Q. What are the board's roles and responsibilities when it comes to succession planning?
A. The board has the "general direction and control of the affairs of the credit union" under the Federal Credit Union Act (see 12 U.S.C. Section 1761b). State acts have similar provisions. The board is charged with doing "all things necessary and proper to carry out the purposes and powers" of the credit union. This includes hiring and overseeing the CEO and setting policies to ensure smooth operations even during management transition.
Succession planning requires collaboration between the board and the paid management team. It also requires strategic planning and forecasting so that management needs are anticipated, leaders are groomed and mentored, and the right tools are in place to encourage the retention and attraction of talent (e.g., employment contracts, deferred compensation plans, etc.). The board must make it crystal clear that succession planning is a high priority item and ensure it happens.