Credit union boards’ critical role in CEO succession planning

As the saying goes, "nothing succeeds like success," and for credit unions, this means having a well-planned and executed CEO transition. The responsibility for this crucial task falls squarely on the shoulders of the credit union's board of directors.

Hiring a new CEO is one of the most significant challenges facing credit union boards. According to Kevin Smith, consultant/publisher at TEAM Resources, it's also the most important work of the board, and it often takes longer than anyone anticipates. Failing to adequately plan for CEO succession can lead to, at best, a successor who is not well-suited for the credit union or is ill-prepared for the role. 

Don’t be one of the 54% of boards with no succession plan!

When starting a succession plan, boards should:

• Engage in regular discussions.
  Plan monthly conversations with the current CEO about their priorities for the new CEO, considering a variety of plans, options, and scenarios. 
  
  
• Decide whether to focus on internal or external candidates. 
  There are advantages to both avenues. Promoting from within provides insight into the candidate’s fit within the credit union’s culture and existing management team, while external candidates bring fresh perspectives and new ideas. 
  
  
• Obtain employee feedback on what they want in their new CEO.
  Especially for smaller credit unions where the full staff work closely together, this feedback can help create a smooth transition.
   
• Consider engaging a search firm to assist with the CEO succession process.
  While this can be a significant financial investment, it may be worthwhile depending on the experience of the board in hiring CEOs. 
  
  
• Remember this is an ongoing process.
  Regular discussions between the board and the CEO about potential internal candidates and the need for external searches will help ensure a smooth transition when the time comes.