MADISON, Wis. and FARMERS BRANCH, Texas (1/30/12)--January was a transition month for many credit unions, with announcements of CEO retirements popping up each week or new CEOs taking the helm. Succession plans for the credit unions have received a workout.
CEO retirements will trend upward as more baby boomers hit retirement age. As they retire, the people replacing them will have left key senior positions at other credit unions, which will trigger the implementation of succession plans at those credit unions.
Credit unions and their boards should be prepared for the transition while finding the right person for the critical job. Having a detailed succession plan is essential, according to Karen Houston-Johnson, vice president of Credit Union Resources' OnBalance.
Failing to plan for succession well in advance of an executive search can result in chaos, contribute to costly delays in organizational momentum and progress, and needlessly create uncertainty among members, volunteers, staff and other stakeholders in the credit union, Houston-Johnson told the Texas Credit Union League (LoneStar Leaguer
Effective boards understand that while CEO departures are often unexpected, turnover in executive leadership is inevitable, she said. "To lay the groundwork for a successful transition, boards should invest in the forethought and advance work of succession planning."
The planning works best when the board and incumbent CEO collaborate to create conditions for a successful transition--expected or not expected, said the article.
Houston-Johnson outlined the benefits of an effective succession plan. The plan should:
- Respond to emergencies by designating an executive or management team to run the credit union until the boar names an interim CEO;
- Provide a step-by-step list of short-term and long-term board tasks;
- Give the board an assessment of the strengths and weaknesses of senior executives;
- Guide the development of senior executives with an emphasis on preparing them to fill the CEO's position on either ran interim or permanent basis;
- Reflect the unique nature of every credit union's market and membership; and
- Reassure members and employees so the board can initiate quickly steps that ultimately will lead to naming a new CEO in a timely manner.
How important is this? Ask a credit union that underwent a CEO change this month. Here are 10 credit unions that announced a CEO transition in January. There are probably more. They include:
- Members 1st CU, Brattleboro, Vt.--CEO Judy Wisell officially handed the reins to successor Rick Chapin, former vice president of Chittenden bank, at year end and commemorated the exchange at its annual planning discussion Jan. 22 (Newslines Express Jan. 27).
- Greater Iowa CU, Ames, Iowa--The $280 million asset Greater Iowa CU hired Scott Zahnle, executive vice president at $850 million asset IH Mississippi Valley CU, Moline, Ill., to succeed David Carlson as president/CEO, effective Feb. 8.
- Guthrie FCU, Sayre, Pa.--John Savelli has been appointed president/CEO. He most recently was controller at United Health Services Hospital System and earlier was senior vice president/chief financial officer oat GHS FCU, Binghamton, N.Y. (Life is a Highway Jan. 10).
- Tobyhanna FCU, Scranton, Pa.--Sean Jelen, chief operating officer at Palisades FCU, Pearl River, N.Y., was named president/CEO at TobyFCU, succeeding James Kanaley, who retired Jan. 3 (Life is a Highway Jan. 10).
- Commonwealth CU, Frankfort, Ky.--Karen C. Harbin, executive vice president of the credit union, was named president/CEO, succeeding Gary Wallace (By The Way Newsletter Jan. 20).
- University of Michigan CU, Ann Arbor, Mich.--Tiffany Ford, executive vice president at Michigan State University FCU, East Lansing, was named president/CEO of University of Michigan CU (Michigan Monitor Jan. 16).
- Valley Bell CU, Elgin, Ill.--Jackie Hoonjan, previously with Workers' CU, Fitchburg, Mass., was appointed president/CEO of Valley Bell CU.
- Laclede Community CU, Alton, Ill.--Paul Smith, vice president of Laclede since 1993, was named president/CEO after the retirement of Janice Callies, who held the position since 1998.
- Shell Community CU, Wood River, Ill.--Gregory Lyons, vice president of member services at Shell Community, was appointed president/CEO, succeeding Kathy Swearingin, who retired.
- Market USA FCU, Laurel, Md.--Laura Hassan, executive vice president at Market USA since 1994, has been promoted to president/CEO, succeeding Robert McClosky, who retired Dec. 31.