At a recent credit union conference, I had the opportunity to talk to a couple of directors from a small credit union. I couldn't talk to the CEO — he had recently died, and the board was searching for a replacement.
It was also the third time in just a few years that the credit union found itself in this position — though the previous two executives didn't die, so this isn't the nefarious story of a deadly credit union job.
But the board was in a real quandary. The directors said they didn't have the resources to work with an executive search firm, so they had put some feelers out on their own, to no avail. They were getting ready to run an employment ad in the newspaper.
Having been through this process a couple of times fairly recently didn't make them feel comfortable with the process — it just left them feeling dismayed and disheartened.
The CU, which was originally founded to serve the employees of one of the top employers in their region had converted to a community charter some years ago.
The now-deceased CEO had tried to convince the board to change the credit union's name. The two directors told me the board — made up entirely of retirees from the original sponsor group — was adamantly against changing the name. That simply wouldn't fly with their members, they said, the majority of which were employees from the original sponsor.
One of the dirty little not-so-secrets about small credit unions is mergers frequently are caused by the loss of a CEO. This can happen for a number of reasons: an inability (or unwillingness) to pay what it would take to bring in a strong CEO, for example. In other cases, the board is just too overwhelmed by the process of finding a new chief executive.
It's not all that much easier for large credit unions, sometimes, either. As we uncovered in a series of stories about CEO turnover at CUs, just 8.44% of CUs saw a change in CEO during 2015. Compare that to 11.8% of public financial services companies and 16.6% of the 2,400 largest public companies.
As credit unions of all shapes and sizes head into strategic planning season, there are a few cautionary tales here, not the least of which is: don't allow assumptions about what your long-time members want prevent you from considering what might help bring in new members. But just as important: make succession planning — both for the board and management — a top priority.
Editor in Chief Lisa Freeman can be reached at
