SAN DIEGO-When the time comes to hire a new CEO, there is a perception that it pays to hire outside the credit union to get better talent, but one person says that's a myth.
"The numbers do not back [it] up," said Scott Albraccio of CUNA Mutual Group, noting turnover is higher when CEOs are outside candidates rather than promoted from within. "CEOs hired from within stay five years longer. It is better to hire from within because those people know the credit union's philosophy, they know the business plan.
"What this means, Albraccio said, is as in the case with a sports team CUs must maintain a "good bench." This consists of developing strong executive teams filled with individuals who eventually will step in when the CEO retires. It also requires credit unions to place "golden handcuffs" on these executives.
"Compensation must be equal to or better than the competition," he advised. "Credit unions need to make it so it is too difficult for people to leave."