Loading ...The Best ICUL Session: Succession Planning
As Darryl Keene and I sat having breakfast on the last day of the Illinois Credit Union League’s annual convention, we were somewhat reluctant to attend this morning’s session called the “ABCs of a New Board Director.” Having heard Mark Lynch on Saturday, we expected this session to address topics that weren’t a good fit for more experienced credit union directors. Before the session began, in fact, I darted into other rooms where different sessions were taking place to see what they had to offer. Realizing the others were a bit too tactical, I took my place in the back row of Lynch’s session—just in case I had to take an “urgent phone call.”
Boy was I glad that I stayed! Lynch’s presentation didn’t focus on how to be a new board member at all. He discussed strategies that boards should understand as they face the inevitable task of replacing directors who are retiring.
Directors Are Temporary, Boards Are Perpetual
One thing many people forget when they serve on any type of governing board is that each individual director (trustee, or whatever) is a temporary steward of that organization. The capital-B Board lives on indefinitely. As stewards of an organization, it is in the member’s best interest to insure that the next generation of trustees is qualified, experienced, and capable to lead.
Lynch makes two recommendations to lay the groundwork to achieve that goal.
Composition Policy
You have the choice of investing in one of two companies. Your decision means that you must invest every penny you have in the company you select. The only information you know about the company is this.
Company A has a governance model that requires an equal distribution of talent among the board. One director must be an account; another, an attorney; one from marketing; and so on. The age, gender, ethnicity, experience, background, and other skills must be balanced.
Company B has a governance model that gives no consideration to demographics. It requires only that each director understands and believes in the business, its principles and values. They are team players who ask the right questions.
Into which company would you invest every penny you own?
Every person in our session chose Company B. While diversity is laudable, it leads to ineffectiveness as those without experience defer to the “expert.” What happens if the accounting “expert” on your board, isn’t really an expert? Diversity comes in experience when, in my example, everyone knows enough accounting to make a good decision.
Lynch believes that an organization’s composition policy should develop an “Ideal Board Member” where candidates have the right skills, ask the right questions, and avoid categories.
Succession Policy
The Ideal Board isn’t something attained over night. It takes time because you don’t want a director to leave before he or she is ready to retire. But when a director leaves, your succession policy tells you what steps the board should take to secure a replacement.
- Large Boards (13 or 15 members, for example), may want to prune to 9 members. Their succession policy might simple state that there will be no replacements until there are 9 members on the board.
- Other boards could use sub-committees as training grounds for future directors. Such work allows the “Associate Director” to learn about the organization and how it works.
There are many other examples, and not one idea fits all organizations. Whatever your succession policy states, it must also include a recruitment plan even if you want to use committees as the proving ground. Recruiting for those committee positions, for example, takes on a very important role in your process.
What have you found to be the best way of recruiting?
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