National Credit Union Administration (NCUA) has introduced a new mandate requiring credit unions to implement comprehensive succession planning processes for critical positions. Public comments are still being compiled with the due date for comments to be accepted of September 23rd, 2024.
While compliance with this mandate is essential, the true value of succession planning extends far beyond regulatory requirements. It’s a best practice that safeguards against disruptions in business operations, and with 73 million baby boomers expected to retire now and between 2030, the demand to have stable community credit unions avaiable roles will exacerbate.
Too often, credit unions find themselves scrambling to fill critical roles when an unexpected departure occurs, placing undue burdens on other executives and boards of directors to fill them quickly, risking the due diligence process in hiring the right individual.
At OneAccord, we recognize the importance of not just meeting NCUA expectations but also proactively securing your credit union’s future. We offer more than just a blueprint—we help you execute it. Our succession planning toolkit is designed to guide credit unions through the entire process, from development to planning to implementation, ensuring stability and continued success.
Understanding the NCUA Succession Planning Mandate
The NCUA’s revised proposal mandates that all credit unions establish succession plans that cover their board of directors, supervisory committees, and all other critical roles in their respective organizations. The proposed mandate emphasizes that succession plans should be consistent with the size and complexity of the credit union. Smaller institutions might adopt simpler plans addressing a few key leadership positions, whereas larger, more complex institutions would develop extensive plans for various critical roles.
The purpose of this rule is to promote the safe and sound operation of credit unions by ensuring a seamless transition of leadership. This initiative comes in response to findings that roughly one in four credit unions either lacked or had inadequate succession plans, highlighting the pressing need for regulatory action.
OneAccord’s Customized Succession Planning for Credit Unions
For credit unions, particularly smaller ones, the prospect of developing and maintaining a robust succession plan might seem daunting. However, this is where we come in. As a strategic planning firm with a deep understanding of the credit union landscape, we are uniquely positioned to assist in crafting tailored succession plans that not only comply with the NCUA mandate but also enhance the overall strategic framework of your organization.
Highlights and Considerations for Credit Unions in Succession Planning
- Customized Succession Planning: Every credit union has distinct characteristics, and it’s crucial to develop a succession plan tailored to each institution’s specific needs, size, and complexity. Whether the focus is on a few key leadership positions or a comprehensive strategy encompassing multiple roles, the plan should reflect the unique context of the credit union.
- Toolkits for Success: Effective succession planning goes beyond merely filling vacant positions; it’s about preparing for future growth. Credit unions should utilize comprehensive toolkits with detailed guides, best practices, and customizable templates. These resources enable a proactive and strategic approach to identifying and nurturing future leaders. Key components of OneAccord’s toolkit include:
- 1) Assist in identifying critical roles
- 2) Perform core competency gap analysis on each critical role
- 3) Creating standard and customized job descriptions
- 4) Provide a career mapping roadmap
- 5) Work with the senior leadership team on establishing KPIs and OKRs for dashboard tracking.
- Cultural fit assessment for the CU and the field of membership it serves
- Ongoing Review and Adjustment: Succession planning is an ongoing process, not a one-time event. Regular reviews and updates are essential to ensure the succession plan remains relevant and effective as the organization evolves. This continuous refinement helps the credit union stay prepared for leadership transitions
- We will partner with you to keep a pipeline of viable board and supervisory committee members. The hiring timeline and process are very different from the management team’s.
- Training and Development: A vital aspect of succession planning is preparing potential successors to step into leadership roles. This involves identifying future leaders and establishing internal training and development programs to enhance their skills and readiness. A well-prepared leadership pipeline ensures a smooth transition and sustained organizational success.
How OneAccord Guides Credit Unions Through Strategic Planning to Maximize Their Value
A well-crafted succession plan ensures continuity in leadership, minimizes disruptions during transitions, and helps maintain member confidence and trust. It also positions your credit union for long-term success by fostering a leadership development and readiness culture.
Please get in touch with us by filling out the form below so we can find a time to review your organizational structure. As Operators within the Credit Union space, we’ve been here before. Let’s co-create a succession plan based on today’s needs and market drivers.
Michael Kadel,
Managing Principal | Financial Institutions
1018 Market St. Kirkland, WA 98033
(415) 306-1513
