When Prospective Partners Come Knocking

New White Paper Explores Obstacles to CU Merger Proposals

‘When Prospective Partners Come Knocking’

Although credit union executives and boards have a duty to consider members’ interests in all matters, other factors may take precedence when it comes to evaluating the merits of merger proposals, according to findings reported in a new white paper from the CEO Advisory Group.

“When Prospective Partners Come Knocking: Credit Union Board and Management Responsibilities to Consider Merger Proposals” explores how credit union boards and executives can objectively evaluate proposals to join forces with other financial cooperatives—and recognize the possible obstacles in fulfilling those duties.

According to a survey conducted by the CEO Advisory Group, 72 percent of credit union executives and board members said they would be somewhat likely to very likely to outright dismiss merger opportunities without giving those proposals due consideration.

The vast majority of survey respondents recognized the potential for strategic mergers to offer solutions to pressing challenges driven by technological transformation and changing consumer expectations, including the need to deliver an exceptional digital experience and the ability to offer a broader array of products and services.

At the same time, many executives and directors said their credit unions wouldn’t give serious consideration to merger proposals based on beliefs that their organizations are doing well enough financially to continue to serve members adequately and on concerns about executive and staff jobs and compensation post-merger.

The white paper explores how recent merger trends reflect the emphasis among successful credit unions to redefine their brands and revamp their operations to better serve members and maintain strong financial performance. Gone are the days when mergers were solely the option of last resort for struggling financial cooperatives. Today thriving credit unions, large and small, are partnering in strategic mergers to position themselves to better serve members and employees for the long run.

The publication offers recommendations to establish a framework for evaluating the merits of merger proposals in comparison to the credit union’s current and near-term prospects and offers a real-life case study demonstrating that approach in action.

“When Prospective Partners Come Knocking” is available online at no charge through the CEO Advisory Group.