Download - Succession Planning: Developing an Internal Search Process (Credit Union Conference Presentation)

National Association of Federal Credit Unions l www.nafcu.org

Succession Planning:

The Internal Search

Presented by

Loretta P. Dodgen, Ed. D.

HCS Group

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• The transition from one CEO to another is a

critical moment in the life of the credit union.

• Succession planning for the CEO role is a key

responsibility for Boards.

• A properly designed and executed succession

plan is critical for a successful transition.

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Succession Planning


• Research-The success of an organization is

determined by the effectiveness of the leader.

• Increased scrutiny requires Boards to ensure

that important decisions are based upon

detailed, complete, and objective information.

• Failure to plan is a strategic risk.

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Succession Planning


Additional Benefits

• Framework for senior leadership

development aligned with strategic needs

• Ongoing analysis of the position needs

• Clarification of key expectations

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Succession Planning


"Would you tell me, please, which way I ought to go from here?" "That depends a good deal on where you want to get to," said the Cat. "I don’t much care where--" said Alice. "Then it doesn’t matter which way you go," said the Cat. "--so long as I get SOMEWHERE," Alice added as an explanation. "Oh, you’re sure to do that," said the Cat, "if you only walk long enough.“ (Alice's Adventures in Wonderland, Chapter 6)

http://www.alice-in-wonderland.net/books/1chpt6.html


Phase One: Planning for the Transition

• Outline the strategic direction for the credit

union over the next 5 to 10 years

• Identify the qualities, skills and experience

required for those leading the credit union in

order to attain the strategic vision

• Outline the Compensation Philosophy and

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Succession Planning


Phase One: Planning for the Transition

• Review the organizational structure to ensure

alignment with the strategic direction and

needs of the credit union

• Outline the Succession Process

• Roles and responsibilities

• Process for planned and unplanned exits

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Succession Planning


Best Succession Practices for Boards

• Board and CEO discussions on long-term

succession planning should begin 3 to 5 years

prior to the time a CEO transition is expected.

• The full board should be involved.

• Open and ongoing dialogue should occur

between the CEO and the Board on the topic of

succession planning, including a formal annual

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Succession Planning



• Board members should be given ongoing

opportunities to interact with internal candidates

in various settings.

• The succession should be staged but horse races

should be avoided.

• Developing internal candidates is generally

preferable to external recruitment.

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Succession Planning



• The outgoing CEO should exit immediately or

have a limited, clearly defined role.

• A comprehensive emergency CEO succession

plan should be in place at all times and reviewed

at least annually.

• Consider the political and emotional impact of

the transition. Oliver Wyman, NACD

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Succession Planning


Phase Two: The Search

• Conduct an internal and external scan

• Do you have qualified candidates within

the current staff?

• Is there a significant difference between

the internal talent and that available within

the external market?

• Is the credit union positioned to attract

external talent and retain internal talent?

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The Internal Search



• Outline a timeline that allows for a

comprehensive search and selection.

• Move as quickly as possible to minimize

disruption.

• Ensure that volunteers are able to commit to

the time.

• Determine if outside consultant will be used.

• Include triggers for external

search.

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The Internal Search



• Clearly communicate the process and criteria.

• Will you post and accept applications from

interested internal candidates?

• Will you approach qualified candidates and

invite them to participate?

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The Internal Search



• Treat all candidates graciously and fairly.

• Be consistent.

• Include an objective evaluation component.

• Avoid courtesy interviews.

• Maintain confidentiality.

• Compensate a successful internal candidate

as you would expect to compensate a

successful external candidate.

• Plan ahead. Insert Your

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The Internal Search


Succession Planning:

The Internal Search

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Questions?