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Cultivate an Effective CEO Evaluation Process

Ask these questions to determine whether your CU boasts a well-rounded leader.

April 21, 2014
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Recently, I facilitated a meeting with two dozen credit union CEOs. They raised an issue that always seems to surface in these conversations: How can a board of directors most effectively evaluate a CEO?

As their dialogue progressed, two questions posed to each CEO began to crystallize a process:

These CEOs possess different strengths. They hail from diverse credit unions with a wide range of asset sizes.

But they gravitated toward similar measures to gauge effectiveness. I’ve boiled down these measures into six components, with the understanding that leadership binds them together.

CU Directors NewsletterEvaluate the following criteria and the accompanying questions, and consider adding these features to your credit union’s models for evaluating, developing, and rewarding your CEO:

1. Focus on the future. How is your CEO deliberately positioning your credit union for the future? What strategies has the CEO developed and implemented?

What patterns does your CEO notice in the broader environment, and how is your CEO acting on this to lead your credit union? Where is your CEO adding innovative products, services, and processes?

2. Stay connected to members. How does your CEO remain connected with your members? How does your credit union stack up against the competition? What benchmarks disclose your credit union’s status?

How loyal are your members? What lifetime value can you expect from your members? Is your credit union growing in revenue, profits, and loyalty?

3. Keep a steady focus on staff. What leadership pipeline and development system does your CEO have in place? How are employees engaged and growing in their jobs and career ambitions? How efficient is your credit union in using employees’ talents where they best fit?

4. Achieve and sustain business results. Which financial metrics offer evidence of success? Revenue growth? Profit margins? Asset quality? Capital ratios? Efficiency ratios? All of the above? Is your CEO reporting on and achieving the metrics of success you establish as a board of directors?

5. Develop community leadership. What is your CEO doing to support the communities you serve? How involved is your CEO in the community? How involved are employees in the community? Does your CEO have a leadership role in professional associations? How involved is your CEO in industry advocacy efforts?

6. Lead your own life, too. How often can your CEO really get away? Has your CEO developed a solid leadership team to take the reins in his or her absence? How is your CEO’s overall health as it affects leadership of your credit union?

Every credit union evaluates its CEO differently. But consider integrating some of these guidelines.

After all, it comes straight from the results-oriented people handling these jobs.

JEFF RENDEL is a certified speaking professional and president of Rising Above Enterprises.


This article initially appeared in Credit Union Directors Newsletter, which provides strategic insights for policy makers.

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