League InfoSight Highlight: Succession Planning

Glory LeDu, CEO, League InfoSight and CU Risk Intelligence

Succession planning was a 2023 Supervisory Priority and continues to be a hot topic. Not having a plan in place is a major cause of credit union mergers, according to NCUA.

In 2022, the NCUA issued a proposed rule regarding succession planning. Although the proposed rule only impacts federal credit unions, it’s important for all credit unions to take note. The proposed rule would require that each credit unions’ board of directors establish and adhere to processes for succession planning. Some of the proposed board responsibilities include:

• Approve a written succession plan that covers officers of the board, management officials, executive committee members, supervisory committee members, and credit committee members; and
• Review and update the succession plan and policy as necessary, in accordance with a board established schedule, but no less than annually.

While a final rule hasn’t yet been issued, succession planning is an important tool for all credit unions. Starting to address plans for succession now will only help your credit union prepare for a viable future. To help credit unions get started, we’ve created a new Succession Plan resource (1520.10) in CU PolicyPro. This resource is found under the overarching Model Policy 1520: Succession Planning. If you haven’t already reviewed this document and/or had this discussion with the board, this might be a good way to get these important conversations started.