NCUA and other financial regulators have been focusing on “concentration risk.” The following guidance comes from NCUA Letter to Credit Union 10-03. (Enclosure.)

“A risk concentration is any single exposure or group of exposures with the potential to produce losses large enough (relative to capital, total assets, or overall risk level) to threaten a financial institution’s health or ability to maintain its core operations.”

The guidance focuses on investments and products.  But what about people?  I’d bet you my last dollar that employee concentration risk can be just as dangerous.  Let me ask you a few questions.

• Do you overwork your talented people, because they’ll “get it done?”
• Have you ever uttered the following?  “If we lose (him or her), we’re in deep trouble.”
• Are there divisions within your credit union where a star player keeps saving the day?
• Do you expect more out of your talented employees while accepting less from others?

continue reading »