Credit Union Times - February 15, 2012

the Challenge of succession Planning for Ceos and Boards

GUEST OPINION

aximizing and ensuring member value and performance requires an ongoing review of the depth of talent in your credit union as well as the right complement of skills to lead effectively and navigate changing strategies. As markets become more global and technology continues to play an even greater role in strategy, the criteria established for both CEOs and succession planning candidates emerges and changes over time.

These skill sets need to be linked to the strategic plan, performance reviews as well as the CEO and board dashboards. It’s the role of the board to understand key strategic drivers of the credit union one to two years, three to five years and five to 10 years out.

Criteria will evolve from these
drivers that will define the required
skills sets for the CEO, CEO succes-
sion candidates and board member
candidates as well. Criteria estab-
lished also will assist in filtering out
certain candidates that do not help
to affirm your chosen strategies. At
the board level, it’s important to ask,
“Am I bringing fresh thinking and do
my skill sets match what’s needed
for the credit union strategically?”
Having succession discussions
on a regular basis takes courage.

“leadership succession”, there are
leading practices in CEO succes-
sion planning, reviewed during
the NACD webinar, that can be ex-
tremely helpful to ensuring that
this process is effective, including
human resources in the develop-
ment of leadership capacity within
the organization, but if the board
never takes responsibility for this
process by owning it and driving
it, it will never happen effectively.

As markets become more global and technology
continues to play an even greater role in strategy, the
criteria established for both CEOs and succession
planning candidates emerges and changes over time

but not limited to: plan three to five years out; prepare a comprehensive emergency succession plan; ensure full board involvement; establish open and ongoing dialogue with annual review of CEO and succession candidates; develop and agree on selection criteria; use formal assessment processes; interact with internal candidates; develop internal candidates rather than recruit externally, and have an outgoing CEO leave or stay on as chair for a limited time only.

Due to the complexity of this is-
sue, and the required interplay be-
tween the board and the CEO, the
board must own this process. Signif-
icant dollars can be spent through
This process must be linked to HR to
ensure that the leadership legacy of
the company is developed. But the
board must be in control.

Election Might Usher In More Oversight of Regulators

MARX ON CAPITOL

Claude R. Marx Washington Reporter cmarx@cutimes.com

xcept for Newt Gin-grich’s two mischarac-terizations, credit unions haven’t come up as an issue in this election campaign so far.

That doesn’t mean, however, that the folks at NCUA headquarters aren’t keenly interested in the outcome.

As well they should be.

For starters, the person elected president in November will have the opportunity to appoint two, possibly three, members to the NCUA board.

NCUA Chairman Debbie Matz’s term expires in 2015 and Board Member Michael Fryzel’s term ends next year. In addition, if Carla Decker (or someone else) isn’t confirmed this year to the board to succeed Gigi Hy-land, the man inaugurated as president next January will get to nominate all three board members.

Because Congress required that
the board have at least one member
from each party, there will be a two
to one partisan breakdown on the
board. We just don’t know which
party will have two seats and which
will have one.

Beyond the personnel shifts, as important as they are,
the election could dramatically shift the messages and
mandates that the agency receives from Capitol Hill.

stitutions to appeal their exam results to an administrative law judge and mandate that federal bank examiners provide greater documentation of their findings.

Lawmakers of both parties used the hearing to vent about what they see as the excesses and arrogance of regulators. Look for even more of those kinds of hearings, and the not-so-subtle message they send to the NCUA and other agencies, down the road.