Welcome to the Webinar - CUES · The New CEO was not what we expected 2. ... that in the event of a downturn, the CU will not only survive but thrive. • Positively impacting our

The session will begin at the top of the hour.

Listen to today’s webinar using your computer speakers/headphones

or dial-in on your phone.

You are currently muted. You are welcome to use the chat feature if

you have questions or comments throughout the webinar.

A copy of the slides are available to download in the Session Files

pod.

An Essential Board ResponsibilityRecruiting and Retaining Successful Leadership

Presented by Christopher Jones, OM Financial Group

Welcome to the Webinar

An Essential Board Responsibility

Recruiting and Retaining Successful Leadership

C H R I S T O P H E R J O N E S , C F P, C L U , C H F C

O M F I N A N C I A L G R O U P

OUR MISSION

“To equip credit unions to make fully

informed decisions when considering

and implementing executive reward and

retention programs”

What would your reaction be if your CEO came in tomorrow and said, “I have some bad news, I have this great offer that I have accepted from another

credit union and I just can’t pass this up”?

You don’t have to answer this out loud!

Has this ever happened to you?

1. The New CEO was not what we expected

2. The Interim CEO took advantage of their position for personal gain

3. The New CEO didn’t share their true intent with the board about total time

4. Personality changes after getting the position

5. Information came to light afterwards that would have changed our decision

Other Stories Have We Heard About Leadership Transitions Gone Bad

What is the consequence to the Credit Union of these situations?

Essential Board Responsibilities Advise & Advocate

1. Define the organization’s mission & purpose

2. Choose and evaluate the CEO & set compensation (Including Succession Planning)

3. With the CEO, support the strategy going forward

4. Perform effective planning

5. Maintain proper fiscal oversight

6. Develop new board members

7. Ensure legal and ethical integrity

8. Enhance the organizations public standing

What is the Impact of a Successful Leader?

• Culture – “No Drama”

• Attracting, mentoring and developing the next generation of leaders

• Employee retention

• Navigate through challenges – ie. Foresight to position the organization so

that in the event of a downturn, the CU will not only survive but thrive.

• Positively impacting our community

• Stewardship of the members money – fiscal responsibility

• Growth of the organization

• Serving the members is the primary goal

What Makes Someone a“Key” Executive?

• Knowledge

• Institutional memory

• Skills

i.e. Unique skillset in business lending

• Relationships (community, members, etc.)

i.e. Knows every car dealership owner in the area

• They like “the Challenge” to grow constantly

• #1 ability to impact the financial success of the credit union

How Do You Measure Success?Key Performance Indicators

• Turnover

• Financial condition

• Profitability

• Member satisfaction

• Growth of membership, assets, etc.

• Community involvement

• Serving the community and understanding “your” the

credit union’s impact.

• Financial

• Morale

• Does it put your CU at risk or set you back?

• Who might have to jump in to make up the shortfall?

• Did relationships walk out with the executive?

• What institutional knowledge or memory left with them?

• Reputation risk in the community

What Is or Could Be The Impact toYour Credit Union if You Lose a

Key/Essential Executive?

Can you think of 1 or 2 key people in your credit union that would be

difficult to replace?

Who Are Your CU’s “Key” or “Essential” People?

Run The Fire Drill !!

Run The Fire Drill !

Morale/Culture

Benefits

Voluntary programs

Bonus/LTIPs

Golden handcuffs

Career growth/progression

Challenge in the role

What Can You Do to Keep Your Leadership? What Can You Do to Make

Your Credit Union Their Career?

Board’s Impact On Culture

Benefits

Benefits

When You Really Want to Ensure an Employee Stays With You!

Golden Handcuff(Non-Qualified Deferred Comp)

vs

Bonus(Long Term Incentive Plan)

Alternatives1.Salary

a. No wealth accumulationb. No “Golden Handcuffs”c. Paying more today than yesterday

2.Pension – Benefit pay tomorrow for work todaya. Have to include everyone

i. See 401(k) example b. Qualified Defined Benefit Plan can be a very expensive solution

3. Long Term Incentive Plan (Bonus)

4. Golden Handcuff (Non-Qualified Deferred Comp)

a. Selectiveb. Building wealth for employee (during life, at death and disability)c. Contingent asset offsetting a contingent liability if employee leaves earlyd. Customized Vesting Schedulee. 457(f) or Split Dollar SERP designs

Best Way to Manage These Offerings Without Creating a Burden to the Credit Union

• Develop a Board Compensation and Benefits philosophy/policy

• If offering a SERP, develop a board SERP policy to provide guidelines for any program offered.

• HR Manager

• Evaluate vendor offerings

• Utilization of independent benefit & compensation consultant

What is the Key to Recruiting the Right CEO?

1. Track record of success

2. Fit/Culture (Board)

3. Growth orientated

4. You get what you pay for – example

5. Always look at a pool of candidates even if there is a clear ideal internal candidate

6. Create a reward/carrot when recruiting from outside

7. Is your CU the right challenge for this candidate?

1. Growth Potential/opportunity

2. Is the Board willing to modify charter or look for new growth strategies

Managing Transition

• There is no “joy in the void”

• Stay “in tune and in touch” for one year or until new CEO has earned the Trust necessary to step back (Guidance and frequent communication)

• Don’t assume anything, each transition is different (Mentorship)

• Window to frame or reframe relationships is 3-6 months. • Internal vs External Hires are different.

Where Do We Go From Here?

Questions

Conclusions

Next Steps

Thank You!