Maximizing and ensuring member value and performance requires anongoing review of the depth of talent in your credit union as wellas the right complement of skills to lead effectively and navigatechanging strategies. As markets become more global and technologycontinues to play an even greater role in strategy, the criteriaestablished for both CEOs and succession planning candidatesemerges and changes over time.

These skill sets need to be linked to the strategic plan,performance reviews as well as the CEO and board dashboards. It'sthe role of the board to understand key strategic drivers of thecredit union one to two years, three to five years and five to 10years out.

Criteria will evolve from these drivers that will define therequired skills sets for the CEO, CEO succession candidates andboard member candidates as well. Criteria established also willassist in filtering out certain candidates that do not help toaffirm your chosen strategies. At the board level, it's importantto ask, “Am I bringing fresh thinking and do my skill sets matchwhat's needed for the credit union strategically?”

Having succession discussions on a regular basis takes courage.Not every CEO or board member will embrace this process. However,as a board member, it is critical to performing your duties as adirector. Ensuring that a process is in place that focuses on theCEO and succession candidates will enable you to have a personalsense of the leadership capacity of the credit union and how theteam is performing as well.

Succession planning is the responsibility of the entire boardand all members should participate. This puts increased emphasis onboard education, continuous learning and a passion and enthusiasmfor studying the latest emerging trends and how they will impactyour strategic plan and credit union as a whole.

To show you how sensitive this process actually is, on therecent January 19^th National Association of CorporateDirectors Succession Planning Webinar, only 52% of participants hada formal succession plan in place; 44% had no formal plan in placeand 5% didn't know. However, on a contingency basis, 74% said theyhad a plan in place if the CEO was unable to continue managing thecompany.

So it's the ongoing process of setting criteria and havingconversations with your CEO about their plans well in advance oftwo years before they usually begin to prepare for retirement. Thiswill provide opportunities for new candidates to learn, come up tospeed on the criteria that have been developed and to “let seedssprout.” If you, as a board, understand the CEO's thinking and howlong their trajectory will be, you will have a better sense on howto react to contingency planning as well.

Whereas the process of “leadership development” is rarely called“leadership succession”, there are leading practices in CEOsuccession planning, reviewed during the NACD Webinar, that can beextremely helpful to ensuring that this process is effective,including but not limited to: plan three to five years out; preparea comprehensive emergency succession plan; ensure full boardinvolvement; establish open and ongoing dialogue with annual reviewof CEO and succession candidates; develop and agree on selectioncriteria; use formal assessment processes; interact with internalcandidates; develop internal candidates rather than recruitexternally, and have an outgoing CEO leave or stay on as chair fora limited time only.

Due to the complexity of this issue, and the required interplaybetween the board and the CEO, the board must own this process.Significant dollars can be spent through Human Resources in thedevelopment of leadership capacity within the organization, but ifthe board never takes responsibility for this process by owning itand driving it, it will never happen effectively. This process mustbe linked to HR to ensure that the leadership legacy of the companyis developed. But the board must be in control and own thisprocess.

At least on an annual basis, the board should review asuccession planning in two ways: in a normal retirement scenario aswell as a contingency plan. In both cases, it's important to workwith the CEO to include them in their thinking in this process.

A key skill set for any CEO candidate is their willingness tocontinue to learn and adapt to new situations. Additionally, theyneed to have strong values and the ability to visualize the future– which is as for true board members as it is for the CEO.

Stuart R. Levine is chairman and CEO of Stuart Levine &Associates LLC, a strategy, leadership and governanceconsulting firm.