What Makes a Great Bank CEO

strategic-vision-7-27-15.png“I think as a company, if you can get those two things right—having a clear direction on what you are trying to do and bringing in great people who can execute on the stuff—then you can do pretty well.”

That pearl of wisdom comes from a 30–something chief executive officer who has helped launch a social media revolution in this country. Maybe you’ve heard of him–Mark Zuckerberg, one of the founders of Facebook. For all his precociousness, I think that Zuckerberg has identified two of the most essential traits of an effective CEO—the ability to lay out a strategic vision for the company, and then bring in talented people who can make that vision a reality. I’ve been thinking about this recently because I believe that over the next 10 years, we’re going to see a big demographic shift among the ranks of bank CEOs as the last of the baby boomers give way to younger generations including, possibly, some millennials. And the coming decade could turn out to be very interesting.

There are certain characteristics or skills that I think all CEOs, in the banking industry as elsewhere, need to have. They absolutely need to be excellent leaders, with the kind of people skills that enable them to work through others, rather than trying to accomplish everything themselves. And the larger the company, the more important it is that they know how to empower their employees. CEOs also need to have strong communication skills, both with their employees and their customers. They obviously need to be good bankers, which over the past several years has meant being good lenders. Some have become good deal makers since banking is still a consolidating industry. They also need the kind of collaborative skills that will enable them to work with an engaged board of directors, which has the potential of making them better in their jobs. And at smaller banks, the CEO needs to be well connected to their community because that’s where the business comes from.

I tend to think of these traits and skills as table stakes for effective bank CEOs. But each generation of CEOs seems to face a different kind of challenge, which calls on their adaptive capabilities. Anyone who has been in the job for the last 10 years had to deal with the challenge of the 2008–2009 financial crisis, which required many banks to work through a pile of bad loans, raise capital and adjust to a greatly increased level of regulation. Each generation of bank CEOs seem to face a different set of challenges, and I don’t expect it to be any different for the next group.

They will need a much more sophisticated understanding of technology, not just in the traditional sense of core processors, ATMs and teller platform systems, but in the larger context of how mobile and digital technology are beginning to change the delivery of consumer and small business banking products and services. And one of their biggest challenges will be to manage the transition from a distribution system that is branch–centric to one that is much more reliant on digital and mobile going forward. This is one of those trends where it might be hard to perfectly time your bank’s migration from brick–and–mortar to digital and mobile, but you don’t want to be too far out in front or too far behind.

This next generation of CEOs will also have to prepare for the emergence of millennials, both as customers and as employees. Be sure to check the July issue of Bank Director digital magazine for a fascinating cover story on the challenges of managing millennial employees, who are now entering the workforce in meaningful numbers. Millennials are also a driving force behind widespread consumer preference for alternative channels like digital and mobile, and as a group they probably have less loyalty to the concept of a traditional bank than their Gen X older siblings or baby boomer parents. Each year they will account for an increasing percentage of the industry’s customer base, and they want to be banked differently.

Unfortunately, the next generation of bankers will also have to become experts at managing the regulatory agencies that supervise their bank. Previous generations have had to worry about regulatory compliance as well, but today’s overseers play much more of an activist role and expect to have an open dialogue with the CEO and the board about any significant action or event that impacts the bank. The CEO—who is the focal point for any communication with the regulators—must be able to manage that relationship in a positive and constructive way.


Jack Milligan


Jack Milligan is editor-at-large of Bank Director magazine, a position to which he brings over 40 years of experience in financial journalism organizations. Mr. Milligan directs Bank Director’s editorial coverage and leads its director training efforts. He has a master’s degree in Journalism from The Ohio State University.