Washington State Division of CUs Emphasizes Importance of Succession Planning
OLYMPIA, Wash. - Any credit union in Washington State that doubted the importance the Division of Credit Unions places on succession planning only has to refer to a bulletin the DCU recently issued. Observing that "a large portion of our credit unions have management approaching retirement age in the near future," the DCU bulletin said boards of directors, with the assistance of credit union management, "need to be prepared to deal effectively with the areas of recruitment, succession planning and compensation. DCU expects that succession planning will be part of the credit union's strategic and disaster recovery plans." "The primary responsibility of boards of directors is to hire and retain professional management.A prudent disaster recovery plan will have, at a minimum, persons identified and trained to act as interim management to ensure the immediate continuity of the credit union," the bulletin stated. It continued to discuss the board's responsibility in succession planning and recruitment, including having "candid discussions with their key management and determine retirement plans," and it advised CU boards on the steps they should take depending if retirement is expected within more than five years or less. In addition, directors should discuss the progress of accomplishing the succession/recruitment plan as a routine agenda item at board meetings, it said. Among the related activities that should be discussed are: * review of salary surveys to determine what compensation credit unions of similar size and services pay their key people; * prepare an inventory of needed CEO knowledge, skills, and abilities to accomplish the credit union's mission and strategic plan: * determine if the credit union has a senior manager(s) qualified to move up to CEO and what training, if any, is needed over the next few years; * determine if working with an outside search firm for recruitment is the best approach for the credit union. The DCU also cautioned credit unions they should "expect that examiners will comment if they do not find adequate succession plans as part of the strategic and disaster plans of the credit union." It also intends to offer training in succession planning for credit union volunteers and management.