When designing and executing a CEO succession plan, credit union boards should understand they have several options of equal merit.
The correct path depends on a variety of factors, including the circumstances behind the transition, the relationship between the outgoing and incoming CEO, and the credit union’s health and viability.
Consider the experiences of three former CEOs as they transitioned out of leadership.
Frank Berrish helmed Visions Federal Credit Union for 38 years, guiding the credit union in Endicott, N.Y., from $24 million in assets to $3.2 billion. Berrish regularly recruited his top two senior staffers take over board meetings to familiarize the board with potential successors. Eventually, the board opted to pass over internal candidates and use a national recruiting firm to find his replacement.
According to Berrish, he spent all of two days debriefing his successor. “It was like the Navy—you bring a new captain aboard, and the old one leaves,” Berrish says. “I can’t say it was a bad plan.”
That said, Berrish did stay on as a consultant for six months, which he spent introducing his successor to friends and business contacts in the community, as well as representatives from large business accounts.
Larry Wilson recruited his eventual successor, Chuck Purvis, to Coastal Federal Credit Union 10 years prior to deciding to retire. Wilson gave a year’s notice of his plans to step down to the board at the $2.7 billion credit union. “They asked me for my recommendation of who should take my position,” Wilson says. “I said, ‘Chuck,’ and they said, ‘OK.’”
Coastal Federal formally announced the succession plan to staff and community six months in advance of Wilson’s retirement. As with Berrish’s case, one of Wilson’s key responsibilities in his waning months was to connect Purvis with his many connections in the business, community, and nonprofit world, to continue Coastal Federal’s tradition of community service and its status as the No. 1 mortgage lender in the Research Triangle area of North Carolina.
Patsy Van Ouwerkerk retired from Travis Credit Union in 2014 after 38 years in the industry, the last 12 as CEO of the $2.6 billion asset credit union in Vacaville, Calif.
She considered it part of her job to prepare and groom CEO candidates, so she provided reports to the board about her senior leadership team twice annually to familiarize them with the talents of those staff members.
Van Ouwerkerk provided Travis 18 months’ notice of her plans to retire, which she had put off until the credit union emerged from the financial crisis. Working with an outside consultant, she interviewed each board member and matched the candidates’ capabilities to their list of preferred skills and traits, discussing in which areas the candidates might need additional development.
Travis announced six months in advance of Ouwerkerk’s retirement that executive vice president Barry Nelson would succeed her. The credit union’s highly documented, six-month transition plan emphasized regular communication with staff and a collaborative approach to succession.
“We made a lot of ‘we’ decisions and ‘we’ announcements,” Van Ouwerkerk says. “It made for a smooth transition.”