"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.

"It really starts with a lot of soul searching about what the credit union needs and what the credit union wants to be," NAFCU EVP/COO Anthony Demagone explained. "If they could design a CEO from scratch, what would be the attributes they would be looking for? Are they looking for somebody who executes thing flawlessly or somebody who's a big ideas person? And what is more important for the credit union's success? Each credit union is going to have a different answer to these questions because each credit union has a different culture."

Charles Shanley, EVP for the executive search group at JMFA in Houston, said it's also important to get input from all of the board members, which can help prevent conflicts down the road.

"There are some board members who are more outspoken and the more reserved, and quiet board members may not express what they are really looking for in the new CEO," Shanley said. "So we send a confidential survey to every board member, so that all of them can tell us what they really want. This also helps us know what the board truly wants."

To allow board members to speak freely at meetings, D. Hilton Associates President David Hilton recommended that the retiring CEO be excluded from the board discussions about the new CEO.

"I know this sounds negative, but if I was on the board of directors of a credit union doing a search and if I had a long-term CEO, I would not have that CEO as part of search committee," Hilton said. "It leads itself to not being able to be as open and as honest about what you want in your next CEO. One of the first questions a recruiter will ask is do you want to stay the course or do you want change. Again, when you have the longtime CEO sitting there, it's hard to say we want change."

When board members discuss the type of CEO they are looking for, it's pretty common for them to gravitate toward individuals who have strong experience and success in the credit union industry.

Shanley suggested that boards consider interviewing CEO candidates from outside the industry.

"If you are looking for someone with a strong creative side and creative ideas, you often have to go outside the industry for that," he said. "It's a tough sell to the board of directors, but I would say that it is starting to become much more acceptable these days to go in that direction."

Earlier this year, for example, the board for the newly formed Heartland Credit Union Association hired Brad Douglas, who served on the board of directors for 10 years at the $2.2 billion CommunityAmerica Credit Union in Lenexa, Kan., but had no executive credit union experience.

According to Shanley, there are qualified candidates in the market who have strong financial and regulatory backgrounds combined with creative skills and abilities, but it takes a lot of work to find them and they are typically not looking for a new executive position.

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.

But how can a board be reasonably assured the CEO candidate is the right culture fit?

Although it is controversial, some recruiters suggested the board require CEO candidates to undergo a personality profile test.

"The problem with interviewing candidates is that some of them can really be good at the interview and can have the right answers regardless of whether it is actually a genuine answer," Shanley explained. "The personality profile test essentially confirms who the candidates say they are. You can't lie on this test. It helps answer a lot of questions about what kind of leader they are, how do they mentor and develop people or whether they are a good cultural fit for the credit union."

However, the Wall Street Journal reported that even though the use of employer personality tests has surged over the last decade, there has been a growing scrutiny of their effectiveness and fairness. Some companies have reduced, modified or eliminated use of personality profile tests in part because of possible discriminatory issues, according to the newspaper report.

Mike Juratovic, president/CEO of O'Rourke & Associates in San Francisco, said his firm also uses personality profile testing.

"I think personality profile testing is important as long as it is weighted appropriately in the context of the candidate's experience, past performance, industry reputation and all of that good stuff," Juratovic said.

For boards that have not been in the market for a new CEO for the last 10 or 20 years, it may 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," Hilton 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.

Developing a strong compensation package can help the board attract a talented CEO. But to accomplish that, boards will need to hire a third party that can help them see what is happening in the market, what the competition is doing and what are the compensation package options that the credit union can afford to offer.