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< Back The Origin Of Civility Michael Daigneault Mar 22, 2016 Be sure to disagree in an agreeable way. I’ve been thinking a lot lately about the word civility. And unless you live under a rock, you can likely understand why . Frankly there’s a significant lack of it in the public sector. It concerns me, and my guess is that it concerns you, no matter what your party affiliation. What does this lack of civility mean for us as a country? For how we will govern ourselves in the future? What lessons are we teaching our children? What lessons are we learning ourselves? Surprisingly enough, this same word – civility – has been surfacing more and more as we think about our work with credit unions and others in the nonprofit sector. Because I’m a life-long learner, I decided to take myself back to school on the notion of civility itself. The word’s origins stretch back to the late 14th century, when the French used the word “civilite” to denote the “status of a citizen,” and the English translated the word as “courtesy.” But it is the Latin derivative of the word that surprised and delighted me the most – “civitatem” was defined as both “the art of governing” and “courteousness.” Isn’t that perfect? Isn’t that what we all need on our boards – a little more focus on the “art of governing” and more “courteousness?” I won’t bore you with a long list of boards behaving badly, but I would like to share with you a few examples that we’ve experienced recently. We’ve: seen board members texting each other, under the table, in the middle of board meetings; interviewed board members who said they felt like they “had a target on their back”; witnessed others interrupting their colleagues and shouting to get their points across during the middle of meetings; and heard staff describe conversations where board members are approaching them to get the “dirt” on their CEO’s performance. I’m not suggesting behavior like this is rampant or that it exists on all boards, nor am I suggesting that a normal amount of give and take, or even conflict on a board isn’t healthy. It is. In fact, boards that experience absolutely no conflict, or those that are in complete harmony, are just as dysfunctional as boards that are always in conflict (see the graphic at the beginning of this article). There is a balance. Just like in a good marriage, an appropriate degree of conflict is necessary. You just need to be sure that you’re disagreeing in an agreeable way. But even if your board is the healthiest board in the world, our research indicates that there is still room for improvement…for greater civility…to sharpen your focus on the “art of governance.” One in five board members that we surveyed for the 2016 Quantum Governance Compendium reported that their board is doing a less-than-effective job at building a leadership culture of trust, and that same survey reports that less than 25 percent said that they are very effective at asking the hard questions that need to be asked. So, then, what does that mean? Look around you. One in five of your colleagues isn’t feeling the love; a high level of trust is not resonating at the board level. And only one in four of your colleagues thinks that you’re asking the right questions in the boardroom. I know. This post sounds like it’s full of doom and gloom. That certainly wasn’t my intent. But it is a wake-up call. Increase the civility in your boardroom – in the Latin sense of the word. Be more courteous. Sharpen your focus on the “art of governance,” while you push yourselves to have the hard conversations that leading a credit union in today’s competitive environment demands. I am not suggesting that you practice the “art of governance” at the risk of foregoing your responsibilities as a board member or that you should stifle your dissenting opinions to keep the peace. The “art of governance” is not about being nice and passive in your boardrooms. But, don’t confuse strong leadership with being discourteous, unprofessional or disrespectful. The true art of governance is about being in the middle of the bell curve, with a good and healthy balance of open and challenging discourse in an environment where everyone plays respectfully in the proverbial sandbox. Previous Next

< Back More Listening, Less Mansplaining Jennie Boden Mar 22, 2022 In the boardroom and everywhere, it's important to hear all voices. I was recently facilitating a retreat for one of our credit union clients when one of the board members—a male board member—started going toe-to-toe with me on the subject of good governance. Really? I thought to myself. Okay, let’s go . I’ve been a professional in the national not-for-profit sector, focusing on governance, strategy and C-suite management issues, for almost 30 years. And I’ve been working specifically in the area of credit union governance for almost a decade. I’ve probably interviewed more credit union board members than, well, most everyone, and I’m an author of The State of Credit Union Governance studies published by CUES and Quantum Governance. I help assess and review governance data from 50 or 60 credit unions every year … every year . Now, I’m not trying to boast. But I am saying that I know my way around a discussion on credit union governance. Apparently, however, my male client knew more. The term mansplaining is relatively new—it first appeared in a Los Angeles Times piece in 2008—but the concept, of course, is not. The phenomenon of mansplaining is so common that it even now appears in the Merriam-Webster Dictionary and is officially defined as “when a man talks condescendingly to someone (especially a woman) about something he has incomplete knowledge of, with the mistaken assumption that he knows more about it than the person he’s talking to does.” For many women, mansplaining is a frustrating, recurring part of their professional lives, regardless of their position or tenure. While some may be tempted to call mansplaining a mere annoyance—or invoke gendered stereotypes that women are “too sensitive”—the impact of mansplaining behavior goes much deeper than words. In the boardroom, it can be a clear signal that a board member’s expertise is discounted and, according to the Society for Human Resources Management , it can even affect the way board members are nominated and selected for committees or leadership roles. Mansplaining in the Credit Union Boardroom So, why is this particularly relevant among credit unions? We know that credit unions have made significant progress in diversifying their boardrooms, especially as compared to other sectors: 36% of credit union board members are women, whereas women hold only 25% of board seats in Fortune 100 companies, according to a 2018 report by Deloitte and The Alliance for Board Diversity of America. Yet, even at 36%, women are still significantly underrepresented in our credit union boardrooms, which remain male- (and white-) dominated spaces. Much more work remains to be done to improve gender diversity in the boardroom to ensure that boards truly reflect the communities they serve. As most women know, mansplaining happens everywhere: It begins on the playground and carries through to the boardroom. But it doesn’t stop there. In fact, the concept of mansplaining is so universal that in 2016, a union in Sweden temporarily set up a hotline for workers to report incidents of mansplaining and seek counsel from professors, authors and other gender experts on strategies for dealing with this condescending behavior! Even the BBC offers a flow chart to help readers identify mansplaining even when they may not realize it’s happening to them! As we encourage boards to reflect on and improve their own diversity, we know that many credit unions will recruit new directors who don’t necessarily have banking or accounting backgrounds, but who are bright, driven leaders in their fields. They are strategic thinkers who are ready to learn more about what the credit union does. This diversity—both in terms of gender and racial background and also professional expertise—undoubtedly helps advance a credit union’s service to its members not only by ensuring a strong “ear to the ground” but also by deliberately crafting a leadership group that brings diverse experiences, skills and viewpoints all to strengthen the decisions made in the boardroom. Board members with prior sector experience will, naturally, lead in helping their new colleagues develop a greater understanding of the credit union and their responsibilities as board members. In fact, we encourage it. In offering guidance, however, it’s important to remember that your support should be offered in a way that’s conducive to learning and recognizes your new colleagues’ own talents and expertise versus sharing your own knowledge in a way that is condescending, meant to intimidate and discredit. Board members of all tenures and backgrounds should approach their role with what David Smith , an associate professor of practice at the Johns Hopkins Carey Business School, calls “healthy doses of humility and a learning orientation.” Smith also notes that a “prove it again” bias that women often experience “questions their competency by having them continually prove that they have the experience and ability to perform. Most men do not experience this bias as it is usually assumed that they are competent, and they are advanced more often on potential.” While this observation is based on his experience in the U.S. Navy, a credit union boardroom—a similarly male-dominated space—can also encourage these dynamics. How to Move Past Mansplaining How do we recognize and move past the mansplaining we observe in the boardroom? Smith’s research found that what women most appreciated in male mentors and allies was their capacity to listen—which Smith summarizes as “generous listening with an intent to understand and not fix her or fix her problem.” Recognizing the root impulse for this is also important: “As it turns out, many of us as leaders are socialized to be problem-solvers. We listen to a colleague until we discern the problem and then tell them how to fix it.” (Read more on this from Smith in “ More Listening, Less ‘Mansplaining’ Make Men Better Allies to Women Co-Workers .”) In the credit union boardroom, where we find various levels of expertise in accounting or banking, but a steadfast desire to learn, this is equally important for male colleagues to internalize. What are some other key strategies for creating inclusive, welcoming, and respectful spaces? Arin N. Reeves, Ph.D., of the University of Michigan offers a few suggestions : Create and use agendas for meetings to define intentions, decrease interruptions and offer clarity on who should be speaking and why. Adopt a “take turns” approach in meetings; it will provide additional structure around who should be speaking and offer all participants an opportunity to give their perspective. Separate “divergent thinking” (unstructured brainstorming and idea generation) from “convergent thinking” (idea analysis and decision-making) to prevent unwanted interruptions and allow for women’s voices to be included as an active part of the leadership and decision-making process. Speak up! We can all recognize the symptoms of “mansplaining,” and if we can respectfully call out and encourage reflection about this behavior, we can create more respectful, productive and effective board and committee meetings. We all know that there are challenges to recruiting board members. Don’t make the mistake of not fully appreciating or realizing the full potential of your board members by silencing those voices that will help to further the vision and mission of your organization. Previous Next

< Back Dealing with Divisive Directors Jennie Boden Jun 27, 2023 Honor the principle of democratic member control even when you need to remove a board member. Like a lot of things in life, governance challenges seem to come in threes. There was the year that we had three clients struggling with their representative boards. Last summer, the trials were three different mergers and acquisitions. This spring, three of our clients have been grappling with how to hold a problematic board member accountable. And not just problematic board members, but very problematic ones. We’ve seen this before—and not just in threes. Let me begin by saying that, as a believer in exceptional governance, I value the cooperative principle that “credit unions are democratic organizations owned and controlled by their members. One board member equals one vote, with equal opportunity for participation in setting policies and making decisions.” But sometimes you run into a board member whose presence completely derails the democratic process. What to do when removing such a member would actually improve governance, the operation of the board and contribute to stronger organizational outcomes? The Principle of Democratic Member Control: Pretty Drastic The democratic member control principle drives three of the paths available to credit union boards when they believe that it’s time for one among them to leave their ranks. (These are the options available to federally-chartered credit unions as outlined in National Credit Union Administration federal credit union standard bylaws. Additional options may be made available for state-chartered credit unions by their regulators.) Article VI. Board of Directors, Section 8. Attendance and removal. a. If a director or a credit committee member, if applicable, fails to attend regular meetings of the board or credit committee, respectively, for 3 consecutive months, (choose one of the following) ____ or 4 meetings within a calendar year, or ____ 4 meetings within any 12 consecutive months or otherwise fails to perform any significant duties as a director or a credit committee member, the board may declare the office vacant and fill the vacancy as provided in the bylaws. Article IX. Supervisory Committee Section 5. Powers of supervisory committee—removal of directors and credit committee members. By unanimous vote, the supervisory committee may suspend any director, board officer, or member of the credit committee. In the event of a suspension, the supervisory committee must call a special meeting of the members to act on the suspension. They must hold the meeting at least 7 but no more than 14 days after the suspension. The chair of the committee acts as chair of the meeting unless the members select another person to act as chair. Article XVI. General Section 3. Removal of directors and committee members. Notwithstanding any other provisions in these bylaws, any director or committee member of this credit union may be removed from office by the affirmative vote of a majority of the members present at a special meeting called for the purpose, but only after an opportunity has been given to be heard. If member votes at a special meeting result in the removal of all directors, the supervisory committee immediately becomes the temporary board of directors and must follow the procedures in Article IX, Section 3. These are drastic paths to have to take, and they put into play reputational risks for both the board member and the credit union. But there are other options besides the most drastic ones. Other Pathways, Starting With Accountability The name of the game, ultimately, is accountability—setting clear roles and responsibilities through the development of both board member and officer job descriptions (I encourage you to develop job descriptions for the supervisory/audit committee chair and members too); outlining expectations for behavior in a board member covenant and even a code of ethics that applies to everyone throughout the credit union, from the board to the tellers; and implementing accountability mechanisms to ensure that everyone is doing their job within the boundaries of the covenant and the code. But what do you do when that fails you? Here are some tried and true steps that you can take, in increasing order of seriousness: Solicit the help of the board member’s trusted peer (or peers) for a private conversation to address the behavior. Schedule a formal meeting between the board member, the chair and another board officer to address the behavior. Outline the offending behavior in a written reprimand letter, asking the board member to correct their behavior immediately. Call for a written apology from the board member to those offended. Require formal sensitivity/or related content training. Prevent the board member from participating in any trainings, conferences or seminars paid for by the credit union until select steps (such as those outlined above) are complete and the behaviors are corrected. Provide a copy of the written reprimand letter to the governance and nominations committee to inform the nominations process. Institute peer-to-peer evaluations and provide a copy of the board member’s results to the governance and nominations committee to inform the nominations process. And for especially serious cases: Stipulate that the board member will be formally censured or that their resignation would be called for unless select steps (such as those outlined above) are complete and the behaviors are corrected. Note to the board member that formal censures and/or a vote for their resignation will appear in the credit union’s public minutes. It’s Worth the Effort to Manage Divisive Directors I can tell you that all our clients who have adopted any number of the steps above did feel a sense of relief ultimately, as hard as it might have been. In most instances, the board members simply resigned, knowing that it was best for them as individuals and ultimately for their credit unions. While no process is ideal, and we at Quantum Governance certainly want you to honor and adhere to the principle of Democratic Member Control more than anything, sometimes a bully or undemocratic individual acting in bad faith needs to be stopped. Sometimes, that board member who refuses to adhere to the credit union’s policies must simply be shown that their behavior is unacceptable. And sometimes, their behavior becomes so antithetical to the very essence of a cooperative that you don’t have much of a choice. 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Michael Daigneault Founder & Lead Consultant Michael is a renowned expert on governance, strategy and ethics and has channeled this more than 35 years of expertise into a uniquely personable, engaging and authentic consulting and presentation style. Michael along with his wife founded Quantum Governance over a decade ago with the mission to improve the effectiveness of board and executive leadership through governance and strategy. Michael is a nationally recognized keynote speaker and published author on governance, strategy and ethics in both the credit union and nonprofit fields. Prior to founding Quantum Governance, Michael was President of the Ethics Resource Center (ERC) – the nation’s oldest, independent ethics center. During his tenure, the ERC launched the ERC Fellows Program; developed ethics centers in the United Arab Emirates, South Africa and Colombia; and spearheaded the rebirth of the National Business Ethics Survey. Michael also served as the Executive Director of the American Inns of Court Foundation, a nonprofit dedicated to enhancing the skills, ethics, civility and professionalism of judges and lawyers. Michael is a three-time graduate of Georgetown University, holding a B.A. from the College in Philosophy, and both a J.D. and a Master’s Degree from the Law Center. He lives in Virginia with his family. Back

< Back On Being the Female Chair Leading a Predominately Male Board Gisele Manole Aug 25, 2022 Two female board leaders share their experiences and advice for promoting good governance—especially, but not only, as representatives of a minority demographic. Being in a leadership role—as a credit union board chair, for example—can be lonely at times. Sitting in the chair’s seat certainly puts you in a place of distinction. After all, you have been selected from among your fellow directors to lead them in their leadership role. So, consider the task of leading when you are from a traditionally underrepresented demographic—and say, for the purposes of this conversation, you are a woman leading a predominantly male board. I recently had the chance to connect with two women who shared with me some leadership advice for other women facing just this situation. What they said wasn’t at all what I expected. I anticipated hearing their perspective on having to do it better, faster and smarter than their male counterparts. But instead, their words struck a more nuanced and universal tone that stretched beyond gender differences. Don’t Wait to Be Invited A former CUES board member, Gerrianne “Winky” Burks can count herself among the trailblazers in the industry. After a 40-year career at $4.3 billion Northwest Federal Credit Union , Herndon, Virginia, the last five of which she served as CEO, she currently serves as the board chair. Burks’ advice is this: “Don’t wait to be invited to participate on a board or committee. You may be in the minority as a woman, but you bring a perspective that holds real value. “It’s so different now than when I started out,” Burks observes. “Now there is greater value placed on having a different perspective from the rest of the group. “I followed a male board chair, and frankly, I just did things a little differently than he did,” she adds. “Our communication styles, for example: My meetings may run a little longer, because I really want to hear from everyone in the room. I feel that is important. Neither style is better than the other, and the credit union has benefited from our different styles for many years.” Change Things Just Enough CUES member Janet Burgett Martin, board chair of $625 million Copper State Credit Union in Phoenix, has spent the last two years in the role of chair and recommends changing things up too. “For those new to the board chair position, I highly recommend you change the agenda so that the board understands that there’s new leadership.” Martin shares that she added a “mission moment” at the beginning of board meetings to recognize individual staff accomplishments. “This could be a member letter thanking an employee for excellent service or an award an employee received. It starts our meeting off on a positive note for both the board and staff in attendance.” When faced with assumptions or stereotyping, Martin recommends dealing with those challenges head-on when they first present themselves. Don’t wait to see if the presumption affirms itself, she advises. Find your voice and address it immediately and directly. “In my experience, when you make your expectations clear, presumptions correct themselves quickly. I am very direct but I also lead with compassion and enthusiasm,” she says. Both Burks and Martin stress the notion of being authentic. Burks says that while it may seem obvious, “[The other directors] don’t know what you know. I think that women have gotten much more comfortable in presenting their own thoughts. I pay attention to our board meetings being a place where everyone’s thoughts and ideas are invited.” While Martin encourages all board members to participate to make meetings more productive, she says “[I] always put it upon myself to be prepared by studying the full packet.” Participation requires preparation, and strong leaders model behaviors that they expect from others, she says. Add Your Takeaways to This Starter List As more and more women engage in credit union board service and rise to leadership roles within the industry, their collective learning will continue to grow. Here are some takeaways for developing leaders. Contribute your own advice in the comments section below. Don’t wait to be invited. Share your thoughts and perspectives now! Change things up and be intentional about it. Be authentic and clear in your expectations. And then hold your colleagues to them. Be prepared and model the commitment and behaviors you expect from your colleagues. 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 A Deep Definition of Governance Michael Daigneault Jun 3, 2015 How does your board use its formal and informal authority for the good of the credit union? While there are as many definitions as governance as there are consultants in this world, here at Quantum Governance , we believe that governance ultimately deals with the legitimate distribution of authority throughout a system--whether it’s a country, a corporation or a nonprofit like a credit union. We believe governance is ultimately how organizational leaders use both the formal and the informal authorities vested in them. How they think, make decisions, develop strategy, persuade, develop future leaders, structure their board and execute initiatives. How they communicate with key stakeholders ... with their staff … with their customers … with their marketplace … with their constituents … and even with each other. Good governance also applies to how your board oversees your CEO; tracks its own performance and the CU's results; conducts its budgeting process; allocates its resources; addresses membership or constituent needs; moves in and through its community; adheres to ethics and financial integrity standards. And, yes, good governance is even about thinking in a genuinely strategic manner. There are some who say “good governance” centers on legal issues--bylaws and conflict-of-interest policies--and how an organization’s board oversees its audit process. But at Quantum Governance, we ask our clients to look much deeper, to how well the board is doing on the many aspects of governance outlined above. Previous Next

< Back Board Size Michael Daigneault Jul 28, 2015 There's no one-size-fits-all answer to how many directors you need. One of the questions I’m asked most often by credit union directors and CEOs is this: “What’s the best size for our credit union board?” There’s no fast and easy answer but, essentially, you want your board to be large enough so you can appropriately govern and help lead the credit union, and yet small enough so you function effectively as a cohesive leadership team. For your credit union, what size might that be? Our experience is that credit union boards of seven, nine or 11 appear to be most effective. Here is the essence of our reasoning: Boards of five or fewer are efficient but committee work, diversity and inclusiveness may suffer. With five or fewer members, the work of the board tends to be accomplished as a “committee of the whole.” This framework may be sufficient for certain small or relatively uncomplicated credit unions, but it quickly becomes a very real and limiting factor when considering how much work a small board can realistically accomplish. While we do not believe credit union boards should have an excessive number of committees, it does increase the board’s capacity to accomplish vital work when directors can divide themselves into a few committees and task forces. Having committees and task forces also helps develop a somewhat larger group of volunteers who can be potentially called upon to become board members in the future. Additionally, credit unions are cooperatives of many different types of people. What very small boards of five or less offer in terms of ease and efficiency, they typically lose in terms of diversity and inclusiveness. This lack of diversity is evident not only in terms of gender, nationality and race, but also will likely result in a lack of individuals who are of a different age or who can bring additional, valuable skills, perspectives, experiences, and the like to the board’s efforts. Boards of 12 or more can be complicated to manage, can pose challenge to trust-building, can be more expensive to run, and can make it harder to gain true consensus. Boards of this size do exist in the credit union community, but they are rare. They often arise for such reasons as : (1) mergers and acquisitions that combine two boards; (2) a desire to offer more members the opportunity to serve; (3) a lack of will or desire to “kick” long-term colleagues off the board as new members are added; and (4) a “representative mindset” that supports having a board with folks from a variety of stakeholder groups or geographic areas. If your board is on the larger size, do not let the executive committee become a “board within the board.” It will upset the balance of power, and often results in an “insider” vs. an “outsider” dynamic that can cause some directors to be too passive or disengage altogether. In all, size is a nuanced question, with a nuanced answer. The exact size that’s best can shift from credit union to credit union depending on many factors, such as the role the board is playing, the number of board committees, the complexity of the credit union, the history of the credit union, and the quality of its leadership. In the end, keep in mind that the role of your credit union’s board is to govern in constructive partnership with your CEO. In most circumstances (as long as you remain in the sweet spot of between seven and 11 members), the exact number of board members ends up being less important than your directors’ collective ability to work effectively, add real value and help move the mission of your credit union forward. Previous Next

< Back To Pay or Not To Pay Michael Daigneault Sep 22, 2015 Deciding whether to compensate credit union and CUSO directors is a hard question. There’s been a lot of buzz recently about whether credit union board members should be compensated. For a long time, this notion was taboo. For many, it literally seemed to go against the very essence of a cooperative credit union. Then the idea of compensation seemed to shift from being taboo to being merely uncommon. Though federal credit unions can provide compensation only to one member of their board, usually the treasurer, some state-chartered credit unions may compensate more broadly. A recent study published by Filene Research Institute (and underwritten by Quantum Governance and CUES, among others) notes that there has been a new and significant shift, with many beginning to support the notion of paying their boards, “with some even believing that doing so would soon be crucial to their ability to attract and retain effective board members.” The study, aptly titled Should Credit Unions Pay Their Directors? , goes on to report that “At 145 credit unions in 12 states, directors earn somewhere between $60 and $37,597 annually.” The report’s author, Matt Fullbrook, manager of the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto’s Rotman School of Management shares that while “In most states, credit union director compensation is dwarfed by fees paid to directors of commercial banks …the pay trend is slowly catching on, especially among large credit unions.” On the one hand, such a trend makes some sense. Credit unions deserve engaged board members who feel appreciated and perhaps, at times, fairly compensated for their significant efforts. They bear significant burdens. They are, for example, legally responsible in ways that even the CEO isn’t. And I don’t have to tell you that there is a lot at stake: millions of dollars in assets for most credit unions and even billions for an increasing number in this age of consolidation. Credit unions need the best and the brightest board members to meet the tremendous challenges of the day, but it has become increasingly hard for many credit unions to recruit high-quality, dedicated directors. If compensation can help in that regard, perhaps it is one tool that should be utilized. Yet on the other hand …there is a rich tradition of board members serving their fellow members in a voluntary capacity. Indeed, you and your colleagues are in the business of running a cooperative credit union on behalf of your members. What About CUSO Boards? Like a credit union board member, directors of credit union service organizations are tasked with providing good governance, effective oversight, strategic vision and the like. But unlike credit union board members, they are guiding for-profit entities. And therein lies a very significant difference. CUSOs were created as “outside-of-the-box” business solutions – creative ways for credit unions to effectively address effective business needs. One argument for compensating a CUSO board certainly is that in order to attract and retain the most creative, “out-of-the-box” thinkers, compensation is a must. But as in the credit union community, there are also cons to the practice of compensating CUSO board members, many of whom are credit union CEOs themselves. That con list includes: the argument that the CEOs are already handsomely compensated by “the community”; that while the CUSO is a for-profit entity, it exists to serve a cooperative community and should, therefore, follow cooperative principles; and that it may send the wrong message to credit union members or the community, among others. The long and the short of it is this: There is no simple answer to the question for either credit unions or CUSOs. The notion of compensating a CUSO board (despite its for-profit status) can be just as perplexing. What I can tell you is that for both credit union boards and CUSO boards, answering the compensation question does require a board that doesn’t shy away from asking the hard questions. All of us should consider the long-term implications, as well as pros and cons of compensation at the board level, and dig deeper to find common ground on this challenging issue. Previous Next

Strategy Resources Double Your Fun: Tracking Strategic Planning For a Brighter Future Read More In Search Of The Strategic Board Discover how credit union boards can become agile strategic partners and lead their institutions to future success. Read More The Need for Evolution: One of Today’s Central Governance Challenges If your credit union has grown have you re-considered the balance of authority between your board and CEO? Read More Why Directors Are Chess Pieces, Not Checkers Every director should be ‘chair material’—even if they wouldn’t make a good chair. Read More The Concept of ‘Constructive Partnership’ Collaboration, more than control, fuels today’s high-performing boards. Read More Coming Together for the Common Good Consider multiple perspectives and build consensus— not unanimity—to ensure your CU is making good decisions. Read More An Antidote For Shifting Sands Your strategic planning process is as important as the plan and should be ongoing. Read More Advice from My Hero Six key responsibilities of every board, gleaned from my conversation with world-renowned expert Ram Charan. Read More 5 Data-Driven Recommendations for Governance Success Core Recommendations from a New Report Read More Help Your New Chair Move Up Here's what a top board leader needs to know to be successful—and what you need to know to help. Read More ERM Is Everyone's Responsibility 10 steps to take to ensure your leadership is doing all it can to identify and manage risk Read More Moving Beyond The Strategic 'Moment' Incorporate strategic planning and thinking into your routine discourse. Read More Fiduciary AND Strategic Thought Needed Finding the right balance between operational oversight and visionary dialogue in your boardroom is worth the struggle. Read More

The Michael G. Daigneault Excellence in Governance Grant The Michael G. Daigneault Excellence in Governance Grant honors our Co-Founder Michael G. Daigneault and his continued commitment to developing exceptional leadership in mission-driven organizations through governance excellence. This grant initiative aims to strengthen the governance effectiveness of nonprofits and credit unions, providing them with the tools and advice they need to drive positive, lasting change throughout their organizations and enhance their impact on the communities they serve. The grant provides one credit union ($250M in assets or less) and one charitable nonprofit (operating budget of less than $5 million annually) with a pro bono Governance Assessment inclusive of the following: a proprietary online governance survey a report comprised of survey data and expert recommendations based on survey results a facilitated workshop for the board and executive leadership resources such as policies, job descriptions, charters and more How to Apply Guidelines Before you apply, take a look at the eligibility requirements and timeline. Funding Guidelines & Timeline Application The application window for the Michael G. Daigneault Excellence in Governance Grant is May 4, 2026 through June 30, 2026. You can start your application, save it and return to complete it at your own pace. Click Here to Apply Today Questions? If you have any questions, please use the form below or email gisele@quantumgovernance.net Contact Us About Michael G. Daigneault Michael brings more than 45 years of governance, strategy and ethics expertise to boards and C-suite executive leadership of nonprofits, credit unions, governmental entities and other organizations of all shapes and sizes. He is credited for developing a proven methodology for assessing governance and strategy, including a proprietary survey tool for a variety of organizational types. Prior to founding Quantum Governance, Michael was a Senior Governance Consultant for BoardSource studying and advising nonprofit board leadership and Director of Advisory Services at DeLeon & Stang, a preeminent business management and accounting firm. Michael was the Founder and President of Ethics, Inc. – a private consulting and training firm specializing in business ethics for the private, nonprofit and public sectors. He also served as President of the Ethics Resource Center (ERC) in Washington D.C. Michael is a three-time graduate of Georgetown University, holding a B.A. in Philosophy from the College and a J.D. and a Master of Law from the Law Center. He was the first person to graduate from the Law Center with a Master of Law with a concentration in Legal Ethics and Professional Responsibility. A lifelong learner, Michael went on to complete the Corporate Governance Training Program at the Columbia Business School in 2021. Statement of Confidentiality: We will keep all information learned in this application process confidential. No information will be disclosed to any third party unless compelled to do so by law or regulation. Notwithstanding the foregoing, we may disclose information to our authorized contractors with an obligation to maintain confidentiality (e.g., Alchemer and data entry personnel) and personnel with a “need to access'' such information in order to review the grant applications.

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