Featured Content Don’t Let Your Credit Union FlatlineBy Jay Petty, EVP, The Sheeter Group With the aging of the baby boomers, we are seeing a tidal wave of credit union CEO retirements.Despite seeing great progress in the credit union movement, we find that many boards of directors are unprepared and have not planned adequately for a CEO’s pending retirement. Some boards will wait until the day comes and then go into reactive mode.Progressive credit unions address these transitions years in advance. It involves a comprehensive succession/leadership continuity plan. While many credit unions have an existing succession plan, these tend to be reactive in nature: In case of emergency, break the glass. A proactive leadership succession continuity plan involves a regular assessment of a credit union’s internal talent with a keen eye on identifying existing executives that demonstrate the interest and characteristics to become the next CEO. The impact of getting caught with your pants downThe absence of an effective and engaged CEO can result in strategic drift or flatlining. ‘We should wait until we get the new CEO on board,’ then ‘We need to wait until the new CEO gets acclimated,’ are common board responses when important strategic issues are addressed during a CEO succession.This scenario creates credit unions that strategically flatline for a period of years. Yes, the branches stay open and the phones get answered, but the strategic initiatives that are important to a credit union’s ongoing relevance will be put on hold. This can have a dramatic impact on implementing key strategic projects that are important to your members.The CEO search processWhile many credit unions find it necessary to recruit a new CEO from outside, or, at the very least look at outside candidates from a due diligence perspective, risks and issues are associated with this process. The process can be very time consuming and expensive.Some of the activities and expenses the board will face are:Name a board CEO search committeeInterview/vet executive search firmsSelect Search firm – absorb associated expenseReview candidates’ written responsesTelephone interviews of candidatesFace-to-face interviews with candidates – absorb associated expenseSelect candidateRelocate candidate if necessary – absorb associated expenseAccept a new CEO introductory period of 6 to 12 monthsMany boards have successfully undertaken this process. However, in cases where a board has gone through this process and the new CEO does not work out, it means it is time to start the process anew. This can cause considerable angst for the board and lead to years of strategic drift for the credit union.The absence of an effective and engaged CEO can result in strategic drift or flatlining. A progressive leadership continuity planA true leadership continuity plan will first involve identifying internal candidates that have the experience and attributes that are necessary to become a successful CEO. Once those candidates are identified, a comprehensive development plan can be implemented to assess and address the candidates’ strengths and weaknesses. This development plan can include outside education, such as completing the CUES CEO institute or CUNA Management School and can address other issues such as encouraging community involvement and outside activities like the Chamber of Commerce or specific educational tasks. Many credit unions will rotate responsibilities of key executives, giving potential CEO candidates valuable experience in the multiple disciplines needed, such as accounting and finance, marketing, human resources, information technology, lending and operations. Some credit unions find that they do not have any internal candidates for consideration or interested in the CEO position. In these cases, a credit union may have to make room for an outside hire. Addressing this issue years in advance will give a new hire time to acclimate to the credit union prior to the CEO’s retirement.Further, many credit unions choose to protect their investment by implementing executive benefit and supplemental executive retirement plans with a focus on retention of key succession candidates and enabling the existing CEO to retire comfortably at the right time for the organization.This may seem a daunting task for a board to handle on its own, so hiring a reputable outside firm can prove to be a wise investment to guide your leadership development plan and create a customized executive benefit strategy. A comprehensive plan like this can take years to implement. Regular discussions and updates should be part of a board strategic planning process. Not just for credit unions with near term CEO retirementsAlthough the pressing need is for a credit union that has a CEO nearing retirement, many progressive credit unions are choosing to implement this process regardless of where their current CEO stands in their career lifecycle. This enables credit unions to be prepared for CEO vacancies that occur for a number of reasons, including voluntary departures for another CEO position, health or family-related departures, and even the unfortunate cases of employment terminations. As we begin a new year, it is wise for all boards to ask themselves whether they have adequately addressed leadership continuity within their credit unions. CRN202601-3774829________________________________ THE SHEETER GROUP AND THE TARJOMAN RELIEF MISSION Tarjamon Relief's Gonzalo Lassally and Will Felder, who served together in Afghanistan in the mid-2000s, -- along with The Sheeter Group’s CEO, Andy Sheeter – share how they have helped many Afghan interpreters and their families escape the country to a neighboring country and then wait for passage to the United States. This interview goes into depth on how these Afghan interpreters risked their lives to help the U.S. Military and how The Sheeter Group’s contribution to the Tarjoman Relief mission has helped these same brave people in return.