Searching For New Leadership: How to Recruit the Next Generation of Credit Union Leaders
Michael Beall, Chief Experience Officer, CU Strategic Planning
Many credit union CEOs are nearing or planning their retirement. Having the right consultant on board before the transition begins is the best way to create a seamless transition between incoming and outgoing CEO leadership.
Leadership development and succession planning should be ongoing for internal candidates before your CEO or other key executives announce their retirement. In many instances, however, that’s not the case. Especially with smaller credit unions, finding the time to bring along future executives seems impossible. Then, the process of finding the right person can be stressful for the credit union boards, so having an experienced recruiting agency providing guidance can help the process go more smoothly.
Developing the Right Recruitment Philosophy
Our firm works with many Community Development Financial Institution-certified (CDFI) credit unions, and many of these credit unions focus on community relationships and the implementation of grant programs as part of their strategic structure. One of the biggest concerns I’ve seen from credit union boards, especially from boards of CDFI credit unions, is wanting to attain leadership who can continue the community and CDFI trajectory without missing a beat. Naturally, the credit union wants to keep moving forward, so establishing a structure for succession planning can help maintain that momentum.
To get the recruiting process started, it helps to have a professional, especially someone already familiar with your credit union. What some credit unions don’t like about the big search firms is they have to start a relationship from the beginning, so develop that relationship early and nurture it frequently. That way, your recruiter will better understand what a credit union is looking for in a candidate.
Finding the Right Candidates
Naturally, a credit union expects certain things out of a CEO. A savvy recruiter will create a search that revolves around the credit union’s needs and strive to capture what they are looking for. At the same time, we don’t want to limit the search to a select number of specifications. We want to attract a good mix of candidates with diverse backgrounds, experience, and qualities who can meet the credit union’s needs.
When it’s decision-making time for your search committee or board, it should be difficult! By difficult, I mean that a board should have a strong final group of candidates to choose from.
Developing the Offer and Building the Employment Contract
Credit union boards should have their consultant research to develop an agreed-upon salary range and benefits early in the process. To create this, the board and search firm should consider what peer credit unions in criteria such as asset size, number of branches, lending, region of the country and other financial institutions in their region are paying CEOs or other C-suite titles that you might be recruiting for. What are the compensation trends as far as bonuses? What benefits are others offering?
Credit union boards should also be prepared for “sticker shock” when it comes to compensation. The market has changed dramatically over the past ten years, possibly the last time the credit union was seeking a CEO, and it can be surprising when it comes to settling on a salary and benefits package.
While the search is in process, develop the contract the board will present to the final candidate. Recruiters should be able to contribute to facilitate these discussions as they hear things from all the candidates and others in the industry. Credit unions don’t want to discover a mismatch right at the end of the process based on criteria that might require finesse to come to terms with a candidate. For example, watch for a CEO commuting from another region. If that’s a deal breaker, establish that as a criterion with your search consultant from the beginning.
NCUA Is Planning for Your Credit Union’s Future
The NCUA recently issued a proposed rule on succession planning – out for comment until Sept. 23. Should it become regulation – and of course, the devil will be in the details – it could be helpful for credit unions to put some structure around the succession planning process. It’s a wise business decision, too!
Having these plans in place will make it easier when the time comes. Often, when a CEO leaves, other staff members who have worked closely as part of the team may plan to leave around the same time. It’s best to be prepared for these scenarios.
As for the variable compensation proposal from the NCUA, credit union leaders generally don’t go outside the norm when crafting compensation packages. However, credit union volunteers and executives should be cognizant of this going forward, as there is potential for things to get out of hand.
Credit union leaders have a lot on their plates when selecting and bringing in the next generation of credit union leaders. However, having the proper support through the process can help ensure your credit union can continue meeting its goals without starting over or losing momentum.
