Selecting a new CEO is the most important decision any credit union board of directors will ever make.
With the credit union's future on the line, professional recruiters who work with credit union boards across the country say it is crucial for volunteers to do the important groundwork that can help them improve their chances of attracting the right CEO.
Jackie Moes, managing partner of Cuhire in Edina, Minn., recommended the board first review the credit union's strategic plan.
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"When you are replacing a 20-year or 30-year CEO it's important for the board to understand the strategic direction and the initiatives of the credit union because members of the board may have a different idea of what they are," Moes said.
Reviewing the strategic plan can help directors shape a consensus on what type of leader they will need to grow the credit union.
"Alignment on the front end to make sure that the entire board is on the same page as far as the type of leader the board is looking for really helps create a smoother search," A.J. Noll, vice president of Cuhire, said. "Without that, the recruiting firm can spin its wheels by bringing in candidates with various backgrounds that some board members may like and other board members may not like, and you end up getting nowhere."
Figuring out the right type of CEO means board members will need to invest the time to candidly and openly discuss and prioritize the qualifications, skills and experience that they expect the new CEO to have.
Making sure the prospective CEO fits into the culture of the credit union may be the most important factor to determine for the board because not getting the right culture fit can lead to high employee turnover and other problems, according to Cuhire.
What's more, for boards that have not been in the market for a new CEO for the last 10 or 20 years, it will help them to research current compensation trends for credit union CEOs in their specific markets.
"I think it is important for the board to realize that compensation packages have changed drastically," David Hilton, president of D. Hilton Associates in The Woodlands, Texas, said. "The base salary is the third wheel of the total compensation package; it's not the first wheel any longer."
Today's CEO candidates want more variable pay and incentives based on their performance.
"They want to be able to prove that they can do the job well but they also want to be paid for that," he explained. "If they improve the credit union's ROAA or lower the credit union's delinquency rates, they expect to be paid for that performance through various incentives."
CEOs also are more interested in retention compensation features such as a supplemental executive retirement plans.
Read more on how credit union boards can improve their search for a new CEO in the July 6, 2016 print edition of Credit Union Times.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
