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A Direct Line Blog

Small Credit Union Succession Planning

May 5, 2021 7:30 am

By Donya Parrish, MCU VP- Risk Management

It’s no secret that small credit unions depend heavily on their manager/CEO. The person in that role often wears multiple hats and is the face of the credit union to members. So, what do you do when that individual plans to retire? Hopefully your board has a plan in place long before that time; but the truth is, many credit unions do not. That can lead to decisions that may not be in the best interest of your membership.

In announcing their Board Succession Planning series in 2016, then director of the NCUA Office of Small Credit Union Initiatives Bill Meyers said it well when he noted that planning doesn’t start with the retirement announcement of a credit union executive and that “succession planning by a credit union board today will ensure that when it comes time to fill a leadership position tomorrow, the credit union’s members will be well served through the continuity of a credit union’s performance and culture.”

NCUA also discussed the importance of succession planning in their Truth in Mergers publication. The document encourages credit unions to “Develop a succession plan for executives and board members. Decide what happens when your CEO retires. Avoid letting the board and the CEO grow old together.”

Recognizing the importance of planning for the future of a credit union, the CUNA Small Credit Union Committee put together a Succession Planning Guide. In addition, you can also use the Checklist & Workbook companion piece to the guide. The good news is that “small” is defined as $100M or less for CUNA’s committee, so even if you don’t think of yourself as “small”, the guide and checklist might still be a valuable resource for you.

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