Many Reasons Why Association CEOs Get Fired

Each year when making predictions for the next 12 months, I usually include one that predicts the demise of a couple of league CEOs. Frankly, this is always a slam dunk prediction because not a year goes by when one or more league executives don’t bite the dust. Managing a trade association, any trade association not just one involving credit unions, is not a position for anyone looking for longterm job security. With some exceptions, the turnover rate is high. Yet, many observers don’t realize just how often association CEOs get fired. When an association board of directors decides that the time has come for the current CEO to step down, they never describe their action as firing the association CEO, even if for cause. Instead, they announce that the departing executive has chosen to take early retirement (at age 49?), has resigned (with no explanation given), has resigned for personal reasons (which raises all sorts of sinister speculation), has decided to relocate (like to the end of the unemployment line?), or has decided to pursue other opportunities (like looking for another job?). Another favorite is to announce that the board has decided not to renew the CEO’s contract. No further explanation is offered. Why is getting “let go” such an occupational hazard in the association management profession? For starters, working for a volunteer board whose members know little if anything about running a not-for-profit trade group is challenging. So is having thousands of dues paying members for bosses. These two reasons lead directly to one of the most common reasons association executives get the boot: politics. Successful association executives do everything possible to stay out of association politics. But they know to survive, they must thoroughly understand politics. They must also quickly learn how to work with the politicians. Also known as trying to please everyone. No easy task. Understandably, association CEOs get fired for cause. It happens and is not debatable. But they are also shown the door for not meeting set goals and objectives, for not achieving a black bottom line, for not achieving member satisfaction, for not growing the organization, because of personality conflicts, for failed products and services, and for unresolved priority differences. But they also get the pink slip through no fault of their own. Like having a weak chairperson who lets the board get out of control. Strong leaders work closely with their CEO and support them. They don’t let their CEO get caught between individual board members with conflicting agendas. They keep the board focused on setting policy and away from any attempt to micro manage the association. Some not-so-sweet partings occur early on because of misunderstandings regarding promises made to CEOs during the hiring process. An association executive who concurs with a board’s desire to “work out the final details” of the CEO’s employment agreement after the new CEO is already on the job, has in effect agreed to a tumultuous relationship sure to end badly for the CEO. Before a new CEO steps one foot into his or her corner office, they must agree on such important matters as annual salary, bonus plan, benefits, travel policies, memberships, lines of authority, automobile, etc. All these matters need to be spelled out in an employment agreement which the new CEO should have his or her personal attorney review. Otherwise, expect serious bones of contention leading to a dead end relationship. “I thought we agreed on a quarterly bonus based on XYZ?” “You said I could purchase a luxury car at credit union expense.” “So what if the meeting I always attend is in Hawaii this year?” “What do you mean the CU doesn’t pay for my wife’s expenses?” Other reasons association CEOs are given their walking papers include poor relationships with staff that result in sub par performance and high turnover; not keeping the board well informed, coming up with surprises once too often; salary ceiling disputes, being out of the office too much, or getting too many complaints from members. Eventually things deteriorate to the point where the board simply “loses confidence” in their CEO. On top of all this, there are also, unfortunately, situations where a hiring mistake was made and the chemistry between the board and the CEO just doesn’t mesh. Aggressive boards need to hire aggressive CEOs and vice versa. CEOs who find themselves as a square peg in a round hole should be able to see the handwriting on the wall and resign before they are asked to “resign.” Potential association CEOs also need to be aware of the track record an association has had with previous CEOs. If the association has had long-term CEOs and treated them well, that’s a big plus. If the opposite is true, potential CEOs need to go in with their eyes wide open. By way of example at the national association level, CUNA has always presented a CEO challenge. No CUNA CEO has ever quit; all have been fired. The average tenure of a CUNA CEO has been approximately seven years. In every instance, the departure has been positioned as a resignation. In reality, all were fired for one or more of the reasons described above. Current CEO Dan Mica will prove to be the exception to the rule. CUNA, like many other credit union and non-credit union associations tends to forget that it dumped its chief staff person, usually in a badly handled and unprofessional fashion. Why else years later would they honor their departed CEOs by naming a prestigious awards program after them? Guilty conscious? Although this column has been about reasons that association executives get fired, doesn’t it appear that the words “credit union” could be substituted for “association” throughout and make just as much sense? Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected]