Building the Perpetual Board: A Leader's Guide to Succession Readiness
At the recent 2025 National Director’s Roundtable, I led a session on one of the most critical duties of governance: proactive board succession planning. In today's landscape of accelerating change, a reactive approach to filling board seats is a significant strategic risk. The question for every board is not if its composition will change, but how well it will guide that change.
This article summarizes the four-phase workflow we discussed for turning succession planning from a periodic project into a continuous, disciplined practice that builds a perpetual, future-ready board.
Phase 1: Assess Your Current State
You can't plan for the future without an honest and thorough assessment of the present. This phase is about creating a clear baseline by analyzing your board's current composition from multiple angles. This process produces a "gap analysis" that shows where your board is strong and where it needs to build strength for the future.
The Board Skills Matrix
The foundational tool for the "Assess" phase is the Board Skills Matrix. Its purpose is to create an at-a-glance inventory of the current skills and competencies residing on the board. The skills you track should be tailored to your credit union's strategic needs, but often include:
Core Competencies: Finance/Accounting, Strategic Planning, Governance, Human Resources.
Future-Focused Skills: Financial Technology (FinTech), Cybersecurity, Digital Marketing, and Data Analytics.
Community-Focused Skills: Community Leadership, Advocacy, and Public Relations.
(Example takeaway: A matrix might reveal that a board has deep expertise in finance but a critical gap in cybersecurity.)
Diversity, Demographics, and Tenure
Beyond professional skills, it's crucial to provide a quantitative snapshot of the board's composition to ensure it reflects the community it serves. Key metrics include:
Age & Tenure: Are you cultivating new leadership, or is institutional knowledge concentrated in a group nearing retirement?
Diversity: How does the board's gender, racial, and ethnic diversity compare to your Field of Membership (FOM)?
(Example takeaway: An audit might show that while gender diversity is strong, the board's age and ethnic diversity do not mirror the membership, highlighting a key recruitment opportunity.)
Phase 2: Define Your Future Needs
The board your credit union needs in five years might look very different than the one it has today. This phase directly links your succession plan to your long-term strategic plan. After assessing your current gaps, you must ask the critical question:
Based on our strategic goals, what new skills, experiences, or perspectives will be essential for effective oversight?
This process synthesizes your analysis into a "Director Profile" or a 3-Year Board Skills Plan. It transforms your recruitment from "filling a seat" into a strategic search for specific expertise, such as cybersecurity, digital marketing, or M&A knowledge.
Phase 3: Cultivate Your Pipeline
Great boards are not found; they are built. This requires a proactive, "always-on" approach to talent identification and development. Effective boards develop formal channels for sourcing candidates from both within the membership and the broader community. This is also the phase to implement development programs to prepare high-potential individuals for future board service, such as creating an Associate Director program or establishing a mentorship system.
Phase 4: Execute & Onboard
The final phase ensures your preparation translates into a smooth and successful transition. This involves a robust, fair, and transparent process for vetting, nominating, and electing new directors.
Equally important is a structured onboarding program that accelerates a new director's ability to contribute effectively from day one. A great onboarding process moves beyond operations and financials to cover board culture, unspoken norms, and interpersonal dynamics, fully integrating the new member into the team.
Conclusion: Making Succession a Living System
To ensure this four-phase workflow doesn't become another "binder on the shelf," it must be activated. The most effective boards integrate succession activities into an annual Governance Calendar, assigning recurring tasks like the "Annual Board Skills Matrix Review." This creates a living, auditable system of accountability that ensures the development of a perpetual, future-ready board is not just a concept, but a reality.
Our Modern Governance practice includes facilitating the board succession planning process. To discuss how to build a board that is ready for the future, schedule a private consultation.
