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Filene Report What boards should do in mergers
MADISON, Wis. (11/30/07)--Credit union boards of directors need to be proactively involved in a credit union merger or acquisition process, according to the Filene Research Institute. One-quarter of credit union boards reported proactive involvement during merger processes. The same number reported “minimal” engagement, says a study, “The Board’s Role in Credit Union Mergers,” by William A. Brown, PhD and associate professor at Texas A&M University. Two-thirds of board interviewed failed to incorporate merger and acquisition scenarios in their strategic planning, says the study. Regardless of how involved a credit union is, Brown said that its board must:
* Evaluate the potential of membership growth; * Discuss how the merger would affect growth; * Identify issues that could make or break the opportunity; * Be clear on members’ interests and solicit input from them; * Develop a succession plan for the CEO; and * Seek multiple potential partners and consider issues such as culture or synergies the two organizations would have.
Statistics suggest that it’s not a matter of whether a credit union is involved with a merger, but simply when, according to Filene.
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