outside consultant to give us the confirmation that these are very strong candidates. The decision ultimately is the boards. If you’re promoting from within, the board generally knows the candidates better than a consultant was coming to know them from talking to them. Nonetheless, what you really want is to have the consultant’s experience and advice mirror that of the boards. That’s sort of what we were looking for, and that’s not how you go to the consultant. You just want their honest assessment. In our case, we were fortunate because they came out with the same feeling that the board had.
Q: How important do you think that secession planning is, particularly for smaller and mid-sized institutions?
A: It’s critically important, probably for anybody, but certainly for us. We have a succession plan that we develop for basically every position in the bank. We try and develop the next leaders of the bank. We retain a outside coaching firm that we select certain people to get coaching consultation to develop their skills and their leadership skills. For us, it’s super important to develop from within. It’s not just the CEO position; it’s all sorts of positions. When you’re a smaller bank or any bank, you just have to be very tuned into that because it’s always easier and better if you can have people within that you’re very confident. First of all, they understand your culture, and they embrace opportunity.
Paul’s Five Favorite Things
- Fly fishing
- The Griswold Inn
- College basketball
- Family
- The ocean
