Credit union boards have a lot on their plates: safety and soundness; fiduciary responsibilities; and, ensuring compliance with laws and regulations. At times, it feels like the job of the Board is more about reviewing the past than reflecting on the future. Based on conversations and advisory services with dozens of highly performing credit unions’ boards, focusing on the future is the prominent habit of these boards and how they prioritize their governance activities.
“Because we doubled our assets and profitability over ten years did not imply we needed to double our Board’s workload,” shared the chair of a Midwest credit union. “The Board invested the same amount of time as in the past, but we were more focused on scanning the future and creating strategic value for our CEO and members.” This attitude was the same in other highly performing boards; all understood and acted upon the perception that their highest and best use was shaping their agenda and conversations, primarily toward the future.
Even more interesting was how these boards arranged their schedules and actions. Leading areas of focus were strategic planning, direction of major capital investments, and CEO retention and succession planning. “We didn’t overlook our duty of care with respect to compliance and financial matters; rather, we engaged outside professionals to assist us in understanding results, risks, and exceptions that required Board action,” said the board chair of a Florida credit union. “This practice allowed our Board to become more strategic in focus. We realized this would be a practice to follow as our credit union grew in size, complexity, and awareness.”
The CEOs of these credit unions welcomed their boards’ dedication to strategy, potential business models, and enterprise risk. In shifting focus away from the weeds of operations, the CEOs built even stronger relationships with boards. “I look to the Board as a ‘sounding board’ for new ideas for the credit union or clarity about decisions I will make,” shared a Pennsylvania credit union CEO. “My Board helps me appreciate perspectives, inquires about risk mitigation, and asks where the credit union should take additional risk. Ultimately, I will make a recommendation or decision; but, the Board is of utmost value in my decision-making process.”
As these boards set new standards and expectations for their own operations, accountability and evaluation became key. At the fundamental level, board members were expected to contribute to discussions, engage in activities, and refresh their own professional capacities. “To our members, their credit union, and the CEO; we (the Board) owe the finest governing team at their service,” said an Oregon credit union board chair. “We invest in each director and expect that director to grow with the credit union. Any variation is considered during the renominating process. Our members deserve the highest quality of voice in governance. We will deliver.”
Self-evaluation systems prevailed with each board. Some boards used tools designed internally or from industry resources. Others engaged with outside support for comprehensive evaluations, quantitative surveys, and qualitative feedback from each director. “By far, an external self-assessment was the biggest ‘stretch’ this Board has ever set for itself, “ said an Ohio credit union vice chair. “Initially, many directors feared what we might hear about our performance. Instead, we learned the love and care we have for our credit union became even stronger as we discovered new ways to grow individually and collectively.”
As your board considers ways it can boost service to members and shift its attention to the future, think about the observations from the chair of a West Coast credit union. “We focus on what our credit union needs to do to serve the next 100,000 members rather than only what we did to serve our existing 100,000 members. I wish we would have embraced this practice ten years ago.”
Her message is simple: regardless of size or market, boards need to spend the bulk of their time looking forward, rather than reviewing events and results in the past. “While we want to understand outcomes of yesterday, our larger role is to work with our CEO to take the credit union to existing and new members and markets, advancing our mission and vision.”
© 2023 by Jeff Rendel. All rights reserved.
Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.
Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275.