Succession Worries For Boards & CEOs
There's a new group of critics speaking up about the lack of fresh blood on credit union boards: the board members themselves.
"It seems that the only way to get off our board is to die," one director told The Credit Union Journal. "I've been on the board for 10 years, and I think I'm the newest director."
A director from another CU agreed, noting that at 45, she was the youngest member on her board and adding the observation, "there's a whole lot of white hair at this conference."
That conference was CUES' Annual Convention here, which is sub-themed, "Marketing & Technology for Credit Union Directors." But much of the discussion centered not on marketing or technology, but on succession planning for both the board and the CEOs who report to them.
Attendees with and without that white hair were alike in their concern for not only bringing new blood onto the board, but about addressing who will run the credit union when some of the not-much-younger CEOs retire.
"Our CEO has long been developing potential candidates to succeed him, but he also long since lost his trust in the board to keep quiet about whom he believes is the best candidate," lamented one director.
She explained that some years ago the CEO shared his thoughts on his successor, and one board member leaked that information. Since then, there's been turnover in senior management, and the potential heirs to the CEO's throne have changed. While the CEO continues grooming his senior executives for his position and has his thoughts about who should succeed him-he's not sharing that with the board.
"I understand his concern, but where does that leave us if he gets hit by a bus tomorrow," the board member commented. "I am suggesting he pick one person on the board to have these conversations with so that discretion doesn't get in the way of succession."
Such concerns about succession planning made the breakout session on executive compensation as a recruitment, retention and succession tool popular-but not all of the advice to be had was as universally popular as the session itself.
As Joe Tripalin and Gene Zumwalt of CUNA Mutual Group's Executive Benefits division discussed the importance of creating better compensation and benefits packages for CU CEOs, some directors voiced their discontent about having to take such care of CEOs who, in their opinion, should be able to take care of themselves.
"So, you're saying we should treat our CEO better than our tellers and everyone else? That's just not right," said one volunteer. "He already gets paid a whole lot more than they do; why shouldn't he have to save for his own retirement like everyone else? He's already in a better position to do it than our tellers are."
Even as Zumwalt responded to the comment by pointing out that the "gap" between what percentage of a person's salary is needed for retirement and how much the person can actually defer in the various 457 retirement plans is much higher for CEOs than most other employees, and that the CEO is the leader who will be the driving force behind the credit union's future, another director muttered, "I don't have a lot of sympathy for him. He should be able to make up for that gap with his own investments."