1. SUCCESSION PLANNING FOR EFFECTIVE CORPORATE GOVERNANCE
CCCU MANAGERS’ FORUM
SUCCESSION PLANNING FOR EFFECTIVE CORPORATE GOVERNANCE

2. PRESENTATION FLOW Context & Definition
Objectives of Corporate Governance
Pillars of Corporate Governance
Typical Governance Framework
Role & Responsibility of Board
Succession Planning - Definition & Purpose
Objectives of Succession Planning
Effective Succession Planning – Pros & Cons
Succession Planning Framework & System
Trends & Best practices in Succession Planning
Benefits of Succession Planning
Conclusion

3. CONTEXTUAL FRAME Regulatory Pressures Competitive Forces
Disrupting Mental Model of Credit Unions
Transactional Predictable Model
Contemporary Transformational Dynamic Model
Governance and Succession Planning

4. CORPORATE GOVERNANCE
Corporate Governance involves a set of Relationships between an Organization’s: Board and Management Employees Shareholders (Members) Stakeholders (creditors, regulators, communities, environ) Source: OECD

5. CORPORATE GOVERNANCE
Corporate Governance constitutes system by which organizations’ objectives are set, means of performance determined and monitored for compliance System of directing and controlling orgs for the benefit of all stakeholders

6. CORPORATE GOV OBJECTIVES
Specifies distribution of Rights and
Responsibilities among participants
Balances Shareholders’ (Members) other
Stakeholders’ Interests (Policy, Process, Procedure)
Facilitates Org Efficiency & Productivity =>
Sustainable Growth and Development

7. TYPICAL GOV FRAMEWORK

8. PILLARS OF GOOD GOV Transparency: Full disclosure – Shareholders
Accountability - Int/Ext: Board => Shareholder/Regulators
Management => BOD
Equity:
Fairness
operating business
Protect shareholders rights
Transparency: Full disclosure – Shareholders
Regulators other stakeholders
Independence: Thought & actions
Avoid conflict of Interest
Compliance:
Legal and Regulatory (Environ)

9. GOV OPERATING SYSTEM

10. BOD: ROLE & RESP

11. CHANGING OF THE GUARD

12. SUCCESSION PLANNING Identification and development of potential
successors for key positions in a company
through a systematic evaluation process
=> training and development. Succession
planning is largely predictive in judging an
individual for a position he or she might
never have been in.
Source: Businessdictionary.com

13. SUCCESSION PLANNING - SP
Process of Identifying and Developing new Leaders who can Replace current Leaders due to; Retirement, Resignation, Dismissal Death, or Health issues who separate from the Organization…. whatever reason

14. PURPOSE & OBJECTIVES - SP
Increase the availability of Experienced,
Capable Employees, Equipped/Prepared
to assume future Leadership Roles
Designed to ensure business Growth,
Success, and Continuity
Effective SP gives you a Strong Bench!

15. SP: PROS & CONS BARRIERS ENABLERS Unscientific identification
selection criteria/process
Leadership bias ‘cloning’
Suboptimal tendencies,
not “letting go”
Lack of commitment by
leadership
Nepotism/Favoritism
Establish leadership a/c for talent pipeline Extend SP beyond usual boundaries of control Culture of transparency Focus on targeted dev Holistic/diversified tools of intervention

16. EFFECTIVE SP STRATEGIES
Board/CEO involved
Talent reviews: Board 
CEO; CEO  Exec..
I/D viable successors
for “M C” positions
“Pipeline” approach to
I/D talent at all levels
Hold Exec A/Ctable
SP <=> buis strategy
Manage the Irrational,
Political, Emotional
dynamics
Assess Performance
and Potential
Integrate SP  PMS
Commit Resources
Source: Dan McCarthy - UNH

17. THE SP SPECTRUM – ƒDS

18. TYPICAL SP FOR CU CEO

19. TRENDS IMPACTING SP
Shifting demographics – increased Exec attrition, shortfall in # of future leaders Economic – downsizing & flattening org Recognition by leaders – influence of values and competence on org success Increased complexity of Exec Positions Diminishing loyalty among employees

20. BEST PRACTICES IN SP
Analysis - understanding most significant needs of company
industry 4-6 years, skillsets of CEO.
Development - process different for internal & external
candidate. (i) Shortlist small group who can be ready in 2-4 years
Selection – internal candidates present their vision of the
company for next 5 years to the Board. Risks in both scenarios.
Transition – onboarding process and focus on CEO for the
first 12 months (relationship building outgoing CEO & BOD)
Source: Stephen A. Miles & Nathan Bennett

21. HIGH LEVEL GOALS OF SP
Cultural alignment with Mission Critical objectives Disruptive thinking, maintain synergies and equilibrium Continuity in business strategies (mission) without risk of “Group Think” Encourage Diversity, Systems Thinking

22. KEY BENEFITS OF SP
Reduced risks associated with loss of experienced leaders Preservation of organization culture Promotes employee engagement/loyalty Business continuity and sustainability Improved employee morale and retention Organizational predictability and stability

23. SP MATRIX: Adapted - SIGMA Assessment Systems Inc.
POSITION
CEO
HRM
FIN
TECH
Incumbent
John Doe
Mary Jane
John Smith
Bob Brown
Retirement Date  
Next: Ready Now
Jack
On Deck: 1-3 yrs
Tom
High Pots: 3-5 yrs
 John
 Elizabeth

24. CONCLUSIONS ON SP
Critical business management and HR process associated with talent mgt. Development of staff in preparation for future leadership roles Contributes to continuity in leadership and organizational risk mitigation strategies Dynamic Systematic Holistic Meritocracy

25. HYPOTHESIS: SP => CG?
SP: Availability of experienced & capable
employees prepared for future leadership
roles => Continuity, Growth, Sustainability
CG: Balances shareholders’/stakeholders’
interests and facilitates eff/productivity =>
Sustainable Orgs. (Credit Unions)

26. CONCLUSION
THANK YOU
QUESTIONS & COMMENTS

27. ACKNOWLEDGEMENTS
Bersin & Associates Businessdictionary.com Dan McCarthy – University New Hampshire Greg Belkin Financial Times HCM Analytics Organization of Economic Cooperation and Development (OECD) PWC Research SIGMA Assessment Systems Inc. Stephen A. Miles & Nathan Bennett