By Alec Berkman
If the statistics indicating an impending rash of credit union executive retirements are true, the demand for qualified and competent successors will grow dramatically. This means that credit union boards will be busy identifying and attracting top-tier talent to run their credit unions. One size does not fit all when it comes to leadership talent and you need to find out if your executive compensation package is an asset or a liability in attracting and/or retaining the right executive talent.
Alignment of Interests
Aligning the interests and values of executives with a credit union’s business strategies is the key to developing healthy, long-term relationships with decision makers who can lead credit unions into the future.
Today’s credit union is different than it was even ten years ago. The intrinsic homogeneity that once defined the credit union movement is gone. Fields of membership and lines of business are considerably different from what they had been in the past and credit unions now compete with banks, other financial institutions and each other. All of these factors, along with increased board pressure to maximize efficiency and raise bottom line performance, have contributed to a changing culture within credit unions and mandated changes in leadership teams.
The credit union now operates in a highly competitive geographic marketplace as well, which means there is increasing pressure to invest substantial amounts of money in people, marketing, systems and product development in order to stay relevant. And that marketplace has grown in area. As fields of membership and SEG groups expand, a CU’s community grows too and now often includes thousands of people spread over several counties and multiple states. In this increasingly competitive environment, traditional compensation programs may no longer be sufficient to meet the demands of many credit unions’ business objectives.