The CEO Evaluation and Performance Review


One of the most important responsibilities of any credit union Board of Directors is the annual performance evaluation of the CEO. In my over forty years of experience I have found the performance evaluation to be one of the most difficult tasks of Board members.

Many managers find the performance evaluation a challenge even when they are evaluating staff with whom they engage daily. Imagine the challenge in evaluating someone you work with for a couple of hours a month. Now add to that the complexity of providing a meaningful evaluation that is the result of 7-9 Board members consensus assessment. Along with the difficulty of gaining consensus of a group, imagine that the individual evaluators are not working in the financial services industry. This is the task of a credit union Board.

This article is intended to provide a path to excellent CEO performance evaluations. We define that as an evaluation that is clear to all, in particular the CEO, captures the entire body of work, is a clear consensus of the Board, is a meaningful guide to future work and rewards the organizational accomplishments that benefit the membership and has NO SURPRISES!

The Process

The ideal CEO evaluation begins with an agreed set of objectives with clear measurements of success. Those measures should identify successful execution of the credit unions strategic plan. They should be consistent with the mission, vision and values of the organization. There should also be a clear understanding of the value, in terms of compensation of the annual performance. That pay should be driven by the Board’s agreed upon compensation strategy for the CEO.

The following chart provides this information in a manner clear to all stakeholders.

The upper section of the scorecard shows the financial and balance sheet results of the plan execution. They include a column for planned performance at 3.0. There is also data indicating performance at both greater than plan – 3.5 to 5.0 and performance below plan – 2.5 to 1.0.

Immediately below that data is the metric(s) indicating performance against key objectives. These objectives are defined during the planning process and are considered to have significant strategic impact on the credit union. They represent projects that the Board believes are items for specific focus by the CEO.

Following that is a score defining the economic member value  that has been created for the year. This measure has been developed by KNG to demonstrate a unique indicator of performance against peer. We are able to estimate through our process the economic value provided to the members of the credit union. We will address our methodology in another article.

Below the Member Value metric is the result of the qualitative Board survey of the CEO’s leadership skills and performance. For more detail on this refer to our next article entitled For a Successful CEO Evaluation – Go To the BARS.

The cumulative effect of performance is described in the next section and ties directly to compensation – both base pay adjustments and incentive payouts. We find that this process results in excellent clarity of performance expectations and results. If you are interested in learning more about the process, it’s success, timeframes, and requirements please contact me at 608-239-3449. of 8

We hope this information is helpful to Boards and CEO’s seeking to bring clarity and structure to this year’s CEO performance evaluation. If you have any questions or are interested in any assistance in your credit union’s CEO Performance Evaluation and Compensation, please contact me at 608-239-3449 or

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