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< Back Does A Divided Vote Make You A Divided Board? Jennie Boden Apr 25, 2023 A divided vote makes you a human board. And it’s what you do afterward that matters most. While most of our clients are credit unions, Quantum Governance also works with a wide variety of other non-profit organizations—foundations, associations and charitable groups, even a small children’s home in India with an annual budget of just $50,000—helping their boards and chief executives level up their governance and strategy. We learn from every organization, adding to the knowledge bank from which we draw for all of our clients. For example, in recent times, a former credit union board chair called to ask if we could help his local school board find its way back to solid ground. This school board, like many others, had experienced wars over masking, vaccines and more that arose during the COVID-19 pandemic. And these experiences had taken their toll. When the school board chair said, “You’re our last hope,” we knew we had to help. And so it was, when in the middle of an offsite with that school board client that a fundamental, universal governance question was asked: “If we have a divided vote, does that mean that we’re a divided board?” It was one of the best, most nuanced governance questions that I’d ever been asked. I share it with you now, my credit union colleagues who serve on the board, because I believe you do everything you can to elude divided votes. I think you loathe divided votes. I think you fear divided votes. I’ve even been told that you refrain from putting what you even think might become a divided vote on your meeting agendas. But have no fear. I’ll share with you the same answer that I gave my school board client in the hope that it will benefit you: “Divided votes do not mean that you’re a divided board. They mean that you’re a human board. They mean that you’re a board made of living, breathing people with different perspectives and different thoughts.” I continued, “Divided votes mean that you feel comfortable enough as a board to have robust conversations and share compelling and, yes, contrary points of view and to support them with your votes.” “It’s what happens after the vote that determines whether you are a divided board,” I said. “Do you speak with one voice?” I asked. “Or do you leave the boardroom still advocating strongly for your position to anyone and everyone who will listen? Or are you respectful of the will of the whole as your board service demands you to be?” While I don’t wish upon any board the contention and divisiveness that our school board client has faced in recent years, I do hope every board will have the courage to wade deeply into robust conversations, the strength to tolerate divided votes, and the respect, in the end, to support the will of the whole. Previous Next

< Back Governance Committee – If You Don’t Have One, Get One! Caitlin Hatch Apr 30, 2020 Governance Committees can help ensure boards are running smoothly. Every now and then we are asked why governance committees are such a good idea, and it’s a good reminder to us not to take for granted that everyone knows or even shares our opinion. But, we think that they could be the most important committee your organization can have, so, in the immortal words of Toy Story’s Woody Pride, “If you don’t have one, get one!” and if you do, make sure it’s the best it can be. We say that because the role of the Governance Committee is multi-faceted and goes right to the heart of the effectiveness of your Board of Directors. And not just how they operate, but how they work together with the CEO or Executive Director, as the case may be, as well as the Staff. Governance Committees are authorized by the Board to be responsible for ensuring that the organization’s bylaws, key policies and practices are in optimal form – and that they stay that way. The reason for this is so that the Board can then do its work as efficiently and effectively as possible. We have spoken to many Boards whose members do not have a clear, shared agreement about just what the role of the Board members is, and how they should be carrying out that role. The reason is generally a simple one; it’s not that they don’t care, it’s that everyone comes to a Board and either assumes they know what a Board member does, or they bring their past experience with them and carry on as before. So – with everyone acting in a good faith – but often different — understanding of the Board members’ role, it’s easy to foresee how inefficiencies — and sometimes even hard feelings – can develop. And it generally all stems from everyone trying to “do the right thing.” It’s fairly well known that one of the chief responsibilities of a Board is to hire and manage the person who is delegated the authority to run the organization on a daily basis. But it is seldom recognized that the Board also has the responsibility to manage itself. Governance Committees to the rescue! They help to clarify – and codify — the role of the Board member, what Board Officers should and could be doing, whether the Board has the right committees and what those committees should be doing, and how well everyone is living up to their roles and responsibilities. Sometimes, Governance Committees are also tasked with overseeing nomination duties — held responsible for the strong succession and development of the Board by focusing on Board member recruitment, nominations, orientation, training and evaluations – of individual Board member performance and of the performance of the Board as a whole. Organizations that have active Governance Committees ultimately have more engaged Boards, with their directors sharing a clear understanding of the expectations for the Board, its members, their committee work and, ultimately, and most importantly, the results they are achieving. The clarity of purpose and responsibility saves the Board from distractions based on differing perceptions. A Governance Committee can help your Board maintain high standards for performance and accountability for results, which, at end of the day, is the whole reason for being on the Board in the first place. Making sure your organization’s core governance functions are high performing is important under normal circumstances, but in challenging times like these, it is even more so, and Governance Committees can minimize the risk an organization faces if, or when, the unforeseen occurs. Sadly, today, that is more important than ever. 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

< Back The Importance Of A Truly Independent Supervisory Committee Michael Daigneault and Jennie Boden Feb 25, 2020 If you’re shifting to an ‘audit’ committee instead, be careful not to sacrifice independent oversight at the altar of efficiency. We’ve seen an important trend relevant to a good number of state credit unions nationwide. It’s one of those quiet trends that we believe could—in the long run—have significant governance consequences, perhaps for the entire credit union community. It is the transition of a good number of supervisory committees to the form of an audit committee. And with more state regulations allowing such a transition, more and more credit unions are taking the opportunity to make it. While federally chartered credit unions are still required to maintain a supervisory committee, many state regulators have allowed the credit unions they regulate to operate with an audit committee made up entirely of board members, and the number of states (and credit unions) moving in this direction is growing. Further, some federally chartered credit unions, for various strategic reasons, are converting to state charters, thereby opening up the door to even more credit unions making the shift to an audit committee. The difference between supervisory committees and audit committees can at times be significant, and those differences often come down to two key factors: the scope of authority granted to such committees who is appointed or elected to them—that is, their composition Committee Authority Supervisory committees at federally chartered credit unions can exercise certain types of authority over credit union’s leadership, and the National Credit Union Administration’s Supervisory Committee Guide for Federal Credit Unions outlines two key actions a supervisory committee can take, namely: Suspending by unanimous vote any board member, executive officer or credit committee member Calling “a special meeting (by a majority vote) to consider any violation of the: a) FCU Act; b) Rules and Regulations; c) Charter; d) Bylaws; e) Any practice considered unsafe or unauthorized.” This can result in a board member officer or credit committee member being removed. The reality is, of course, that very few supervisory committees take either of these actions—even when perhaps they should. (Sadly, we have witnessed instances when we believe a credit union’s supervisory committee should probably have suspended or meaningfully investigated a board or committee member but didn’t.) The important thing to remember here is that they could take such actions in the interest of the credit union and its members if supervisory committees were properly charted, effectively trained as to their responsibilities and courageously led. The power to suspend or initiate a process to remove “any board member, executive officer or credit committee member” is a rarely used but still meaningful check on credit union leaders from engaging in acts that are unauthorized, unsafe or contrary to established laws and regulations. It is a far from a perfect means of deterring such misconduct, but when carried out thoughtfully and courageously by a determined supervisory committee, it can help save a credit union and its members from disaster. To be fair, some states give audit committees the same authority to oversee board activities as a federal supervisory committee, but some don’t. What happens when an audit committee does not retain the authority to oversee the board? Then one leg of the credit union’s three-legged governance stool has essentially been removed. Only two “legs” now remain: (1) the board (of which the audit committee is now a part); and, (2) management. In such instances, the three-part system of governance-related checks and balances has simply disappeared. This unique authority in the credit union realm to oversee the board may not, however, be the essential differentiator between the two types of committees. The real difference may lie in their composition. Committee Composition Traditional supervisory committees (both federally and state-chartered) that follow the federal credit union model are almost exclusively composed of members of the credit union who are not board members. The exception to this is that federal credit unions may have one board member appointed as a member of a supervisory committee. We find that this does happen sometimes but is not particularly common. In contrast, audit committee rosters are almost always composed of board members. This is often seen as efficient, more harmonious and certainly much simpler. What it gains in efficiency, however, it may lose in objectivity and independence. One must ask, for example, how likely it is that a committee composed of fellow board members will find fault with their own board’s governance efforts or even that of their individual board colleagues. Yes, in extreme cases it may still take action, but remember that’s if—and only if—they are in a state that still grants them the authority to do so. If one of the primary goals of both supervisory and audit committees is to serve as part of a system of checks and balances on board and management, it is little wonder that outright eliminating or even psychologically constraining such a role would result in significantly greater efficiency, harmony and simplicity. Therein, of course, lies the very danger traditional supervisory committees were designed to protect against! Effective supervisory committees play a vital role in the overall governance of the credit union and an adequate degree of independence must be a cornerstone of their design. Be careful not to sacrifice one of the foundation stones of the credit union governance system at the altar of efficiency. 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 Transitions of Power Jennie Boden Jan 26, 2021 A perfect time to re-evaluate your organization and its direction is when a key leadership shift is on the horizon. The recent transition of power in our country got me thinking about transitions of power in credit unions—both at the board and CEO levels. I think as a community, we give the most thought to CEO transitions, and this is definitely smart. The CEOs of many credit unions have been around for years, even decades. These CEOs have shepherded their credit unions through incredible growth, sometimes from managing receipts in a shoebox to managing billions of dollars in assets. The change that CEOs have experienced in their credit unions over these years, even if their growth has not been quite that phenomenal, is substantial—just as significant as the change that the credit union community has seen. And it’s important to step back and take the time to think about the future before the critical transition of power needs to take place from one CEO to another. It’s important, as a long-tenured CEO prepares to depart, to re-evaluate the credit union’s future direction, even the future direction of the board. What you needed and wanted from your CEO 10, 20 or even 30 years ago is, by definition, different than what you will likely want and need today. And clarity is key. Be honest. If you’re a risk-averse board, hiring a progressive CEO could be a non-starter. You’ll be clashing before your first board meeting. Chair-to-Chair Transitions Board-level transitions of power are just as important as CEO transitions. The transition from one chair to the next is far too often overlooked from a strategic point of view. Perhaps it is because it happens with greater frequency, but we take for granted that every member of our board will know how to take the gavel in hand when it’s her or his turn, and that’s simply not true. Not every board member is cut out to be the chair, just like not every board member would make a great treasurer, for example. (I know that I wouldn’t make a good treasurer!) And sometimes, certain individuals would be best suited for specific moments in time. A board member who has experience with mergers and acquisitions, for example, would be terrific if organic growth falls last among your strategic priorities. We’ve also seen some credit unions place their officers on a moving conveyor belt, rotating individuals through the four positions every year or even two. This also doesn’t support a healthy transition of power. By the end of year one, like in most jobs, the officer is just learning the position and putting solidly into place the relationships that they need to govern. By the end of year two, things are just beginning to click, and then the rotation begins, and the process starts all over again. Consider a four-year term to allow for a healthier transition of power, on-the-job learning and a few years of smooth sailing. Reflection on Your Organization and Its Direction Finally, take these important transitions—each of them—to pause and learn more about your credit union and what you want it to be in the future. Reflecting on your vision, mission and strategy when a new CEO transitions into the credit union or revisiting the board’s governance structure, policies and procedures after a three-to-four-year period is prudent. This is not to say that we don’t support a consistent, rigorous schedule of self-reflection and even self-assessment—we do. But in particular, transitions of power—both within our country and within our credit unions remind us, as the nation’s new favorite poet reminds us: “And yes, we are far from polished far from pristine but that doesn't mean we are striving to form a union that is perfect. We are striving to forge a union with purpose…” - Amanda Gorman Previous Next

< Back Parity In The Boardroom Takes Patience, Planning And Process Jennie Boden Jun 25, 2021 But putting in the effort can definitely make a difference. I have to admit I’m not a big fan of publications like Advancing Women . I mean, I’m honored to write for it, but why, after all these years, do we still have to have special publications with a special focus on advancing women? I mean, really. You’d think we’d be further along by now. Women started pursuing equality way back in 1850, when the first convention for women’s rights was held in Seneca Falls, New York. Sixty-eight women and 32 men attended the convention that demanded a woman’s right to vote in the U.S.; sadly, the convention didn’t address the racism and oppression faced by Black women and other women of color. In 1872, Susan B. Anthony and 14 other brave women were the first of their gender to cast votes in a U.S. election—and they were arrested for it. It wasn’t until 1919 that the 19th amendment was signed into law. And it passed the Senate by only two votes. Worse yet, it wasn’t until 1965 that Black and Latinx women were able to vote. That was the year before I was born. And today, so many voting rights are being threatened and even rolled back in some states. And that’s just the challenging path to voting. Women Leading Businesses A 2018 study by Deloitte and The Alliance for Board Diversity found that women held only 25% of board seats in Fortune 100 companies. And just more than 3% of bank CEOs are women. In The State of Credit Union Governance 2020 , published by Quantum Governance and partners CUES and the David and Sharon Johnston Centre for Corporate Governance Innovation, we reported that the average credit union board has nine members, three of whom (36%) are women. This is better than the Fortune 100 companies by 11%. 2021 data from CUNA shows that a majority (51%) of credit union CEOs are women – more than 15 times higher than the rate of women CEOs at banks (3%); among U.S. banks and credit unions between $1 billion to $5 billion in assets, 13% of credit union CEOs are women versus only 2% of bank CEOs; at both banks and credit unions, women CEOs are relatively more common at smaller institutions; and a board member of a credit union is about twice as likely to be a woman—33% of credit union board members are women as opposed to 16% of members of bank boards. We’re clearly doing something right in the credit union community. But we’re not there yet. A soon-to-be-released special report from The State of Credit Union Governance series, COVID-19 and DEI: Revolution & Evolution in the Credit Union Community , found that while more than a third (34%) of credit union board members in the U.S. are women, that percentage falls well short of the total percentage of women in the country (51%)—a difference of 17 percentage points. I guess I have to admit, as much as I wish parity of all types were just inherently so, that if we’re going to make more progress, we need to do so intentionally and consciously—that gender parity, like any parity, doesn’t just occur naturally. That’s why we need publications like Advancing Women and organizations like Women in Governance , headquartered in Montréal, Québec. The nonprofit was founded to “support women in their leadership development, career advancement and access to Board seats.” In partnership with McKinsey& Company , Women in Governance developed a parity certification program that is now being offered in the U.S. The program helps “organizations increase the representation of women in sectors where they have historically been underrepresented, as well as in executive leadership positions.” It’s a shame that we need a parity certification program to ensure that women are seen as being as capable as men to hold leadership positions within an organization, just as it’s a shame to think that we need laws to combat racial bias in policing. But we do. And there’s proof from other fields that, with focus and intentionality on those areas where we want to have a positive impact, we can make a difference. A Success Story From Science In 1966, only 2% of the total doctoral graduates in the physics disciplines were women, and that number increased marginally to just 5% for those graduating with a bachelor’s degree. Leaders in the field, including at the American Institute of Physics and the American Physical Society, spearheaded a program led from the board-level focused on gender parity. While that’s still a work in progress, they have experienced tremendous success over the years. Source: APS125 By 2018, both percentages had risen to 22%, still below the overall percentage of women in the U.S., but a vast improvement. While it’s disheartening to think that gender parity, and all types of parity, aren’t just inherently a given, we can be reassured that with focused intent and effective processes and programs put into place, we can make a difference—even if it takes a little longer than we might like. Previous Next

< Back Start Onboarding Pre-Election Michael Daigneault Nov 24, 2015 Eight steps supporting new board members' success Many credit union boards think the new director onboarding process starts when new board members have been elected to serve. But really, the key to building an effective onboarding program is not to wait for the election to take place. Just like board meetings run best when advance work is done to set them up for success, onboarding of new directors is greatly facilitated by steps boards can take before your members elect new directors. Consider taking the following key steps before the board election: Develop a matrix of your “ideal board” for achieving strategic goals. Create a skills matrix outlining the attributes and skills your board members currently have. Then, create a separate matrix showing those skills directors will need to carry your credit union successfully into the future. Be sure to do this with your strategic plan in mind. Identify board composition gaps. Compare your board’s current skills matrix with the skills matrix of your future, ideal board. What weaknesses do you see in your current board? Conduct a gap analysis. What attributes or skills are limited – or missing? Identify potential board candidates. Given the gaps you identify in step 2, what types of directors should you actively seek? You can even consider looking beyond existing credit union members and recruit board members from the community. Remember, they can always join the credit union, and they might add real value to your efforts. Involve, engage and educate potential directors. Show them the love! Ways to bring potential directors into the fold might include having them be a part of an associate board member program, or inviting them to a local community event. At the very least, you will want to be sure they visit a local branch and meet with the CEO and some of your credit union’s best and brightest staff. Do a background check and talk to references for potential board members. Remember, your potential, new volunteer will be responsible – legally and financially – for the credit union. Do your due diligence. Gauge the prospective director’s level of Interest. Here’s where you can begin to introduce your potential candidate to your other directors. Begin to take his or her pulse more formally to gauge his or her interest in candidacy. Confirm the potential director’s interest in and willingness to serve. Have a candid conversation about what time and knowledge is involved. Talk about the risks, too. Formally invite the potential director to stand for election. Here’s where your hard work pays off. Make the ask. If your candidate agrees to run—and is ultimately elected—you’ll need a process in place for orienting him or her to the work of your board. Previous Next

< Back Serving Members’ Best Interests Benefits From A Constructive Partnership Jennie Boden Aug 24, 2021 When directors, supervisory committee members and executives collaborate effectively, members benefit. I spent the better part of my career working in the nonprofit sector. I like to say that I’ve had every job from executive assistant to executive director. And I loved every minute. When you work for a nonprofit—any kind of nonprofit—you do it because you love it. You know, in the back of your mind somewhere, that you could make more money in the corporate sector, and sometimes kind and well-meaning family and friends even remind you of it. But you stay because you love it, and you feel committed to what you’re doing. I’ve found the same to be true for all the credit union staff that I’ve met, interviewed and worked with since I joined Quantum Governance more than seven years ago. While credit unions aren’t exactly like some of the charitable nonprofits where I worked, they surely are mission-driven, and as you know, it’s all about serving the members. Of course, one of the central roles and responsibilities of a credit union board member is to “carry out his or her duties as a director in good faith, in a manner such director reasonably believes to be in the best interests of the membership.” And we hear this from credit union board members all the time. Ask a credit union board member what his or her job is, and he or she will most often reply “to represent the best interests of the members.” One of my former colleagues used to say that was a board member’s response when he or she wasn’t sure what else to say—when the person wasn’t clear what the job really was. But I’m not quite so cynical. I do think that the roles and responsibilities of board members are changing, especially as credit unions continue to grow and the environment around them is becoming increasingly complex. But almost every board member I’ve ever met (and I’ve met a lot of them) really does seem to care about the credit union and is committed to doing what’s right for their members. The challenge, I believe, in this answer is that often board members believe they have the “corner on the market” in terms of representing the members’ best interests. What Does It Mean to Serve Members’ Best Interests Some years ago, Quantum Governance conducted a governance assessment for a large, multi-billion-dollar credit union. As a part of our assessment, we interviewed all the board members, supervisory committee members and senior managers. There seemed to be a perception among the board members that it was the board’s job to not only act “in the best interests of the membership” but almost to protect the membership from the staff. A member of senior management put it like this: “There’s a lack of trust. It’s not overt, so they [the board] won’t come out and say, ‘I don’t trust what you’re saying.’ There will be an attitude like what you’re saying is somehow colored for whatever reason. Like there’s another angle that we’re playing that benefits us and not the membership. As if we don’t care about the membership, too.” As if they “don’t care about the membership, too.” Of course, they do. A Constructive Partnership Serves Members’ Best Interests At Quantum Governance, we believe in the power of a constructive partnership between all three components of a credit union’s governing entities—the board, the supervisory or audit committee, and the senior managers. A constructive partnership puts a focus on effective collaboration, rather than control or even competition between the board and senior management. It actively fosters a leadership culture of trust that extends beyond even the credit union’s board and senior management to include the members of the supervisory or audit committee so that all three governing bodies are working together—collaboratively—to execute fiduciary oversight, craft strategy, offer mutual support and hold each other accountable—all toward the betterment of the credit union and in its members’ best interests. A constructive partnership recognizes that each of the three governing bodies has its own distinct roles and responsibilities. For example, of course the board and the board alone is responsible for setting the CEO’s salary and benefits, and we would never expect the board to wade into day-to-day operations or members of senior management to oversee the external audit that is put in place as a check and balance on their work. But just because the National Credit Union Administration has explicitly included the notion of protecting the members’ interests in the list of board members’ roles and responsibilities, don’t assume that everyone else either volunteering or working at the credit union isn’t just as committed to that very sacred duty, too—from the members of your supervisory or audit committee to your CEO and other members of senior management to the dedicated staff who manage your call center. Otherwise, especially in today’s economy, they’d likely be working elsewhere. Previous Next

< Back Creating a 'Wow' Credit Union Board Meeting Michael Daigneault Aug 24, 2014 How to Take Your Meetings to the Next Level Consider a typical board meeting. There is a call to order, some chairman and CEO remarks, committee reports, a call for old and new business, then adjournment. Did you ever realize a vast majority of what is said aloud in the meeting is exactly the same information provided in written form, begging the question: Was that a "board" meeting or a "bored" meeting? As financial services have evolved from a staid, conservative industry to a highly competitive sales and service focused marketplace, the conversations happening in the boardroom have not experienced a parallel transformation. As I work with credit unions, I challenge them to ask themselves: Are we addressing the right questions in the board room? If you answered no, the board might be stuck at the dysfunctional or functional level of governance. How should we think or act differently? A new approach can help the board evolve to the responsible or exceptional level of governance. Here is my vision for leaving routinized (unconscious) meetings behind and evolving to "wow" (enlightened) meetings: Old New Top-down information exchange Dialogue and interaction Focus on data and past results Focus on thinking and future initiatives Approval of numerous administrative items Consolidated consent agenda Oversight and review Imagining and innovating One key component is the consent agenda. Instead of listening to a series of operational and financial reports, board members are expected to read a packet of information prior to the meeting and come prepared to approve numerous items with one concise motion. This frees up the agenda to focus on planning and strategy discussions. Safety and soundness will always be a priority, but while the fiduciary role of the board is still necessary , it is no longer sufficient to lead a credit union. As with most changes, the trick is in the transition from old to new. As you move toward this new model, some people will adapt quickly while others may find it difficult to leave their comfort zones. One excellent resource I’ve found helpful over the years is a book by William Bridges called “Transitions: Making Sense of Life’s Changes” and its companion “Managing Transitions: Making the Most of Change.” Credit union leaders that have the courage to forge ahead will benefit by having a productive, engaged and focused board, creating boundless opportunities for the future. Previous Next

< Back The State of Credit Union Governance, 2018: Six Key Findings Michael Daigneault and Jennie Boden Jan 23, 2018 Use them to increase your board’s focus and effectiveness. We’ve been regularly surveying credit union board members, supervisory (“audit”) committee members, CEOs and senior staff on the executive team for the past five years. And for as many years as we’ve been surveying them, we’ve dreamed about the notion of pulling together a “state of the state” of credit union governance report—both to forward our own understanding of broad trends we’re seeing in the field, and also so that we can share the combined results with you, our friends, colleagues and clients in the credit union community. The culmination of that dream is The State of Credit Union Governance, 2018: Five Data-Driven Recommendations for Future Success . Today, we are pleased to share the report’s key findings with you. We hope that they will challenge you to increase the focus on effectiveness of governance and leadership at your organization—all toward the betterment of your credit union and its members. Key Findings We identified six key findings in total: Board members and CEOs have differing perceptions of governance . Their answers differ on 84 percent of the survey’s 21 key questions, fundamental to good governance—with the exception of the Supervisory Committee survey section, where there is more agreement. (Please note: Percentages throughout the report are rounded up to the nearest decimal; therefore, figures may not total 100 percent.) Board member and CEO perceptions diverge based on tenure. Board members who have served on their boards for a long time have more positive views concerning governance than those board members who have less tenure. Conversely, CEOs with longer tenures tend to be more negative than CEOs with shorter tenures. Bigger really may be better. For 18 of the 21 key questions asked, board members and CEOs of credit unions with assets of $1 billion or greater had survey scores that were statistically significantly higher overall (and therefore more positive views of the CU’s overall governance) than those credit unions with assets ranging from $500 million to $999 million. That is, larger credit unions tend to rate their governance practices higher than those of smaller credit unions. Credit unions that don’t undertake a more comprehensive assessment may have a skewed perception. Those credit unions that participated in survey-only assessments, opting not to include interviews, a document review and a retreat as a part of their process, tended to have more positive scores in many of the areas that we assessed. While the exact reasons for this more rosy viewpoint are unknown, it is a finding that is of genuine concern: Such a skewed—overly positive—viewpoint could cause some credit unions not to take corrective actions when, in fact, some action may be prudent. Respondents are concerned about recruiting future board members. Survey participants expressed concern with the board’s ability to attract the right people to serve on the board in the future, with a full 46 percent of respondents describing their effectiveness in finding, recruiting and nominating new talent as only adequate or less than adequate. CEOs and senior staff perceive lower levels of trust. Just 27 percent of senior staff and 25 percent of CEOs reported that their boards were very effective at building a leadership culture of trust, compared to 53 percent of supervisory committee members and 44 percent of board members. Previous Next

< Back Make Your Voice Heard Jennie Boden Nov 17, 2023 Speaking up can be scary, especially if you’re the only woman in the room, but it’s important to call attention to problematic behavior in the workplace. I recently observed credit union CEO introduce a new, young, female staff member to a predominantly male board of directors. The male board members lined up to welcome her—a new staff member they hardly knew—with a hug. In my follow-up conversation with the board chair and CEO, I was amazed to find that the male board members, as well as those in leadership, didn’t seem to realize there was anything wrong with this interaction and how they were collectively objectifying the new staff member. Though we have undoubtedly made significant improvements in moving towards gender equity, power differentials between men and women—particularly in governance and leadership spaces—are still painfully real. I see this regularly in my interactions with credit union boards and leadership. This spring, I facilitated a session with another board where there was only one female director. This female board member, who also served as the chair of the governance committee, absorbed all the tasks being delegated to her by her fellow board members, all of whom were men. No one else was taking ownership of any of the to-dos coming out of our working session. Again, I talked with the board chair and CEO about my concerns in a follow-up session. These two situations are teaching moments for women in traditionally male-dominated spaces. While the credit union sector has taken steps to diversify its leadership, most board members in our field are still white men. Many of them are older as well and unaccustomed to reflecting on how their actions and habits resonate in spaces with women in leadership roles. Gender bias, or gender-informed behavior, can happen under even the most kind, thoughtful, open, progressive leadership. It can happen with male and female leaders. It can happen even if you have eliminated traditional, gendered power dynamics in your personal relationships. I’ve also worked with male leaders who are willing to reflect on how women are—or are not—set up for success as directors on their board or as members of their staff. In meetings, they’ve reflected on their role as leaders and how they could do better to eliminate power differentials in these spaces. Unfortunately, these conversations often stay just that: conversations. When we face these types of scenarios, it can be difficult to speak up. Sometimes the best way to address the problem is with a follow-up conversation. It’s wonderful when we can speak up in the moment, but we women often lose our voices even when we know something isn’t right and when we know we should say something. We’re afraid of being seen unfavorably by male-dominated leadership, of being passed up for opportunities, of being considered “difficult.” I know these challenges very well, and such fears are not unfounded. As Francesca Gino writes in Harvard Business Review , “Speaking up can also result in negative performance evaluation, undesirable job assignments, or even termination. Most people are aware of these potential costs; as a result, most stay quiet about bias, injustice, and mistreatment.” However, psychologist Catherine Sanderson, writing for Greater Good Magazine , deftly explains why inaction is both contagious and dangerous. She says: “When facing an ambiguous situation, our natural tendency is to look to others to figure out what’s going on. But here’s the problem: If each person is looking to the people around them to act, and no one wants to risk feeling foolish and embarrassed, the problematic comment or behavior may be left unchallenged.” While I know it can be challenging to make your voice heard in these situations, take a moment to find your power. This power can be in yourself—in speaking up—or even in just interrupting the moment by saying “Hmmm,” while you consider what to say next. It can be in allies you have in the room, who can help you hold others accountable. That power can manifest in so many different ways. You can gracefully redirect tasks that are being piled on a female colleague to others in the room who can take them on. You can stand by a junior colleague who has become the target for inappropriate behavior to serve as a buffer and demonstrate solidarity. You can gracefully share that specific behaviors are inappropriate. And, as was mentioned earlier, if action isn’t possible in the moment, small gestures—even after the fact—can go a long way. Changing workplace culture is hard work. But you can be the change you want to see. Find your voice and speak up! 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