NEWS
Keith Kuzio Succeeds Chip Cargas as Board Chair
Lancaster, Pennsylvania – October 28, 2020 – On October 27, 2020, the Cargas Board of Directors officially elected Keith Kuzio, retired CEO of Larson Design Group, as board chair, succeeding founder Chip Cargas. For Chip and our company, it’s another step in transitioning Cargas to the next generation of owners and leaders.
The Cargas Board of Directors
The Cargas board has a unique dynamic because of our company’s direct employee ownership program. While typically director, owner, and employee are separate roles, at Cargas, one person can be all three. In addition, board members might report directly to Nate Scott in his role as President & CEO. And because Cargas employees are also shareholders, Nate interacts with his “bosses” daily. It requires a respectful and intentional approach to the relationship.
The board was established when Cargas incorporated in 1991 with Chip as its sole member. But as the company has grown, so has the board. In 2012, the first independent directors were elected—two individuals from outside the company who had been advisors to the Cargas board since 2010. For Chip and the rest of the board, having an outside perspective was incredibly valuable.
“It brings a wealth of experiences and knowledge to the board that we don’t have internally,” said Chip.
“It’s really helpful for people who are on the outside to provide some new perspective and insights to help facilitate a really good conversation,” added Nate.
Board members from outside our organization also provide a glimpse into the future. Many of Cargas’ independent directors have experience working with businesses larger than Cargas and have helped the board scale its governance practices as our company grows.
Today, the Cargas board has eight members—five employee-owner directors and three independent directors from outside the company:
- Aaron Cargas, Cargas VP
- Chip Cargas, Cargas Founder
- Jim Schultz, Founder & President of Applied Educational Systems
- Jon Clemens, Cargas VP
- Keith Kuzio, retired CEO of Larson Design Group
- Mike Yeager, Cargas VP
- Nate Scott, Cargas President & CEO
- Velma Redmond, retired Divisional General Counsel for American Water
Primary areas of focus include sustaining Cargas’ culture, high-level strategy, and leadership succession. Board members also sit on two committees: Nominating & Governance and Audit & Risk.
The Succession Process
After Nate was named President & CEO in 2017, the Cargas board turned its attention to the next item on the leadership succession plan—finding the next board chair. First, board members identified and documented the qualities they were looking for in the chair role. Then, they began to identify potential candidates.
Fairly early into his tenure as a Cargas board member, Keith Kuzio emerged as a strong contender.
Born and raised in Williamsport, PA, Keith earned a Civil Engineering degree from Lehigh University and is registered as a Professional Engineer in Pennsylvania and New York. Early in his career, he worked for small businesses in the private sector and in government, primarily in transportation designing highways and bridges. He joined Larson Design Group, an employee-owned architectural, engineering, and survey firm, in 1992 as a project engineer. He was named president in 2000 and served as CEO from 2005 until his retirement in April 2020.
Under Keith’s leadership, LDG transformed into an award-winning, 100 percent employee-owned firm with a national reach that consistently ranks in the ENR 500 and is widely admired for its quality, projects, and talent. The company also transitioned to an ESOP employee-ownership model in 2002. Since then, annual revenue growth has averaged 12 percent, and the firm’s enterprise value has grown at an average of 19 percent per year.
Keith has also served as a board director of UPMC Susquehanna, trustee of the YWCA of Northcentral PA, and board chair of the regional Susquehanna Health Foundation.
LDG’s values align closely with Cargas’ company purpose of Shared Success. Founder Ken Larson’s vision was tied to employee ownership, and culture, values, customers, and community are all highly valued by the organization.
In 2008, when Keith and Chip met at an ESOP seminar hosted by LDG, they recognized commonalities between their organizations and remained in touch. In 2016, Keith was officially elected as a Cargas director and quickly became the primary candidate to succeed Chip as board chair.
“We want someone in the board chair role who is living our culture, understands our core values, and understands our vision for the future to be built to last,” said Nate. “Keith really embodies that and has done a great job of introducing concepts to us that we can take advantage of to help us be built to last.”
Keith’s position as an independent director was ideal. The Cargas board was seeking an outsider’s perspective at the chair level and also wanted to keep the roles of CEO and chair separate. Additionally, with the Cargas team at 151 employees and growing, the board felt our company could benefit from Keith’s experience scaling an employee-owned company from 50 to 365 employees.
During his time as a Cargas board member, Keith helped organize and form the agenda for the Nominating & Governance Committee and establish the Audit & Risk Committee.
“I’ve been able to take my experience at Larson Design Group, which went through changes similar to the ones Cargas is experiencing now, and I was able to help Chip and the other directors guide the process of ramping up the governance of the organization.”
In preparation for the board chair transition, Keith worked with Nate and Chip to plan the board’s agenda and meetings. The process also included preparing Cargas employees for the change. Early this year, Chip and Keith gave a joint presentation to the Cargas team about the evolution of the Cargas Board of Directors. They introduced the idea of an independent director stepping into the role of vice chair. Keith was officially elected vice chair in March. He went on to run the July 2020 board meeting and was formally named board chair at the October 2020 meeting.
“It’s been a great experience, a great process,” said Keith. “And honestly, knowing that I’ve got both Nate and Chip, as well as all of the other board members, in my corner supporting this transition makes me feel good.”
“I’m highly confident in Keith,” said Chip. “He brings such a wealth of experience in larger organizations and experience in governance to the table. It’s also very helpful that he’s been CEO of an employee-owned company much larger than ours. He has the same value structure that we’ve had for a long time, and he has a collaborative way of facilitating things.”
Another Step for the Next Generation
For Chip, this is one more step in the process of shepherding Cargas into the hands of the next generation—and it’s one he’s happy to take.
“At this stage in my life, it’s a great joy for me to have a little more space in my life and be able to spend more time with my wife, four adult children, eight grandchildren, and ride my bicycle—things like that. But also, at the same time, still be engaged and helpful and supportive at Cargas. I have such an emotional connection to our company as you may imagine, and I just want to help however I can for as long as I can.”
“Chip has poured his heart and soul into the business,” said Nate. “He has a lot of passion for continuing to share success in the community. I think this provides him with more mental bandwidth to focus on those types of things. And at this stage of life and his career, he deserves that.”
Chip will remain a board director, supporting Nate and Keith and ensuring the transition is on track. He also continues to serve in his part-time role of Shared Success Advocate, promoting Cargas’ way of doing business both inside and outside our company. Chip is also active in the local community, partnering with organizations and programs that he’s passionate about and that he believes will make Lancaster a better place for all.
As he takes another step away from the day-to-day operations of our company, Chip is excited to see how the next generation is carrying out his founding vision.
“It’s one thing to start with some lofty ideals,” said Chip, “But it’s a whole other thing to have a whole bunch of people work together and refine things, put practices in place, put programs in place, start employee ownership and get it working, and really double down on being built to last in a way that’s collaborative and caring and shares the success of our company. Every time we reach a milestone of some kind of change, and I see the next generation is carrying on some of the things I started in the corner of a bedroom those many years ago, every time that happens, I feel proud of our whole team working together.
Looking to the Future
In his role as board chair, Keith is focused on preparing Cargas for the future. But in his words, “It’s an evolution, not a revolution.”
For Keith, that means change will take the form of incremental improvements rather than sweeping transformations. Top of mind is fulfilling the board’s fiduciary responsibility to its shareholders by securing and scaling the Cargas culture.
“Protecting and growing the shared success and employee ownership model are central to value creation in Cargas,” said Keith.
Having guided Larson Design Group through similar growth, Keith knows Cargas must scale as the company grows. “We need to evolve the processes and systems we use to manage risk, evaluate opportunities in the marketplace, and create value for our customers as well as employees and shareholders.”
He also has an eye on continued leadership development so Cargas has the right people to head up the opportunities the organization wants to pursue.
Increasing diversity on the board and at all levels of the business is also a future focus.
With the incremental nature of the transition, Nate is confident that the board and Cargas are set up for ongoing success.
“I’ve really appreciated the job that Chip has done to help our company, our board, and me personally. I’m glad that he’s not going anywhere and we are approaching this in an incremental way. It just makes these types of transitions easier. At the same time, I’m also appreciative of Keith’s approach to the transition of the chair role and his focus on that evolution, not revolution. I feel like we have a lot of great foundational pieces in place for the next generation to build upon thanks to Chip, and I’m really looking forward to working with Keith to build on that foundation.”