Board Succession Planning: An Opportunity for Strategic Progress
May 24, 2023
4 minute read – The following blog post was written by c. myers and originally published by CUES on March 20. 2023.
Succession planning is like exercise. Everyone knows that they SHOULD do it and that it helps prevent future problems, but it can be hard to prioritize. NCUA is working to provide some motivation. If the proposed rule passes, it will require federal credit union boards of directors to establish and adhere to processes for succession planning for key positions. This includes members of the board itself. *
Regardless of regulation, board succession planning is incredibly important. At its worst, a lack of succession planning can result in onboarding a poor fit with their own agenda that causes disproportionate levels of chaos. (If you haven’t experienced this, take a moment to be thankful.) But at its best, good succession planning represents an opportunity to become the high-performing, strategic board you want to be.
That’s a strong statement, but setting a good foundation for succession not only results in recruiting board members that are a better fit, but it also establishes a path for board development.
Before jumping into creating job descriptions or recruitment strategies, there are some important steps you need to take to define the board you want to be. This essentially describes the board’s vision for itself:
- Desired characteristics and competencies of the board as a whole. This will (hopefully) include being strategic and could also include such descriptors as champions that represent the membership, positive influence in the community, collaborative, or diverse (be specific – generation, work and life experience, etc.). This should be a prioritized list of the key items.
- Desired characteristics and competencies of board members. Recognizing that not all board members need to exhibit all of the characteristics/competencies, this would include a prioritized list of the items that the board values as most essential for fulfilling the board’s vision of itself. Examples include strategic thinker, good communicator, comfortable with financials, connected in the community, willing to learn new things, or prior board experience.
- Desired dynamics of board interactions. These can take the form of working agreements that members agree to abide by, such as openly and respectfully speaking their minds, engaging in creative disagreement as part of reaching consensus, being prepared for board meetings, being engaged in discussions, or staying at the strategic level.
With these three elements, the board should have a solid vision of what it wants to be and is ready to take steps toward succession that align with this vision. For example, if the board desires to be diverse in terms of representing various generations, any gaps are apparent. The desired characteristics become a clear guide when it comes to recruiting and vetting candidates. And when creating the job descriptions and interviewing interested parties, the desired dynamics can provide clarity for potential candidates.
These foundational steps can set the board up for successful transformation into the board it wants to be, but they’re just the beginning. Recruitment is often a challenge, especially if it becomes clear that previous recruitment methods are not effective in building a board that supports its vision. New, more intentional recruitment methods can be put into place that will better support it. Onboarding and ongoing board development activities are also guided by the vision.
For boards who have defined their vision and established strong succession processes, the future of the credit union is on much more solid footing. Doing what you can to build a high-performing board is a big responsibility and a huge advantage for the organization. Take steps now so you can rest easy knowing that it’s going to be in good hands.
* officers of the board, management officials, executive committee members, supervisory committee members, and (where provided for in the bylaws) the members of the credit committee