Attorney Karen Saul says boards must make it "crystal clear" that a CEO succession plan is a top priority. In an interview with creditunionmagazine.com, Saul explains boards' succession planning responsibilities and best practices.
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Q. CUNA's 2010-2011 Complete Credit Union Staff Salary Survey Report shows 58% of CUs have a CEO succession plan, 16% plan to by year's end, but 25% don't have one at all. What are the consequences of not having a succession plan in place?
A. The consequences are myriad and not pretty. A credit union with a leadership vacuum cannot deliver products and services as effectively or efficiently as necessary in today's competitive market. Remaining key executives may leave if they perceive the credit union is losing direction or market share, or if they become embroiled in a poorly designed contest to fill the leadership void. Morale degrades when leadership falters.
Board members find themselves inundated with the responsibility of finding new leadership on an emergency basis (the word "volunteer" has a hollow ring at these times) and credit unions often make poor choices with long-term consequences under these pressures. Succession planning can offer a great opportunity to shape the future and foster leadership, so the lack of planning squanders this prospect.