Every credit union will have to survive the succession of the CEO. The reasons for this succession can be planned or unplanned. If the succession turns out to be unplanned, there has been a vital miss in the Board’s responsibilities. This article will address what needs to be done for the Board to realize a successful CEO succession.

Having been a key executive in a succession resulting from the CEO dying suddenly from an aneurysm, I know firsthand how disruptive a CEO succession can be. There was no succession plan in this case, and the Board had not done its homework to maintain a malleable list of attributes they wanted from their CEO. Selecting a new CEO for a credit union is a crucial decision that can significantly impact the institution’s success and sustainability.

I have seen many CEO placement failures. Often, these hiring mistakes resulted from the selection committee not having a clear vision of what the credit union needs as its next CEO. The board of directors plays a pivotal role in this process, as they are responsible for identifying a candidate with the necessary skills, experience, and values to lead the credit union effectively. In this article, we will explore the key considerations that the board should keep in mind when seeking a new CEO for a credit union:

Industry Experience – One of the primary factors the board should consider when selecting a new CEO is their experience in the financial services industry, particularly within credit unions. Understanding the unique challenges and opportunities in the credit union sector is vital for effective leadership. A candidate with a strong background in credit unions is more likely to navigate regulatory environments, manage risk, and implement strategies tailored to the cooperative nature of credit unions. One of the first and foremost considerations for the board is the candidate’s knowledge and experience in the financial industry, specifically within the credit union sector. An ideal CEO should deeply understand credit union operations, compliance issues, and the unique challenges and opportunities associated with serving members within a cooperative structure.

Strategic Vision and Alignment – The first thing the board needs to agree on in identifying a successor is whether they want things to continue or believe there are more innovative or engaging ways of strategically running the credit union. If they decide the current course is “good enough,” they seek a lead to continue what the current CEO was doing. Do they desire consistency and continuity or need a change agent? If they believe there are opportunities greater than what the credit union is realizing today, they need to revise the attributes of the successor. Regardless of whether they want to “just continue on” or seek change, a successful CEO should possess a clear and forward-thinking strategic vision for the credit union. Here are the questions the selection committee should consider:

• Can the candidate assess and anticipate industry trends, capitalize on opportunities, and navigate potential challenges?
• Is the CEO candidate capable of aligning the credit union’s goals with the evolving needs of its members and community to ensure long-term success and relevance in a dynamic financial landscape?
• Can the candidate articulate a clear vision for the credit union’s future, develop a strategic plan, and orchestrate an operational plan to achieve organizational goals?
• Is the candidate forward-thinking, able to anticipate industry trends, and adapt the credit union’s strategy accordingly?
• Does the candidate have a clear strategic vision for the credit union’s success?
• Can the candidate inspire and motivate the team, lead with their core values, foster a positive organizational culture, and effectively communicate and implement a strategic vision that aligns with the credit union’s mission and goals?

Member-Centric Focus – A unique differentiator of credit unions is member-owned cooperatives versus shareholder-driven financial institutions. As a result, the CEO candidate should have a deep commitment to serving the members’ best interests. Knowing this unique place credit unions fit into the financial landscape, the board should seek a candidate who understands this. Here are some questions the board needs to consider:

• Is member satisfaction a primary driver for the candidate?
• Is the focus of the candidate on the financial well-being of the member?
• Does the candidate value the ways the credit union can impact the community?
• Does the candidate have a vision to develop and implement initiatives that enhance the member experience and strengthen the credit union’s relationship with its community?
• Has the candidate demonstrated a history of implementing member-centric initiatives and innovations to meet the evolving needs of the membership?
• Does the candidate understand the unique value a credit union brings to the membership and community as a cooperative financial institution?

Leadership and Management Skill – Effective leadership is crucial for the success of any organization, and credit unions are no exception. The critical qualities to look for in a leader are:

1. Possesses a high EQ.
2. Excellent communicator.
3. Transparent.
4. Trustworthy.
5. Able to lead with intentions versus tasks.
6. Vulnerability.
7. Able to build a culture of accountability.

The board should look for a CEO with strong leadership and management skills. Here are some questions the selection committee should consider:

Does the candidate have the ability to inspire and motivate staff?

• Does the candidate have a history of fostering a collaborative work environment?
• Does the candidate take into consideration the input from others and empirical evidence to make informed and timely decisions?
• Can the candidate demonstrate a track record of successfully leading teams through change and innovation?
• Has the candidate demonstrated experience in communicating effectively with both staff and externally with members, regulators, and stakeholders?
• Does the candidate possess the strong leadership qualities identified above?

Financial Acumen – The credit union already has a CFO, so the selection committee needs to be careful not to put too much weight on this skill. But, the candidate must have enough financial acumen to be a check and balance with the supervisory committee, board, and the CFO. Here are the questions the selection committee should consider learning from the candidate:

• Does the candidate understand financial management principles, risk mitigation, and how the vital and historical ratios affect sustainable growth?
• Is the candidate adept at overseeing the management of the credit union’s assets, optimizing its financial performance, and ensuring compliance with regulatory standards?
• Does the candidate have a proven track record of effective financial stewardship and strategic decision-making?
• Does the candidate have the ability to navigate complex financial landscapes, make sound investment decisions, and manage risk effectively is crucial?
• Can the candidate collaborate with the CFO to monitor prudent financial management in the credit union’s income statement and balance sheet?

Innovative Thinking – Credit unions are in an era of rapid technological advancements and changing consumer expectations; to embrace innovation and stay competitive and relevant, the CEO must be savvy and up-to-date with the changing technology landscape. Since tech and FinTech are innovation drivers, the board should seek a technologically savvy CEO capable of leveraging emerging technologies to enhance operational efficiency, member services, and overall competitiveness in the market.

To identify the innovation abilities of the candidate, the selection committee should consider the following questions:

• Can the candidate demonstrate an awareness of the technological trends in the industry?
• Can the candidate leverage innovation to enhance member services, streamline operations, and maintain the credit union’s relevance in the market?
• Can the candidate demonstrate they are adaptable and capable of leading the credit union through technological advancements, regulatory shifts, and economic fluctuations?
• Has the candidate demonstrated a history of fostering innovation and implementing new technologies to enhance operational efficiency?
• Is the candidate capable of leading through constant change, whether it be regulatory updates, technological advancements, or shifts in consumer behavior?
• Does the candidate have a proven ability to lead and manage change, ensuring the credit union remains agile and adaptive to evolving circumstances?

Ethics and Integrity – Maintaining member, staff, Board, and community trust is paramount for a sustainable and successful credit union. The board should prioritize candidates with high ethical standards, integrity, and transparency. Here are some questions to consider:

• Does the candidate have a history of upholding ethical conduct?
• Will the candidate contribute to building and maintaining a positive reputation for the credit union within the community?
• How has the candidate demonstrated integrity and ethical conduct in their prior positions?
• Can the candidate demonstrate the ability to use their core values in leadership and decision-making?

Community Engagement – Credit unions play a vital role in the communities they serve. A CEO must be actively engaged in community outreach and development initiatives. The selection committee should consider these questions to evaluate the candidate’s ability to connect with the communities the credit union serves:

• Does the candidate commit to social responsibility?
• Can the candidate demonstrate their ability to strengthen the credit union’s ties with the local community?
• Does the candidate demonstrate an ability to seek and deliver on local partnerships?

Regulatory Compliance and Governance – Compliance with regulatory requirements is paramount in the financial industry. The board should prioritize candidates with a strong understanding of regulatory frameworks and a proven track record of maintaining high governance standards. Here are some questions to consider:

• Does the candidate have a history of demonstrating the value of transparency?
• How does the candidate set expectations for themselves and report for accountability?
• Does the candidate have a thought process to balance compliance and risk?
• How does the candidate plan to navigate the complex regulatory landscape successfully?
• Does the candidate have a background in navigating regulatory requirements and ensuring compliance while managing risk effectively?

Selecting a CEO is a multifaceted process requiring financial expertise, leadership qualities, and a commitment to the credit union’s mission and values. By carefully considering these key attributes, the Board can identify a CEO who will guide the credit union to sustainable growth, foster member satisfaction, and navigate the complexities of the ever-changing financial landscape. Through this intentional selection process, the Board can place the next CEO with minimum disruption to the staff and the financial statement. The ideal choice will be a CEO who uses the present successes as a launching pad for the credit union’s future.