Two Key Issues for Boards: Succession Planning and Merger Considerations

by Teresa Freeborn, Guest Writer

Board succession planning is as important as executive succession planning, but often it’s simply not done because it’s not perceived to be urgent. Some board members seem to view their role as a lifetime appointment, but it’s a huge blunder to let that happen. In all areas, engaged board leaders are vital for holding management accountable, and in recent years we’ve seen this highlighted with regard to moral/ethical lapses of corporate boards, as well as diversity and inclusion—issues that we’re now seeing have very significant business ramifications.

As I talk about in my book, Suits and Skirts: Game On! The Battle for Corporate Power, and has been reported on exhaustively, diverse teams at the leadership level yields better business results, but diversity doesn’t happen without effort.

Certainly, an effective diversity strategy recognizes that you’re probably going to have to change your volunteer recruitment techniques. You can’t just keep pulling from the same sources. In fact, I think credit unions should require their HR people and recruitment committees to seek out and offer opportunities to qualified candidates who will bring balance to their teams. And some board members will have to step aside to make room for others in an effort to improve gender parity and diversity in the overall composition of a board. The efforts have to be deliberate, and the change isn’t going to come easily.

In terms of opening board members’ eyes to considering a merger, I was fortunate to partner with visionary board members, but that’s not as common as many of us would hope. Giving boards the benefit of the doubt, I’d say that people who lead credit unions generally care deeply about their nonprofit mission, and truly believe in the importance and value of the cooperative model of credit unions. That’s why I think that, for the most part, resistance to considering a merger springs from concern about losing those essential values. And that’s also why it’s so important to perform exhaustive due diligence to ensure there’s a good cultural fit between the credit unions.

When a credit union has been around for a long time, there’s also resistance to letting go of something that has been such a huge and important part of so many people’s lives. An extension of that is outdated thinking that some boards and management have about the notion of being “acquired.” Merging into another credit union is simply not perceived as “winning” by some, and we have to start changing those misperceptions because they’re very damaging to our movement.

In fact, a board’s moral and fiduciary duty to the members they represent requires them to face the world as it is—not how we might like it to be—and to make the bold, strategic decisions that are in the members’ best interests. Sometimes those are tough calls, but good leaders have to be able to make tough calls and do the exploratory work that needed to assure members that all the options have been explored, and this is indeed the best path forward.

Former President/CEO at Xceed Financial Credit Union | Website