A Direct Line Blog
A blog addressing issues and topics of interest for Montana credit union board members. Read a new post every week.
I recently read the article The Biggest Risk to Credit Union Long-term Viability by Tony Ferris. In it he wrote, “My worry is the prospect of a mass exodus of our directors which will leave us disconnected from our mission as credit unions.”
That got me thinking …What an interesting idea. Will directors really leave en masse as their CEO’s retire? How serious an issue would this really be?
According to an article in Credit Union Magazine from August 2011
If that article got it right, approximately 450 CEOs have retired since 2011. If you figure that the average board has seven members, that means about 3,150 diretors have seen the chief executive of their credit union retire in the last three years. How much board turnover did those retirements actually precipitate? It's hard to know. But, even if only a portion of those volunteers stepped down, that is still a significant number of people and a potential leadership gap in the industry.
Since early 2011, 13 Montana credit unions have had CEO transitions, and four more CEOs have already announced that they will retire in 2014. That is 28% of our credit unions. Unfortunately, we have not kept track of turnover at the board level; but, you can help us out. If you're on the board at one of our state's credit unions, please take our short survey. All Montana board members who complete the survey will be entered into a prize drawing**
We have many credit union board members in Montana who have been serving for 20 years or more -- in fact, at the 2013 Directors’ Conference two veteran volunteers proudly shared their more than 30 years of service. I know both of these board members stayed on the board through CEO transitions, but what will you do when the CEO you are comfortable with decides to retire?
It would be good for your board to discuss the risk to your credit union if over half the board leaves in the same year. Depending on your board composition, this may be a good thing. However, a high-functioning board would see a leadership gap. Think about the steps your board can take to prepare for board turnover. The Montana Credit Union Network Smart MOVES program was developed to help our credit unions through this potential problem by offering education, succession plan development, and online tracking system to stay on top of your board needs and recruitment process.
Don’t assume that all the volunteers will stay through a CEO transition. Begin you conversation at the next board meeting. Resources are provided below to assist your board in these discussions.
Tabitha Garvin is the VP-Fee Based Services for the Montana Credit Union Network. She would welcome any questions or comments on this material. You can email Tabitha or call her at 800-745-5546, ext. 132.
**Survey Prize Drawing: Three lucky volunteers will win one of the following three prizes: 1. A discount on a SmartMOVES training session (worth $200); 2. a half-price registration fee for the Directors'/CEO Forum (worth $100); or 3. a $25 VISA gift card. Credit union staff -- please encourage your board members to take the survey.