By Donya Parrish, MCU VP- Risk Management
Looking into the future, it is likely there will be fewer credit unions. Larger, more complex credit unions are succeeding in several comparative metrics right now. Does that mean there is no longer a place for small credit unions? Not at all! But, there are some common reasons that small credit unions go away, and those may not be changing any time soon.
In his recent article, To Merge or Not to Merge, author Alan Bergstrom noted a reason for mergers that we don’t discuss much, even though it impacts credit unions of all sizes. “There are situations where the credit union’s Board of Directors has not changed much in composition over the years and becomes tired or “burned out” and lacks the ability to attract new, more passionate, and energetic directors to step in and oversee the credit union’s opportunities and operations.”
Knowing when it is time to attract new talent to your board is just as important as planning to replace your CEO. There is no magic timeframe for a board member to serve. Some volunteers are on a board for years and successfully keep moving the credit union forward. Others may join for the wrong reasons and never contribute. Taking a step back as a board for some introspection can be a positive for you and for the organization.
How do you start? One idea that Tim Harrington presented a few years ago — and I still love — is to “Take the time to map out what skills, demographics, and backgrounds you have. Then list out what skills and diversity you’d like to have. Use this as a road map for each director to recruit a candidate to be vetted.” Let me know if you are interested in other resources on the topic of board succession.