Having a comprehensive succession plan can help credit unions achieve their goals, mitigate leadership transition risk, maintain cultural continuity and instill confidence in the organization.
Recognizing the many and significant benefits of succession planning, the National Credit Union Administration approved a proposed rule in January 2022 that would require boards of federal credit unions to “establish and adhere to processes for succession planning” for “officers of the board, management officials, executive committee members, supervisory committee members and (where provided for in the bylaws) the members of the credit committee to provide continuity of operations. … In addition, the proposed rule would require directors to be knowledgeable about the FCU’s succession plan.”
“This rule is intended to help ensure the continuity of vital credit union leadership,” says Jennie Boden, president/CEO of Quantum Governance L3C, Henniker, New Hampshire. “Central to the ruling is that there is a road map in place to address critical gaps in leadership and that directors, committee members and executives are all knowledgeable about, and can act on, that road map when the need arises.
“While the … rule only applies to FCUs,” Boden continues, “we understand that the board hopes to encourage and strengthen succession planning for all credit unions. This is a standard that we wholeheartedly support.
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