LAS VEGAS—Your co-op's CEO is retiring after a long career, and as a director you figure once you hire someone you'll be good for another two decades. But it doesn't necessarily work that way today.
"Just because you have a young CEO doesn't mean they're going to be there 20 years anymore. The whole 'until death' type of arrangement that boards have had with their CEOs in the past has gone away," said Ken Holmes, director of
NRECA's Executive Search Department.
"Unless they're unique, ultimately if they want to move on there are going to be opportunities," Holmes told a session on leadership planning at the 2018 NRECA Directors Conference.
He stressed that the time to think ahead is now—not when the CEO gives notice.
"It's not just retirement that you have to worry about," Holmes told directors. "What if they get sick? What if they have a family member that gets sick? What if they win the lottery?"
And it's more than just the CEO, said Holmes, urging directors to have succession plans for the board members and to set policies for the CEO and senior staffers. "You have a duty to have something in place," he said.
Getting some board members to talk about their own succession can stir emotions, Holmes said, but it needs to be done.
"Have those conversations amongst each other. 'Are you going to run again when your term is up?'"
And the situation becomes further complicated when you're trying to get young people onto the board, but they have families and careers and can't attend weekday afternoon meetings. To that end, Holmes asked directors to look at factors such as when the board meets, and their candidate nomination and voting processes for directors.
"It's an opportunity to really take a fresh look, to step back and say, 'What should we be doing as directors as far as defining what we need or should have on our board?'" said Holmes.
Holmes acknowledged that just getting started on the topic of succession can be difficult.
"When you look at succession planning you have to have honest, candid, blunt conversations. And it's tough for the board," he said. "But it's something that has to be done."
Additional coverage of the 2018 NRECA Directors Conference:
Today’s 8-Year-Olds? They’re Your Co-op Members of Tomorrow
Why Even a Small Co-op is a Big Target for Cyber Crooks
Why Social Media Really Matters for Your Co-op
Be Member Focused, Carson Tells Directors
Matheson Highlights Three Advocacy Roles of Co-op Directors