If your credit union will soon be on the lookout for a new CEO there are many decisions to be made before the actual search begins. This brief post outlines the most critical areas of discussion and decision-making.
There are many decisions to make before the search for a new CEO begins. Many of these decisions have to do with defining and discussing the forward-looking expectations for a new CEO, expectations that must respond to and/or incorporate the credit union’s current environment and culture issues. So what are the discussions in which the board should engage, and what decisions should it make? The following:
- Strategic Plan Validation – It is important to affirm whether the board has a clear and firm set of strategic expectations since any new CEO will need to meet these expectations. The board should discuss key elements of the credit union’s strategic plan, focusing in particular on validating long-term strategic expectations. Validated strategic expectations should be used when drafting the new CEO’s position description and search/recruiting advertising copy.
- Culture Designation – Culture is a critically important consideration when hiring a new CEO. Whether the culture is to be maintained or changed (an expectation certainly to be communicated to potential CEOs) is a decision requiring board consensus. The board should understand and/or define the credit union’s cultural identity, what within that identity is critical to success and cannot be changed by any incoming CEO, and what is acceptable and/or necessary to change.
- Job-Specific Responsibilities – CEO searches often communicate minimal, basic information such as technical job requirements (e.g., develop the strategic plan, work with the board) or formal experience requirements (e.g., master’s degree, prior CEO experience). Rarely do job responsibilities communicated to potential candidates truly reflect institutional-specific requirements tied to strategic direction and corporate culture. The board should discuss and identify, based on the outcome of the strategic plan and culture decisions, the unique combination of strategic and cultural job responsibilities required to lead the credit union. Of course the technical and experiential requirements common to any CEO’s job description should be defined as well, but in many cases these criteria are less important than the cultural and strategic criteria.
- Search Parameters and General Plan – Building on the strategic plan, culture, and job responsibility decisions, the board should identify the parameters framing the search pool, to include establishing clear expectations regarding the source of potential candidates for the CEO position. Credit union CEOs can, and have, come from many industries and even countries. The pool of potential candidates is indeed large, thought not all credit unions wish to venture outside of the credit union community in the search for a CEO. Making such decisions ahead of the actual search process helps focus the search itself at the onset, defining what is and is not acceptable in terms of candidate background and experience.
- Offer Parameters – A strong board/CEO relationship is established during the position negotiation process. Boards must negotiate in good faith, with negotiation parameters based on board consensus. Identifying these parameters after the search process is underway – or shortly before meeting with actual candidates – undermines the perception of good faith negotiation, not to mention renders the communication regarding the position to potential candidates less clear. To ensure that basic negotiation parameters are clearly understood and supported by the board, it should identify the preliminary parameters for salary, benefits, contract length, and other offer/contract provisions before the search begins (of course, the final contract governing offer parameters will obviously not be settled until the board and selected candidate actually meet to discuss expectations and needs).
Making informed decisions in these critical areas will improve the likelihood that a board will find a CEO suitable to the board and, perhaps more importantly, to the credit union’s member-owners. Without a foundation provided by clear decision-making in the areas referenced above, the credit union is left to rely on the judgement of compatibility made by whatever search resource is hired by the credit union to manage the formal search process. Far better for a board to choose a candidate based on its own expectation of candidate suitability than to delegate that responsibility to outsiders.
Glatt Consulting provides assistance to credit unions actively searching for new leadership, as well as assistance to credit unions seeking to develop a succession plan. Request a sample process proposal for a more detailed look into our approach to CEO succession and search.