What Should You Be Looking for in a Successor CEO?

Succession planning is getting considerable attention in 2025, as the deadline draws nearer to the NCUA final rule requiring that federally insured credit unions have a written plan. With just a few months until the Jan. 1, 2026, effective date, many credit unions are likely devoting more time to determining the criteria for a successor CEO. Here are suggestions for what to look for in successor candidates and how to find them.

Criteria for Today’s CEOs

Being a credit union CEO is more complex than ever in this highly competitive and digitally driven age. That’s why it’s so imperative that any successor CEO candidate have broad-based knowledge that encompasses finance, technology, data analytics, risk management, cybersecurity, operations, the regulatory environment and the latest industry trends. Candidates also need to have a thorough understanding of the competitive challenges posed by the big banks, regional and community banks, fintechs, virtual banks and other industry players and have an appreciation for how the cooperative nature of credit unions uniquely positions them in the marketplace. Such knowledge comes not only through experience but also through a commitment to lifelong learning.

Beyond their knowledge and technical skillsets, successor CEO candidates must demonstrate that they have the vision to lead an organization and show an aptitude for strategic thinking. Leadership skills are crucial, encompassing communication and interpersonal skills as well as the emotional intelligence to lead people. When leading others, this potential CEO successors should demonstrate an aptitude for collaboration and delegation. They also should show that they can effectively work with the board in accomplishing the credit union’s strategic objectives and embodying the values that are central to its mission.

Where to Find Your Successor Candidates

Finding successor CEO candidates who embody these criteria isn’t easy. We recommend exploring four key avenues:

1. Develop internal candidates. Advantages of internal candidates are that they already know the credit union and are likely aligned with its values. The credit union can target its high-potential employees and customize their training and experience to mold them into the type of leaders that best fit the vision and strategic direction of the organization.
2. Recruit external candidates. An external search can identify individuals who have more experience or a higher level of skillsets than the internal candidates possess. Typically, this is a person with a proven track record as CEO of a smaller credit union or as an executive vice president or COO at a similar-sized credit union. Often, they have a fresh perspective that can infuse the credit union with a fresh perspective and new approaches to solving persistent problems. You can hire them for a C-suite role with the intention to move them into the slot vacated by your retiring CEO, dependent upon their performance. Even if you don’t hire an external candidate, including them in your search will allow you to benchmark how your internal candidates measure up to those outside the organization.
3. Build your leadership pipeline through a merger. Mergers have become a succession-planning solution for many credit unions that are struggling to recruit and retain future leaders at salaries beyond their resources. For smaller institutions, a merger will transition them into a larger credit union that can better serve their members’ needs while also accommodating key executives in their desire to move up the corporate ladder. Larger credit unions, meanwhile, can fill in their succession-planning pipeline with the CEO and other key executives of a smaller institution, making it less dependent on traditional recruitment channels in which the demand for top talent exceeds the supply.

4. Consider a merger of equals. Increasingly, we are observing larger credit unions pursue a merger of equals or near-equals as the most expedient path for obtaining a strong CEO while also doubling the size of their credit union. Credit union directors are becoming more aware that a merger with a similarly sized partner will accelerate their growth while also obtaining a strong future leader as part of their succession planning.

Succession is the most critical time for a credit union to make changes that will have a massive impact on its future success. By identifying the criteria for a qualified successor CEO and exploring all avenues for finding them, your credit union will be one step closer to fulfilling your succession-planning needs.

Want to know learn more about succession planning? Click here to read CEO Advisory Group’s popular white paper, “Succession Planning With an Eye Toward Mergers as an Option.”