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< Back Women In Football, Politics And Credit Union Boardrooms Jennie Boden Feb 11, 2021 It’s important to prioritize and value diversity. It’s Super Bowl Sunday as I write this, and it’s snowing at my home in New Hampshire. My husband has made a big batch of his famous mac and cheese, and we have a fire roaring in our wood stove in the ell. (Unless you’re from New England, you won’t know what an ell is, but it’s a great term that means the room that connects the house to your barn. For us, that room has been refinished to a cozy family room.) We’re getting ready to watch Tom Brady (yes, I’m still rooting for him) take on Patrick Mahomes. But the news that I’ve been focused on this week is about the three women who “will be making history” tonight—National Football League referee Sarah Thomas and Tampa Bay Buccaneer assistant coaches Maral Javadifar and Lori Locus. While Tom Brady will be playing in a record 10th Super Bowl, for the first time in NFL history, three women will also be on the field tonight. While the female football ref and coaches made news all week, I also saw an interview with Jocelyne Lamoureux-Davidson and Monique Lamoureux-Morando, two sisters who happen to be Olympic gold medalists in hockey. Aside from continuing to play the sport that they love, they’ve also dedicated their lives to inspiring the next generation of young girls to fight for equality in sports. Asked about tonight’s history-making Super Bowl, one of them said, and I’m paraphrasing here, “We’ll know we’ve made progress when this is no longer a story.” I couldn’t agree more. I mean, don’t get me wrong. I think it’s great that history will be made tonight. Just as I thought it was great that Joe Biden picked Kamala Harris to be his running mate, and she is now our vice president, regardless of the politics. But why does it still have to be history-making? Because it is. I had the same reaction when I was speaking recently with CUES member Deborah Acosta Conder, board chair at $2.5 billion JSC Federal Credit Union , Houston, Texas. Conder was bringing me up-to-speed on some recent appointments that the credit union had made to its board of directors. She shared that under her fresh leadership, and the constructive partnership that she was building with relatively new CEO Brandon Michaels, also a CUES member, she had communicated to the board that the credit union needed a “more diverse board—an expanded board, because the credit union was expanding its own strategic vision.” With an acute focus on diversity, Conder noted that being “a person of color herself,” she had always wanted “the membership to see themselves reflected on the board.” And now, she was in a position to make a difference. Acting with purpose, Conder and her colleagues first identified the core competencies, skills and qualities they wanted in their new board members. Although the legacy of the credit union was proudly and firmly tied to the National Aeronautics and Space Administration, the team decided to recruit some board members outside of the famous space agency. The group prioritized diversity, individuals with broader experience who had been through mergers and acquisitions, and people with legal and digital strategy experience. And they hit the jackpot. They also changed where and how they recruited board members. Conder called on each of her board colleagues (and we would encourage the inclusion of the CEO in this process too) to explore their own, personal networks. If great, potential candidates for your board are not already members of your credit unions, assuming you have a fairly open charter, they can join! The recruiting team also worked with the local United Way’s Project Blueprint that “trains tomorrow’s nonprofit board leadership, ensuring that Greater Houston’s nonprofit sector reflects the rich diversity of [its] community.” The results? Three new additions to the board who all bring with them not only great diversity but also great competence. One is even a coveted millennial! Michaels agrees with Conder that the credit union will be better for it. A third-generation CEO, following in the footsteps of both his grandmother and his mother, he says that throughout his life, he relied on the perspectives of these two pioneering women: “When I look at boards, I value diversity of thought and experience. We all have various perspectives based on our lives and our journeys, and it is that very diversity of thought that is incredibly important to us in our boardroom because our members are diverse.” New board member Lavonne Burke Hopkins, senior legal director, cybersecurity, product & application security, and Dell Digital for Dell Technologies Inc., joined the JSC FCU board because she believes that there is alignment between her “day job” and the current strategic initiatives being undertaken by the credit union. She was happy to find that board service at the credit union is a perfect way to “marry her experience with her own personal goals of service.” Her new board colleague Dwayne D. Busby serves as the executive director overseeing the mission, goals and overall purpose of strategic partnerships at the University of Houston-Clear Lake. Conder tapped Busby, of course, for his strategic thinking skills, and he is more than happy to provide them. He was honored to be approached by the chair, who is a leader in the community, and he, too, sees board service as a way of giving back to his community, which has done so much for him. His goal? To help determine how the credit union’s strategic plan actually works in Houston’s very diverse community. Lastly, Portia S. Keyes was tapped during this last round of elections too, and the board is lucky to have her. Keyes is a contracting officer at NASA Johnson Space Center. A strong “believer in the power of teamwork,” Keyes joined the board because she, too, believes that “serving the credit union is an extended way of serving her community.” She also volunteers for Fifth Ward GO Neighborhood, a Houston-based initiative dedicated to revitalizing the city’s communities. In The State of Credit Union Governance 2020 , published by Quantum Governance in partnership with CUES and the David and Sharon Center Johnston Centre for Corporate Governance Innovation, we found that demographic diversity was ranked No. 1 among the highest priorities when recruiting new board members among our respondents, but only sixth among those skills that add value in the boardroom. Could it be that everyone is talking about the need for greater diversity in the boardroom, but no one understands why they need it? At JSC FCU, clearly, leaders are both valuing and prioritizing diversity. They, along with all of us at Quantum Governance, would encourage your credit union to do both, too. Previous Next

< Back How Using a Recruiter Can Boost Board Succession Planning Efforts Gisele Manole Jun 28, 2022 Approaching director searches like executive searches can produce great results. Recently the National Credit Union Administration proposed a new rule that would require all federally insured credit unions to have board succession plans. Here at Quantum Governance , that proposal prompted a robust conversation among us consultants on the merits and challenges of regulation. And that conversation prompted us to look for ways to lessen the potential burden of increased regulation in this area. Our instincts to usher in solutions meant getting our arms around an emerging board renewal practice enlisting a recruiter to help with executing on the board succession plan. Two Credit Union Case Studies To learn more about using a recruiter at the board level, we didn’t have to look farther than two credit unions we have had the privilege of working with recently. Both have taken up the challenge of ensuring the future of their board with innovative new thinking that includes hiring a search firm to help recruit board candidates. For $1.3 billion Utilities Employees Credit Union President/CEO Bret Krevolin, a CUES member, the notion of enlisting the expertise of a corporate recruiter came about because the credit union was looking to diversify its board. "We were looking to really broaden the experiences, as well as the gender and ethnic diversity of our board," he says. "We didn’t want to recruit the positions in the same way we had before.” Krevolin and his board hired executive search firm Smith & Wilkinson , Scarborough, Maine, to identify highly desirable board candidates and conduct the initial interviews before recommending them to Krevolin and his board. Smith & Wilkinson Partner Nick Hayes says that recruiting a board member is different from typical corporate recruiting. “The main challenge behind recruiting for credit union boards is the time commitment required to ensure that each candidate understands the industry, understands the credit union, and understands the makeup and duties of the board,” he says. “We’ve found that many people are open to hearing about these board roles, and to successfully ‘recruit’ them into running for a board seat, we must take the time to make they understand these three areas.” $6.4 billion Hudson Valley Credit Union CEO Mary Madden, CCE, and her board also looked to Hayes to help find qualified board volunteers in an increasingly competitive market for talent. “Many companies use recruiting firms for executive searches, and we had heard of other industries doing the same for board candidates,” says Madden, a CUES member. “Knowing we were entering markets where we lacked a familiarity with local community leaders, the credit union felt engaging an experienced recruiter could facilitate the search for high-caliber board candidates.” For the last several years, Madden, her board and her management team have been prioritizing improvements to their governance. “One aspect of that work was defining volunteer roles and responsibilities, writing job descriptions, and identifying key skills and competencies needed to help the credit union succeed,” she notes. “With our industry’s guiding principle of people helping people in mind, we prepared specific information the recruiting firm could use to help us identify the candidates who would add value to our volunteer/management collaboration as we grow closer to a $10 billion cooperative.” What’s Your Objective? Hayes says having a clear goal in mind when reaching out to a search firm about recruiting board-level directors is one of the most important steps a credit union needs to take in this process. “We [the recruiters] need to understand the history of your board and your credit union, and why you are looking to take an active step into putting together an external campaign for a board position,” he explains. “We need to understand if a certain skill set, personality or background will complement the rest of your board, and we need to understand the value it will bring to both sides. We’ll need to spend time with your board to develop a clear value proposition that we can take to market on behalf of your credit union. Madden champions the work that Hayes is doing and stresses that finding talented volunteers must be an ongoing effort. “Incumbent board members should consider seeking ways to connect with talent year-round and not simply at election time,” she says. “Involving diverse voices—such as BIPOC (Black, Indigenous, people of color) and LGBTQ+ community groups/leaders—can help you spread the call for candidates, especially in new markets where the credit union may have less brand recognition. “Nomination committees can be assisted by having senior leaders, volunteers and community leaders identify potential candidates throughout the year so relationships can be built with those who may have interest in serving,” she adds. In this brave new world of interconnectedness and regulation, the challenges to board recruitment and succession planning remain. However, with a clear vision of your board’s future state and the expertise of an experienced recruiter, your credit union can draw on new talent to further the credit union’s vision and mission. Previous Next

< Back Why Directors Are Chess Pieces, Not Checkers Jennie Boden and Dr. Alexander Stein of Dolus Advisors Jan 25, 2022 Every director should be ‘chair material’—even if they wouldn’t make a good chair. We worked with $6.5 billion Hudson Valley Credit Union , Poughkeepsie, New York, on an extensive board renewal project. During that effort, the CU’s nominations subcommittee decided that every candidate on its slate of nominees should be “skilled enough to be board chair” or “chair material.” But what does that really mean? Does it imply that you should only recruit people to your board who have the intelligence, experience, qualities, hard and human skills that indicate this individual could readily assume being chair of your board? Does it suggest you should raise the level of expectation that you and your colleagues on the nominations committee—indeed on your board—have for yourselves in terms of the type and the caliber of individuals you recruit and nominate to your board and supervisory or audit committee? Our answer to both questions would be a resounding, “Yes!” What it doesn’t mean is that anyone or everyone on your board should actually become chair of your board. Remember, board members are more like chess pieces than checkers. They each come with their own unique skills, attributes and experiences. While you want to ensure that you are only recruiting individuals of the highest caliber, not everyone is cut out to be a board chair. Some people are natural leaders and make excellent chairs. Others, while still amazing leaders, are more comfortable in positions with less authority and better suited for serving as vice chair or other important roles. Still others have a razor-sharp mind for numbers (a great treasurer, for example), but might be challenged when it comes to building consensus or running an efficient meeting—both requisite skills for any good chair. So, remember, when you’re recruiting for new board members, ask yourselves these questions: Does this person embody the most desired skills, attributes and characteristics? Is he or she good enough for our board? Will he or she elevate the level of our discussions? But, when you’re identifying your future chair, also consider these: Is this person a consensus-builder? Can they facilitate difficult decisions? Build a strategic agenda that delivers effective outcomes? Are they a leader who will inspire followers? In other words, choose your chess pieces wisely, and deploy them strategically. Alexander Stein, Ph.D . , is founder of Dolus Advisors , a consultancy that helps leaders address psychologically complex organizational challenges. Previous Next

< Back The Concept of ‘Constructive Partnership’ Caitlin Hatch and Michael Daigneault Dec 23, 2019 Collaboration, more than control, fuels today’s high-performing boards. The Quantum Governance team has had the opportunity to work with a great many credit unions throughout the U.S. and Canada—often with the core objective of improving the working relationship between the board and the CEO (including the members of the senior management team that report directly to the CEO). Frequently we are asked, “Is there an approach towards credit union governance we should adopt to best achieve this vital goal?” For most, we recommend adopting the framework of a “constructive partnership” between the board and the CEO/senior management team. One of our clients recently challenged us to define what we mean by a constructive partnership and put it in writing. This blog is the result of that thoughtful challenge. Origins of the Concept of ‘Constructive Partnership’ The concept of a constructive partnership was first developed by Richard Chait, Ph.D., a nonprofit governance expert at Harvard University. In his book Governance as Leadership , Chait suggests the best way to frame the relationship between a board and CEO is by focusing primarily on effective collaboration, rather than on effective control (as is the case with the Carver model of “policy governance”). The ways in which the board and management are effectively collaborating, fostering a leadership culture of trust, executing fiduciary oversight, crafting strategy together, offering mutual support and—yes—holding each other accountable to further the organization’s mission is what we (and Dr. Chait) mean by a constructive partnership. The Central Question The central question that the constructive partnership governance framework attempts to answer is this: “How can the board and the CEO (along with the senior management team) work together most effectively while still observing their respective areas of authority to achieve the credit union’s vision and mission?” The keys to success are in effective teamwork, genuine collaboration and mutual accountability, with both the board and CEO creating maximum value to move the strategic goals of the credit union forward. Within the constructive partnership between boards and management, boards retain the primary legal responsibility for governance—the proper exercise of ultimate authority—of their organization. Boards also exercise organizational oversight and ultimate policy setting. They properly delegate to the CEO and the senior management team the responsibility for managing operations, personnel and day-to-day organizational resources. As the BoardSource publication The Source: Twelve Principles of Governance That Power Exceptional Boards notes: While respecting this division of labor, exceptional Boards become allies with the CEO in pursuit of the mission. They understand that they and the chief executive bring essential, complementary ingredients to the governance partnership that, when combined, are greater than the sum of their parts. Exceptional boards recognize they cannot govern well without the CEO’s collaboration and that the CEO cannot lead the organization to its full potential without the board’s unflagging support. This central governance “partnership relationship” was further developed by the work of Ram Charan—co-author of Boards That Lead and probably the leading governance expert in the world today. Charan’s framework emerges from the central question: When is it appropriate for a board to “(1) take charge, (2) partner or (3) [delegate]”? Similar to Chait, the focus of Charan’s work is that the board and the CEO should work strategically and collaboratively as a team for the good of an organization and its mission. There are, according to Charan, appropriate situations where (1) it is the board that should take charge and lead, such as in the choice of the next CEO. There are also circumstances in which (2) the board and senior management should thoughtfully and consciously work to actively partner with each other, such as in the creation of an organization’s vision, mission and strategy. Lastly, there are significant areas in which (3) the board should delegate appropriate management authority to the CEO and his or her team, such as in nearly all tactical, personnel, operational and execution matters. One way to think about the strong partnership focus of this framework is to reflect upon how a doubles tennis team works together. Consider Venus and Serena Williams, each superb individual tennis players, but also exceptional as a doubles team. When they are playing together, each must work to perform individually, but also bring out the best in her partner, so that the team can overcome any and all challenges it faces. The benefits of a constructive partnership model emerge even more clearly when one considers the alternatives. What if the board alone took on the responsibility of determining the credit union’s strategy? Then the CEO/senior leadership team would not be able to contribute their expertise, and they would be significantly challenged to fully understand and effectively implement the board's identified strategic goals. On the other hand, if the CEO and the senior management team developed the strategic goals without the board’s input, they would subvert one of the central roles of a credit union board—being meaningfully involved in helping to set the direction of a credit union. They could also potentially take the credit union too far down a path not supported by the board, creating significant conflict at the leadership level. The constructive partnership model calls for the board to take a strong partnership role as a strategic thought leader and visionary, in true collaborative partnership with the CEO and his or her team. Together, they must work effectively to determine the best path forward for the credit union, its members and the communities where the credit union operates. As such, the two must work closely together to consistently foster the quality of the board’s composition, knowledge and discussions to ensure the entire leadership team can be effective partners to move the vision and mission of the credit union forward. Caitlin Hatch previously served as a senior consultant with Quantum Governance and has worked with credit unions for the past eight years, focusing on governance and strategic planning. Prior to that, she served for 25 years as general counsel and corporate secretary for the largest anthracite coal company in the United States. Previous Next

Perry Haaland, Ph.D. Statistician Perry Haaland, Ph.D. Statistician is an expert in a wide range of statistical methodologies. Dr. Haaland has more than 30 years of professional experience as a statistician. He brings the practical experience of solving complex problems in an industrial research setting along with well-honed skills in explaining statistical concepts to management at all levels. He retired in 2017 as the lead statistician at Becton Dickinson, a Fortune 250 medical technology company. Dr. Haaland is a strong proponent of effective graphical analyses, having been one of the founding members of the Section on Statistical Graphics of the American Statistical Association. Dr. Haaland is currently Adjunct Professor of Statistics at UNC-Chapel Hill where he is developing a curriculum for teaching data science to graduate students in statistics. Learn More Back

Taras Nohas Founder & Principal, TN Governance & Strategy Taras Nohas is the Founder and Principal of TN Governance & Strategy and an Adjunct Consultant with Quantum Governance. Taras has extensive board experience and a true passion for credit union governance. In addition to his firsthand experience, Taras successfully completed the Institute of Corporate Directors Program Designation (ICD.D) at Rotman University, as well as Rotman's Credit Union Directors program (CCD). Recognizing the importance of lifelong learning Taras completed his Master’s Certificate in Risk Management and Business Process from the Schulich School at York University and the Executive Managers Program at the University of Alberta. Taras’ career has been marked by continuous advancement and learning and he served as the Director of Strategy at Servus Credit Union. Taras quickly joined the Executive Leadership Team as Vice President Strategy and Governance followed by his role as SVP Strategy and Governance. As an executive team member, Taras worked closely with the CEO and Board of Directors at Servus. Over the course of his career Taras has been a Board member on several for profit and nonprofit boards. In October 2022, Taras earned the Certified Management Consulting designation (CMC), which represents a commitment to the highest standards of consulting and adherence to CMC Canada’s Uniform Code of Professional Conduct. Taras is a native of Edmonton and in his early education, completed a Bachelor of Commerce and an MBA at the University of Alberta. Learn More Back

< Back Taking Action On Credit Unions’ No. 1 Director Recruitment Priority: Diversity. Jennie Boden Sep 21, 2020 The credit union and women’s movements are clearly doing something right. But we still have a long way to go. The day after Kamala Harris was picked by Joe Biden as his running mate, I was talking with a colleague of mine about his choice. I have to note that the colleague in question is a woman, and she is about 10 years younger than me. She was lamenting that everyone in the media was focusing on the fact that Ms. Harris was a woman and, of course, a woman of color. From her point of view, as someone from a younger generation, why should this be the news? She sees Ms. Harris as a qualified, strong candidate for the position, regardless of her sex or ethnicity. In my colleague’s mind, of course she would have been in serious contention for the job. It started me thinking about what my sister would say as someone who is 10 years older than me. She was in college in the ’70s, and I remember her then with long, straight hair, playing sad Joni Mitchell songs on her stereo and challenging my father, the minister, on nearly everything he said. She would bring with her the perspective of history: knowledge of the years when women struggled to have a voice in their marriages, let alone a seat in the boardroom, and of the racial struggles that plagued even my small hometown in rural Pennsylvania when she was in love with an African-American boy in high school. Then my mind moved on to my niece. She is 10 years younger than my colleague . She’s a graduate of Stanford University, recently married to man whose parents immigrated from India, and studying to be a doctor at one of the best medical schools in the country—maybe the world (University of California-San Francisco). Now, at this point, it should be noted that I write from a point of great advantage, and the cast of characters in this article also enjoy great advantages. We all hail from stable families, where shelter, food and love were plenty. We are all well-educated. We are all white. So, what does this have to do with credit unions? And, specifically, with governance, since that’s my area of specialty? My biggest fear in all of the focus on DEI is that it will remain a discussion point and not become a point of action for us all. - Jennie Boden I had two thoughts immediately after the conversation with my colleague and my ensuing reflections about my sister and niece. The first was around the notion of board renewal. We talk about the topic all the time at Quantum Governance, and we’re finding that credit union boards are increasingly talking about it, too. It used to be that credit union board members would join the board and stay for years—for decades, even. I’ve had a client who had two board members who served until they died in their 80s or 90s. Others explained odd behavior by noting that a few of their board members were displaying early signs of dementia. And so, the first rule of board renewal is that you must renew, for the health of your board. It’s the board’s responsibility to ensure that you do. The guiding principle for board renewal is to find a healthy balance of historical continuity and renewal. I celebrate that my colleague just assumes that Kamala Harris is right for the job of vice president and that my niece sees a horizon as wide as possible for herself and all those around her. (And I also imagine what will be available, once they are grown, to my great-nieces.) But, it’s also critical for all of us, as women, to realize from whence we’ve come. My sister’s perspective is valuable, too. She reminded me recently that when she was growing up, girls were shut out completely from sports in high school, and today we have a woman coaching in the NFL. How far we have come, but still, how far we have to go… Ensure that your board is balancing these perspectives—all of them. Historical continuity will give you important points of view on the past, and renewal will open future possibilities the likes of which you’ve never conceived. The second thought that came to mind following the conversation with my colleague arose directly from the research that we published in The State of Credit Union Governance, 2020 report. For the first time ever, we found that demographic diversity was the No. 1 recruiting priority among credit union board members and leaders, surpassing financial literacy for the first time. Source: The State of Credit Union Governance, 2020 We also reported the news that the average credit union boards have nine members, three of which (36%) are women! On its face, this may not seem significant, but it is. In comparison, a 2018 study by Deloitte and The Alliance for Board Diversity of America of Fortune 100 companies found that women held only 25% of their board seats. And in 2018, CUNA found that 52% of credit union CEOs are female, compared to only 5% in commercial banks and 6% in Fortune 500 companies. And it’s not just among the small credit unions: At credit unions with between $1 billion and $3 billion in assets, more than 14% of the CEOs were female, compared to just more than 3% of bank CEOs. As a movement (both a credit union and a women’s movement), we’re clearly doing something right. But we still have a long way to go. It seems that today, everyone is talking about “DEI” or diversity, equity and inclusion. (Note that Quantum Governance believes the appropriate order is “ EDI ,” given that the notion of equity is a broader concept that underlies both diversity and inclusion.) It’s a most worthy discussion, and it’s been a long time coming. My biggest fear in all of the focus on DEI is that it will remain a discussion point and not become a point of action for us all. But clearly, we know how to do this. We’ve started to make true inroads in terms of integrating women into the boardrooms and C-suites of America—at least among our credit unions. Be sure not to let up on that focus. Rather, let’s add to it. While we can celebrate the gains made for women, we’ve not moved the needle one bit on increasing the number of visible minorities in the credit union boardroom or C-suite, and that’s just as important. In fact, remember, demographic diversity is now the No. 1 recruiting priority among credit union board members and leaders. How much richer would your board be if 50% of its members were women? If you had true diversity in terms of ethnic and racial background? In terms of age and tenure? In terms of skills and experience? How much more stirring would the conversations in your boardroom be if you were truly open to listening to everyone’s voices? Previous Next

< Back Being Chair Is More Challenging Than You Think Michael Daigneault and Jennie Boden Jul 23, 2019 In addition to playing an important role in managing the CEO, the chairman also plays a key role in managing the board itself. When we work with credit union boards, and in particular with chairs, we’ll often start by asking the provocative question, “Should boards manage?” Immediately the resounding response, of course, is “No!” But when we ask our clients to dig a little deeper, to think a little harder about the important work they do to govern their credit unions, ultimately one brave individual will, in a quiet, tentative voice say, “Yes … ?” That response is often more of a question than an answer—remembering that the board is responsible for managing its one employee, the credit union’s CEO. Go further, we implore them. Deeper. The board is also responsible for managing itself—for managing the work of the board, or ensuring that it effectively and efficiently fulfills its solemn roles and responsibilities. And to that end, we consider the chair to be the “Board Operations Manager in Chief.” But how many chairs are fully prepared to take up this important mantle? If you are, or have been, the chair of your credit union’s board, did you go to school to learn how to be effective? Did you attend board meeting facilitation training? Get schooled in board meeting agenda design? Public speaking? CEO relations? You get the point. It’s been our experience that many board chairs ascend to the position feeling not quite prepared to take on all of these responsibilities. In fact, many of them don’t fully understand the full breadth of the chair’s responsibilities. Consider the following job description. Today’s contemporary board chair is responsible for: Crafting & Effectively Facilitating Meetings Set the agenda for board and executive committee meetings in concert with the CEO. Call to order and preside over meetings of the board and the executive committee. Encourage and expect full and robust participation of board members at meetings. Help to maintain a healthy balance between operational and strategic discussions. Building a Positive & Healthy Board Structure & Culture Appoint committee and task force chairs as well as committee members. This “appointment power” is perhaps one of the most important responsibilities most chairs have! Work with the governance and nominations committee (if you have one—If you don’t have one, charter one now!) to ensure appropriate and effective identification, recruitment and onboarding of new board members. Work with the governance and nominations committee to create a positive and effective board and board member process. Serve on the executive committee and as an ex-officio member of all board committees. Acting as Key Liaison With the CEO Act as a representative of the board as a whole, rather than as an individual supervisor to the CEO. Help to establish the strategic direction of the credit union, working in partnership with board colleagues and the CEO. Work with the treasurer, the directors and the CEO to oversee the credit union’s budget and support the development of and adherence to sound fiscal policies to safeguard the integrity of the credit union’s financial management systems. Optional: Have the power to sign, in addition to the CEO, on behalf of the credit union, all contracts authorized either generally or specifically by the Board. Setting & Modeling High Standards for Board & Staff Oversee efforts to build and maintain an exceptional governing board by setting goals and expectations for its members. Convening board discussions on evaluating the CEO and ensuring the effective negotiation of the CEO’s compensation and benefits package, as well as serve as a key conduit for information to the CEO. Acting as One of the Credit Union’s Chief Ambassadors Serve as the official spokesperson for the board among community members and the media, in addition to the CEO. Encourage board members to act as credit union ambassadors and encourage board member participation in credit union events, as appropriate. Inspiring & Engaging the Board Inspire a shared commitment to the credit union’s vision, mission and strategic goals. Cultivate leadership among board members. Encourage board member development, including further education in the credit union’s governance. The good news is this: There is training for future or existing board chairs. In fact, we’re leading one for CUES. This will be a time and place where you can deepen your understanding about your fundamental roles and responsibilities and gain critical knowledge about building an effective board culture, evaluating your CEO and even facilitating great board meetings. We promise an engaging, provocative exchange that will push you to the edge of best practice in board leadership. Previous Next

< Back Gender Equity In The Boardroom: We're Not Done Yet Jennie Boden Aug 25, 2023 Boards still have work to do to support their female directors and wider DEI&B efforts. Gender politics, like all politics, can be polarizing. At the risk of taking a polarizing position, I can't ignore a string of recent encounters that prompt the question: Would that have happened if I (or she) were a man? If you’ve read my posts before, you may know I regret that as a society we still need a publication entitled Advancing Women , but I’ve come to realize that it’s an imperative. If we don’t call out the subtle (and sometimes not-so-subtle) gender biased actions that minimize the voices of women, it’s akin to deferring to only the male perspective. After observing a recent credit union board meeting, I watched with concern as a female board member walked out with her head hung low. Later, I spoke with her as a part of our formal assessment process. I learned then that the board chair—a man—had admonished her about her behavior in the meeting—behavior that hadn’t even registered a raised eyebrow with me (and I’ve conducted hundreds of meeting observations over the years and seen and heard plenty of eyebrow-raising behavior). It’s interesting to also note that a male director had spoken very rudely to a fellow board member in that same meeting, and I don’t believe he received feedback from the chair regarding his behavior. While with another client, I witnessed a long list of follow-up and action items being delegated to the only female on the board, prompting a hearty round of laughs from her male colleagues. I, too, have had my own experiences in this regard. For example, I have recently been challenged by men both about my presentation and facilitation style, correcting my cadence and tone. These conversations are impossible to imagine if I were male. In these instances, I wondered: Would these men have acted in the same way toward us if we were men? The informal poll I’ve taken, among both men and women, resulted in a resounding “No.” Don’t Let DEI&B Efforts Disappear While gender is just one of the many elements of diversity, these three recent experiences tell me that a commitment to diversity, equity, inclusion and belonging remains vital. And even more so now, given that LinkedIn released a report last year that found the hiring of chief diversity officers dropped in 2022 after “experiencing significant growth in 2020 and 2021.” An article on the Society for Human Resource Management’s website referenced the LinkedIn study and quoted Amy Hull, director and head of DE&I at Paycor, a global leader in human capital. Hull “said the LinkedIn and Revelio data shows that the pledge to impact change was not followed by genuine effort.” Even our own research at Quantum Governance suggests that our colleagues in the credit union space may not really value demographic diversity. One of our recent studies found that only 35% of credit union board members are women, compared to 51% of the total adult population in the United States. And when we asked those in the credit union community (board and supervisory/audit committee members, CEOs and members of senior management) what they valued most in their boardrooms, demographic diversity ranked sixth out of 13 . What’s of real interest, though, is that for two years running, Filene researchers Quinetta Roberson, Ph.D., and McKenzie Preston found that “creating governance and accountability systems” around DEI “are paramount to the development of a sustainable approach to DEI that activates real change and drives financial performance.” In the previous year’s study , those same researchers also noted that “diversity may create advantages in terms of market growth, enhanced member experiences, risk management and increased strategic performance. Yet … it is not enough to simply have diversity. Effective solutions for building and maintaining fair and inclusive work environments are needed to leverage the potential for DEI to achieve its performance objectives and develop sustained competitive advantage.” And, I would add, to truly achieve change. I will admit some people do need some coaching on their delivery, and I am always open to learning. Additionally, the board chair is certainly in a position to insist on civility in all manner of dialogue and address situations where it is lacking. However, it’s critical to apply “the rules” unilaterally—to provide a forum where every voice and perspective is heard and valued. Women serving on credit union boards are, like their male colleagues, professionals. They are not supporting members, taskmasters and coordinators. Their roles and responsibilities include the same level of strategic thinking, planning and inquiry as their male colleagues. And before you give a woman subjective and stylistic advice on her self-expression, consider whether you would be so bold as to provide the same advice or subjective feedback to a man. Previous Next

< Back No Higher Calling Michael Daigneault Nov 25, 2014 The challenge of effective CEO evaluation It never fails—when I’m with a group of board members (which is very, very often) and I ask “What are your core responsibilities?” someone will always say, “to hire and fire the CEO.” And yes, I suppose at a very basic level this is true. Perhaps there is no more important decision a typical credit union board makes than in the hiring of a CEO. There is, of course, so much more to developing a successful relationship with a credit union CEO than in his or her hiring and firing. If you were to think back over your career and consider the best mentors you had—the ones who were able to elicit from you your finest moments as an employee—certainly you would consider their contributions to your career far beyond the moment they hired (or even fired) you. Indeed “CEO support and oversight” (not solely hiring and firing the CEO) is a key board responsibility that Quantum Governance focuses on. (The others are governance and leadership; performance and results; strategic thinking, learning and planning; budget and resources; membership and community outreach; and stewardship, ethics and financial integrity. On the whole, my colleagues and I sometimes worry that credit union directors spend too much time focusing on fiduciary and operational- related matters. Ideally, we would like to see you talk a bit more at the strategic level in the board room. However, one area where we do see a great deal of variability--and perhaps a greater need to focus at the fiduciary level—is in the assessment process of the CEO. What does an effective or “constructive partnership” between the board and your credit union’s CEO look like? That is, what kind of relationship do you have—and will you forge in the future—with your CEO? What are the appropriate operational and strategic boundaries? How, in the big picture, can you help your CEO be even more effective? What goals should you set for your CEO? Should your CEO’s goals be the same as the goals of the credit union as a whole—or should there be goals unique to him or her? Ultimately, what type of process is appropriate to provide an effective CEO assessment? There are real challenges in the answers to these vital questions. In Quantum Governance’s work, we assess credit union boards nationally, and less than 30 percent of board members we’ve surveyed think they effectively establish performance goals for their CEO. And only slightly more (35 percent) think they are effective in holding their CEOs accountable for such goals when they have been established. If my math is correct, that means only about 10 percent of credit union boards perceive they are effectively holding their CEOs accountable to an agreed-upon set of performance goals! To maintain a truly effective constructive partnership with your CEO, a board must thoughtfully and collectively work to build, foster, maintain and improve the relationship. A regular and genuinely valuable assessment process of the CEO is vital. It can provide: a more objective and comprehensive analysis of your CEO performance, a higher degree of focus on key credit union goals, efforts, and initiatives, an in-depth look at important leadership strengths – as well as challenges, a means for your credit union’s leadership to get “un-stuck,” a way to reframe key governance, leadership and strategy issues, baseline data to measure future efforts and progress, and new ideas, insights and ways to move the credit union forward. And yet, sadly our surveys show that a third or more of credit union board members feel they are doing an “ineffective” or only “adequate job” of using a quality process that allows all board members to provide input on the CEO’s evaluation. Such a process is a vital element in maintaining a good relationship with your CEO over time. In addition to ensuring that all board members have an opportunity to provide input into the CEO assessment process, here are other options to seriously consider: For example: 1) you could also ask your CEO to complete a CEO self-assessment tool aligned with the question set board members use to provide feedback; (2) you could ask for 360-degree assessments by direct reports to the CEO; and, in appropriate instances, (3) you could ask for mentor or coach assessments of the CEO. The immediate goal is to provide valuable feedback to the CEO that accurately assesses his or her efforts and gives genuinely helpful guidance to improve overall performance. The ultimate aim is to build an effective partnership that will help your CEO and, through his or her efforts, actively assist the credit union and its members to succeed. In many respects, there really is no higher calling before you as a board. Previous Next

Dr. Alexander Stein Founder & Managing Director, Dolus Advisors (a Principal in the Boswell Group) A licensed psychoanalyst, expert in human decision-making and behavior, and Adjunct Consultant with Quantum Governance, Dr. Stein serves as an advisor to CEOs, Senior Management teams and Boards across a broad array of industries on issues involving leadership, culture, governance, ethics, risk and other organizational matters with complex psychological underpinnings. Dr. Stein is also a passionate advocate for ethical and socially responsible technologies. Dr. Stein is widely published and cited in the business press and varied industry publications including Fast Company, INC, Financier Worldwide, Risk & Compliance, the Wall Street Journal, The FraudNet Report, among many others. A former monthly columnist for FORTUNE Small Business Magazine, CNN/Money, and CBS Business News covering the psychology of leadership and entrepreneurship, he currently contributes his expertise to Forbes focusing on the psychology of decision-making and unintended consequences in organizations and society. Learn More Back

< Back A Matter of Leadership Michael Daigneault Apr 1, 2015 CUs need to pave a new road to ensure a strong, high-performing board over time. Perhaps one of the most vexing and controversial challenges facing the credit union community today concerns the fundamental question: How can a credit union ensure ongoing, effective governance and leadership? One of the historical building blocks of a CU is that it is a cooperative. It has long been thought that financial cooperatives will be best led by members who have an actual financial stake—or share—in the CU itself. Since their own money is invested in the CU, it is widely assumed they will be aware of—and appropriately engaged in—the proper oversight of the credit union’s financial affairs. CU members accomplish this by electing a board to take on a set of responsibilities designed to help ensure the safety and soundness of the members’ resources, as well as the effective governance of the CU. The current state of credit union governance is, however, being severely challenged by a rapidly changing environment and a sometimes stagnant board. (Read a bonus article, “ The Nine Leadership Challenges , ”.) One of my senior consultants came to Quantum Governance from the general nonprofit sector. She was stunned when assigned to her first credit union client. What she found was a group of directors, the majority of whom had been in their positions for well over 20 years. Because of the long-time tenure of these board members, the institution was facing the wholesale turnover of both its board and its CEO in the next few years. By holding on so long, the board members actually ended up endangering leadership continuity—exacerbating the very problem they professed to be solving by their continued service. The time has come for boards to reframe and “rebalance their responsibilities,” as Ram Charan has noted in his new book, Boards That Lead: When to Take Charge, When to Partner and When to Stay Out of the Way . Yes, board monitoring and oversight are still important, but they are no longer sufficient. The reality is that for many CU boards, more effective leadership is needed. What Leadership Leads To At Quantum Governance, we talk with a lot of credit union board members and, unfortunately, what we’re hearing from them about their ability to effectively lead and govern isn’t altogether positive. The following data is from our 2014 credit union compendium: More than 25 percent of all board members we’ve surveyed think their board is “less than effective” at building a leadership culture of trust. Thirty-seven percent think they are “less than effective” at holding each other accountable. Only one in five board members thinks their board is “very effective” at asking the hard questions that need to be asked. Twenty percent of board members say they are “ineffective” or only “adequate” at acting decisively when necessary. Sadly, about one in three directors says their board leadership and governance culture are “less than adequate” overall. Importantly, credit union boards are struggling to find the right people to serve—with only 18 percent saying they are “very effective” in doing so. How to Get More Effective Leadership So what’s a credit union to do? Renewing the strength of your board and its leadership can be accomplished using various techniques. If you answer “no” to even a few of the questions in the following section, you’ve got some work to do. And you need to get moving, or you’re likely to get left behind. Way, way behind. Board assessment. Is your board working on strengthening its governance practices? Are you reflecting on what’s going well and where you’re struggling? How are your committees functioning—especially your supervisory committee? Have you and your colleagues committed to a regular process of board evaluation? Training for needed competencies and strengths. Are you undertaking a robust training initiative that responds to your assessment results by strengthening your directors’ intellectual capacities and stretching the boundaries of current discussions? Do your fellow directors return from the latest CUES or other conference full of ideas and enthusiasm? (Read “ Starting Point ,” about developing plans for director learning, in this issue.) Associate board member program. Have you considered an associate director program that will afford up-and-coming volunteers the ability to learn about your credit union’s business “from the ground up?” Are your committee rosters creatively drawing from non-board members–those in the community who could foster a wider sense of support for the credit union and support your associate director program? Do your recruiting “tentacles” go beyond the supervisory committee? (Also read “ Working in the Governance Wings : Strategies for readying volunteers to give a good performance once on the board”) Term limits. This practice is rooted in one of the central principles of maintaining board effectiveness over time and the idea of creating (and sustaining) a careful balance between historical continuity and rejuvenation. A big potential benefit of limiting the length of service of credit union directors is fostering an influx of new talents, skills and energy to the board as a whole, as well as among board officers. Of course, there are a number of traditional challenges raised concerning term limits. Some credit unions fear losing valuable board leadership and institutional knowledge. (Get ideas for minimizing this risk ) It takes time to really understand the issues at play within an organization—and credit unions are complex financial organizations. Some believe it imprudent and inefficient to spend valuable time and energy getting board leadership “up to speed,” only to then urge them to move on at the close of their tenure. Another frequently raised concern is an actual or perceived shortage of suitable or willing candidates. Such a shortage of qualified candidates can be an authentic challenge—or simply the net result of very low turnover. Of course, if a board officer or member has proved effective, there are some who would suggest it is entirely appropriate to maintain the status quo because “if it ain’t broke, don’t fix it!” Certainly, I’m not saying that term limits are the answer. They are, clearly, only one tool. But they can be a helpful tool for your board’s leaders. Rotation of officers. Additionally, it is helpful to periodically rotate directors through board officer positions so a sustained concentration of power in a limited number of individuals (either actual or perceived) does not occur. Rotating board officers also helps an organization from getting stuck with just one leadership style. Board officer rotation is also thought to strengthen the pool of candidates willing to serve. This is due to the common occurrence that some will naturally aspire to board leadership roles—but only if it is perceived there is an authentic opportunity to attain a leadership role after a reasonable period of time and service. Finally, a lasting concentration of authority in a select, few individuals is, I believe, contrary to cooperative governance principles. Know the true role of the board chair. While there are courageous conversations that need to happen at the chair’s level when a board member is failing to live up to his or her fiduciary responsibilities, strengthening the leadership of the board is not just your chair’s responsibility. As a board member, it’s your responsibility to truly be engaged. Don’t simply attend the meetings and go through the motions; be an active player. A board member recently told me that he estimated about 70 percent of his colleagues barely even spoke at his CU’s board meetings. Is that leadership? Your members are depending on you. More Than Incremental Improvement The challenge I would place before you is this: Are you entirely sure your current situation isn’t broken? Fundamental or truly transformational changes—not just incremental—are what your credit union must undertake to craft the exceptional board of the future. A board that can truly help to overcome the types of challenges facing credit unions. It will take exceptional board leaders, working in constructive partnership with management, to be successful. It is likely that some of the leaders you need to move forward are already on your board; it is equally likely that some leaders you need to meet such challenges are not. I couldn’t agree more with author Michael Hudson, Ph.D. in his Credit Union Management Article, "When Directors Step Down:" Directors, when it’s your time, have the courage to step up and step down. Board chairs, you have an important role to play, too, in board rejuvenation. Have the hard conversations. If someone isn’t participating or truly adding value, it’s your job to find out why, and—if need be—help find someone who will. In the end, no single tool, technique or individual strategy is a substitute for what is needed most at this pivotal time in the credit union community and that is, of course, courageous leadership on the part of every member of the board. Previous Next