“We want our new CEO to be exactly like our current CEO.”
Throughout my two decades advising credit unions on succession plans and governance, I’ve often heard that sentiment from boards.
Typically, they have long-term CEOs who plan to retire within the next two to three years.
My response: “Do you really?”
Don’t take that the wrong way. That’s not a judgment of the board or the current CEO, who has served in that role a long time for a reason.
But does your next CEO need the same skills as his or her predecessor?
Maybe. Or maybe not.
One of the board’s most important responsibilities is selecting the right leader for the credit union. So what does the “right” leader look like?
Define the credit union’s strategic direction: Where do you want to be in five years? Ten years?
After you create that picture, think about which skills and attributes your future CEO needs to achieve success in that role.
It’s natural to wonder whether the board has chosen the optimal path going forward, and whether the leadership characteristics the board identifies as valuable will actually produce the intended results.
The reality is, no “right” answer to these questions exists. Every credit union possesses a unique set of advantages, challenges, and opportunities.
The course your board takes should depend entirely on the needs and the goals of your organization.
Still, some characteristics have borne out as most central to a CEO’s performance. Some common performance-based traits of high-performing CEOs:
Personal characteristics that separate superb CEOs from the rest of the pack include highly intelligent, approachable, humorous, humble, flexible, well-respected, genuine, and confident.
Who should pick the skills and attributes you desire of your next CEO? The board. Not the current CEO, and not the credit union staff.
Some boards like to delegate this responsibility to the CEO. I’ve also heard of situations where the board has delegated recruiting the new CEO to the current CEO.
Neither approach is appropriate. The board must take full responsibility for envisioning, finding, and hiring the credit union’s new leader.
So what is the CEO’s role in all of this? Primarily, developing potential successors internally.
Every CEO should regularly ask the board which competencies and attributes they’ll value in a future CEO, identify legitimate candidates inside the organization, and craft development plans accordingly.
When should the board think about the characteristics of a high-performing CEO? Now.
It doesn’t matter whether your CEO will retire in two, five, 10, or 20 years. You must always prepare for the future.