By Richard C. Powers, MBA, LLB
Practicing good governance is key to protecting your credit union. It’s difficult to identify just one practice that is most important, but as an example of how important effective governance is, let’s look at CEO succession.
Credit union boards have a responsibility to take a proactive approach and consider succession in advance. I have led groups of credit union executives and directors to help them take an in-depth look at the issue of CEO succession. We work together to find ways boards can prepare and strategize for this crucial change, and how they can manage a process that is both legitimate and fair to all the stakeholders involved. Planning for succession allows boards to anticipate any CEO change, from planned events such as retirement to unexpected events such as an illness. CEO succession can be a long and time-consuming process, so a planned, smooth transition at the top eases the stress on everyone involved.
Participants come away from these sessions bursting with ideas for change. The first thing I caution them to do—and this is good advice in general—is to not introduce every new idea at one board meeting. Anytime you attend an intensive educational session with the goal of gaining new ideas, you will return to your credit union as an “expert” in that area, and your board will look to you to share how you foresee implementing these ideas. However, presenting all of the issues, processes, and resources needed, can be overwhelming and could backfire. First, bring your ideas to your board chair to discuss. Then, with your board chair’s support, you will have an easier time laying out your initiatives and explaining your solutions to the rest of the board.
Change is inevitable in most organizations, and it often comes down to a timeline—not whether change will occur, but when. There is no magic formula for every situation executives and directors may face in the governance of their credit union, but the opportunity to learn from experts in the field, as well as your peers, increases the chance that changes to your board’s structure and decision-making processes will be met with acceptance and success.
Richard C. Powers, MBA, LLB, is the National Academic Director, Directors Education Program & Governance Essentials Program, Joseph L. Rotman School of Management, University of Toronto, Toronto.
Learn more from Powers by attending CUES Governance Leadership Institute, June 2-5, at the Joseph L. Rotman School of Management, University of Toronto.
