Succession planning is more than a risk-management exercise. It is a clear expression of a credit union’s commitment to long-term stability and growth. While both community banks and credit unions face challenges in this area, credit unions have distinct considerations due to their member-owned structure and cooperative principles.
The Current Landscape
Recent data underscores the urgency of proactive succession planning in credit unions.
Impending Retirements
Aging Leadership
According to CU Times, the average age of credit union CEOs and executives is approximately 66 years old. Many of these leaders have delayed retirement in order to guide their institutions through the uncertainty of the pandemic, further amplifying the urgency for planned transitions.
Lack of Preparedness
Research from America’s Credit Unions indicates that more than half of credit union boards currently do not have a formal succession plan in place. This absence of planning introduces risk not only to operations, but also to member trust and institutional continuity.
Regulatory Mandates
The National Credit Union Administration (NCUA) has finalized a rule, effective January 1, 2026, that requires credit union boards to implement succession planning for key leadership roles. This regulatory requirement affirms the importance of institutional resilience and leadership continuity.
Lessons from Community Banks
While focused on different structural models, community banks offer useful parallels that reinforce the urgency of proactive succession planning.
CEO Departures
Bank Director’s 2024 Compensation and Talent Survey found that 40 percent of bank CEOs are expected to depart within five years. However, only 18 percent of banks have identified a successor and created a plan.
Financial Impact
Research by Russell Reynolds Associates found that banks without a public, long-term succession plan experienced a seven percent average drop in stock value following an abrupt CEO departure. In contrast, banks that communicated a robust succession plan experienced a six percent increase in stock value.
Internal Talent Gaps
Aging C-Suite
A PCBB report noted that nearly one-quarter of banking executives are aged 65 or older, mirroring the age distribution seen across many credit unions.
These insights highlight that succession planning is not merely a governance task. It is a strategic tool that shapes financial performance, institutional credibility, and long-term stability.
The Strategic Importance for Credit Unions
For credit unions, succession planning is inherently tied to their values of stewardship, service, and community impact.
Member Confidence
Operational Continuity
Compliance + Best Practice
Implementing Effective Succession Planning
To navigate leadership transitions effectively, credit unions should consider the following best practices.
Succession Planning Committee
Critical Role Identification
Move beyond the CEO role and identify other key positions essential to the credit union’s long-term health and mission delivery.
Internal Development Focus
Invest in building internal talent through mentorship, leadership development, and cross-functional exposure to prepare potential future leaders.
External Benchmarking
When needed, partner with external executive search experts to identify, assess, and recruit high-impact leaders who align with the credit union’s culture and strategic vision.
Ongoing Evaluation
View succession planning as a dynamic process. Regularly review and refine the plan to align with organizational growth and evolving leadership needs.
Conclusion
Succession planning is not about retirement. It is about legacy, resilience, and the future of the institution. For credit unions, it protects mission continuity, member confidence, and operational excellence. Those that engage in thoughtful, proactive planning will not only meet regulatory expectations, they will position themselves to thrive through generational transitions and shifting financial landscapes.
About the Author
Brandon Biegenzahn
President
biegenzahn@mbexec.com
Brandon holds dual roles as President of McDermott + Bull and Chair of the firm’s Financial Services Practice. As President of McDermott + Bull, Brandon leads day-to-day operations for the firm as well as the strategic buildout of the firm’s team of executive search managing directors. As Chair of the firm’s Financial Services Practice Group, he is a partner to an array of financial services firms, including investment banks, commercial banks, private banks, credit unions, asset managers, institutional investors, and fintech companies.