< 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 Into the COVID-19 Fire to Make Things Better for Members and Staff Caitlin Hatch Apr 3, 2020 A strong alignment of the CEO, senior leaders and the board enabled early, effective action. We were talking with one of our clients, F&A Federal Credit Union in Monterrey Park California, the other day and were struck by their early, decisive actions in the face of the COVID-19 pandemic. (F&A was chartered in 1936 to provide financial services to employees of the Los Angeles County Forestry, Fire and Agricultural Departments.) We soon learned that the decisiveness in responsive to the coronavirus situation was the result of a combination of a well-thought out pandemic response plan and the courage to act when some might have argued that it was too early to do so. F&A FCU’s actions were made possible by a strong governance culture of trust between the credit union’s board and CEO Tim Green and his management team, all of which enabled Tim to make some tough, early calls. Tim told us that by late January he was concerned enough about the likelihood that the virus would impact the United States that he decided to implement the credit union’s pandemic response plan. As Melia Keller, VP/marketing notes, “Tim a visionary on this … the need to prepare for a quarantine. It was really hard to fathom. We ordered laptops and set them up to work remotely, came up with a communication plan, prepared for kids being at home, employees working remotely and identified people of a higher risk and started them working from home right away.” And, the board was supportive of it all. In February, F&A FCU developed and prepared call center scripts and emergency member communications, Melia told us, “We had a communication plan in place, with scripting for outbound messaging. It all emphasized caring for the member. That has really differentiated us. We approached everything from a perspective of compassion and humanity.” Lastly, and perhaps most importantly, the credit union focused on ways to make things better for its members and its employees. It developed programs to meet the members’ needs, including loan deferment through enhanced skip a pay, the waiving of loan late fees, and a short-term 0% APR loan of $5,000 for any member impacted by COVID-19—regardless of credit score and knowing some loans may not be repaid. Employees are empowered to help where they can, and for one desperate member, this meant F&A FCU even provided a couple of rolls of toilet paper at the drive-through window. For employees, Tim initiated a short-term 30% raise and offered 40 additional hours of paid time off to use as needed. For employees working in the branches (one is drive-through only, the other has limited teller hours), the credit union caters lunch, so they don’t have to go out. They even gave each staff member two rolls of that precious toilet paper from the credit union’s supplies! According to Tim, the goal was similar to the goal of its firefighter members: to make things better. “Everything was pre-planned, except the toilet paper and the decision on the 30% temporary pay adjustment,” he said. Tim felt confident that he could make that command decision and that the board would support it—and indeed it has. Tim noted to us that COVID-19 “has crystalized our values without us having to talk about it. We are the ones who are there for you.” It struck us that the F&A FCU leadership—board and staff – were running “into the fire” of the COVID-19 pandemic, ready and able to help its members, just as its own firefighter members are ready, willing and able those in need. The CU’s preparation, shared dedication to service and, perhaps most importantly, culture of trust (even though Tim is a relatively new CEO) have been invaluable for F&A FCU members. 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 Did You Dust Off Your Old Pandemic Plan? Michael Daigneault and Jennie Boden Mar 24, 2020 Key ideas about response oversight and future strategy If you’re like most in this world today, you likely feel like you’ve lived a lifetime in just the last week. I know that we have. As we write to you safely from our home offices, we send well wishes to you and everyone in your circles that you are safe, well and doing what you can to “flatten the curve.” But we also know that you all have immense responsibilities. Personal responsibilities to your families and your loved ones. And professional responsibilities to your employees who are looking to your credit union for stability and, yes, a paycheck. Responsibilities, too, to your members who are counting on you to keep your doors open—or at least your drive throughs and your ATMs—so that when they need access to their funds, you are there. And eventually, they may need even more from you. In 2005, the White House, through the Homeland Security Council, issued the National Strategy for Pandemic Influenza —which addresses the threat and potential impact of a pandemic. At the time the experts issued that document, they were focused on a pandemic resulting either from a flu strain that existed then in birds or another influenza virus. The National Strategy is still very relevant, and it outlines how the government prepares, detects and responds to pandemics of all kinds. It is still in use today. “It also outlines the important roles to be played not only by the federal government, but also by state and local governments, private industry, our international partners and most importantly individual citizens…” It states that the “private sector should play an integral role in preparedness before a pandemic begins and should be part of the national response.” A few short months after the federal plan was released, the National Credit Union Administration issued a guidance letter in March 2016 stating that “credit unions and their service providers supply essential financial services and, as such, should consider their preparedness and response strategy for a potential pandemic.” It went on to say, “The National Strategy addresses the full spectrum of events. The main components of the National Strategy address: Preparedness and Communication; Surveillance and Detection; Response and Containment.” In 2007, the Federal Financial Institutions Examination Council issued its own guidance through the Interagency Statement on Pandemic Planning , which was just updated earlier this month due to the current COVID-19 Pandemic. If you’re like most credit unions, in response to all of this guidance and these recommendations, someone at your credit union prepared a pandemic response plan back then, and put it on the shelf, thinking that you’d never in a million years need it. Well, a million years has come to pass. We spoke just a few days ago with the CEO of a $500 million credit union who remembered that her staff had developed a pandemic response policy some time ago, and they “dusted it off” (her exact words) and put the policy into motion. To her relief, so far it has been working well for her credit union. Some of the specific elements of that credit union’s implementation plan include: Any employee who has remote work capabilities is required to work from home until further notice. (This includes at least one employee from every department, as well as multiple call center employees). All branch lobbies are closed until further notice, with only drive-thru options open. Additional deep cleaning services have been contracted for all facilities. Additional technology has been purchased to support increased remote capability. New member products and services have been created including a new short-term loan product, a low interest rate, no down payments, no documents required, reduced restrictions on skip-a-pay loan program, etc. A communications program has been implemented to reach members via email, social media, website and on-hold messages. The credit union has contracted with CUES Supplier member CO-OP Financial Services , Rancho Cucamonga, California, to provide overflow call center support, if needed. An emergency sick leave policy has been created and enacted. If you don’t have a pandemic response policy, you are likely developing the components of your policy as you respond each and every day to the mounting issues that confront you. Ensure that someone is memorializing the good actions that you take as you move through this crisis so that you can thoughtfully, when we all come out of the pandemic on the other side, translate your actions into a comprehensive, cohesive policy. And very, very importantly, ensure that the overarching framework and strategy of your plan is developed in constructive conversation with your board of directors. Does this mean that the very detailed elements of your plan, i.e., what does deep cleaning mean or which individual employees should be designated to work from home, should be approved by your board? No. But it does mean that the overall, strategic approach of your plan should be developed in discussion with your board and that your board should ultimately approve the key principles underlying your pandemic response plan. If it’s been a while since you “dusted off” your pandemic response plan, consider this template that we’ve crafted and take a look at the National Strategy, both of which we hope will provide some support and direction to you and your credit union’s leadership (board and management alike). Stay well and stay safe. P.S. Be sure that you and your Board are staying up to speed on all of the regulatory updates regarding COVID-19, including those impacting annual meetings and board elections! 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 Key Outcomes And Lessons Learned From A Board Renewal Effort Jennie Boden and Dr. Alexander Stein of Dolus Advisors Jan 31, 2022 An analysis of Hudson Valley CU’s work to revise key governance processes. Quantum Governance and Dolus Advsiors are pleased to offer the following key outcomes and lessons learned from our work with $6.1 billion Hudson Valley Credit Union in revisioning and revising their nominations process. (For more background, read the feature story detailing the work we did with Hudson Valley CU.) Key Outcomes The nominations sub-committee learned it could be nimble, coalesce around change and have a significantly increased impact on the future of the Hudson Valley CU board and supervisory committee. In the end, the members were proud of the changes they implemented and the outcome of their work. And, importantly, they served as a model on how to welcome and adapt to change for other elements of the governance system at Hudson Valley CU. There was an increased level of trust attained between members of the nominations sub-committee and the CEO—primarily through the CEO’s participation in the nominations process, but also as an extension of the still-developing constructive partnership between the board, supervisory committee and CEO/management. All the volunteers—board and committee members—gained a new and enhanced understanding of their capabilities and, despite initial trepidations, developed a significantly greater appreciation for the upsides of transformational change. The previous governance committee and the old nominations committee combined in an integrated model to become the new governance and nominations committee. This provides the credit union with the structure, know-how and horsepower to better meet its members’ needs given its size and complexity. Lesso ns Learned Include everyone in the discussions, right from the start—board members, supervisory committee members, nominations committee members, the CEO—when you’re a) discussing why and how you want to change the nomination process; and b) what the ideal board or supervisory/audit committee of the future looks like for your credit union. Cast your net wide for new candidates and volunteers. Ensure that every candidate attaches a resume or curriculum vitae to their submitted application. And be sure that you update your application to obtain the information that you need—in alignment with your call for candidates. Don’t assume that your current board and supervisory committee members are the right members for the future. Vet them as thoroughly and fully as you vet your new candidates—and against the same requirements. Prepare both the volunteers on your nominations committee and your incumbents for navigating emotionally hard decisions. Meeting the requirements of creating the board and supervisory/audit committee of the future may necessitate the departure of a long-term volunteer colleague. Ensure that the roles and responsibilities for your volunteer positions are clear, including the time commitment. Even with all the communications shared with the Hudson Valley CU candidates, several candidates expressed surprise at the level of commitment required after joining. It doesn’t have to be perfect right out of the gate. Not every tool you develop or innovation you incorporate will immediately work flawlessly. And that’s okay. Keep experimenting. One example: We developed a scoring sheet for the nominations sub-committee that ended up being more of a hindrance than a help. It was quickly set aside, and the members of the sub-committee moved on. Balance urgency and patience. A member of the governance and nominations committee admitted wishing they had developed an associate board member program years ago. But there had been resistance, and it was shelved. When the proposal was introduced last year as a part of these innovations, the practice was enthusiastically adopted. Change takes time. Prioritize equity, diversity and inclusion. Ensure that your credit union is aware of how systemic inequalities adversely affect society—and your credit union. This conscious commitment to equity will enhance organizational decision-making, lead to greater diversity around the leadership table, and help directors and executives alike develop a more inclusive, shared understanding of what everyone has to say and contribute. Alexander Stein, Ph.D . , is founder of Dolus Advisors , a consultancy that helps leaders address psychologically complex organizational challenges. Previous Next

< Back Millennials Are Many Things, Including Your Future Board Leaders Michael Daigneault and Gisele Manole Jun 26, 2018 Getting to know them can aid your recruiting. If you had a crystal ball that allowed you to peer into the future, my guess is that a number of you might use it to—among other things—help ensure your credit union’s success. Critical to any such success, however, is the answer to the question: Who sits on your Board? Perhaps one of the most alarming things we at Quantum Governance discovered in our research for The State of Credit Union Governance 2018 was that a full 46 percent of respondents describe their credit union’s effectiveness at finding, recruiting and nominating new board talent as only adequate or less than adequate. The ongoing challenge to attract the best talent to serve on your board is as old as it is evergreen. So, while a crystal ball may be helpful in identifying who holds the keys to your credit union’s future, it likely falls short of providing you with a practical means to actually recruit future board members into service—particularly the younger generations of potential board members. As anyone who has endeavored to recruit talent to their board can attest, you have to know a thing or two about who you’re looking for. So who are your credit union’s future board leaders and how might you connect with them? As the large Baby Boomer generation (1946-1964) retires from board service, Generation X (1965-1980) does not have the numbers to fill their seats. As such, the Millennial generation (1981-1996) will have to be invited to serve in leadership positions as soon as possible. Don’t underestimate them...many are ready to serve effectively right now! Millennials are, of course, a unique generation and it’s more important than ever to understand the types of things that set them apart from previous generations. They are most effectively recruited by...other millennials. You should use any millennial board, associate board, board committee and staff members you may already have to actively recruit effective new young leaders. You can also reach out to connected members of the credit union and to key players in business, government and nonprofit organizations in communities where your credit union operates. Even if you don’t know them yet, find a way to reach out, make new friends, and actively introduce your credit union to them. They are the most ethnically diverse generation in U.S. history. We often hear that boards are striving to look more like their membership. The millennial generation embodies the diversity needed to ensure that members are properly and culturally represented. They are early adopters and technologically savvier than previous generations. As your membership migrates online, so do many of your products and services. Engaging your members through contemporary, user-friendly, and secure mobile and digital interfaces will help grow your credit union and attract younger members. They are optimistic about the future and educated. Positivity fuels productivity. Millennials see possibilities and have an eye trained on the future—which is exactly where you need to set your sights in order to succeed in fulfilling your credit union’s vision and mission. Millennials are often keenly interested in professional development opportunities. You can suggest that board service is certainly a great one! They are interested in helping people and supporting causes. To date, many millennials have been relatively unattached to religion or organized politics (although that may be changing). This leaves a critical mass of them open to the social purpose and mission-centered credo of credit unions. Sure, focus on excellent products and services, but don’t underestimate the power of “cause” and the good work a credit union can do. Ultimately, inviting new ideas and fresh thinking to your board meetings will have consequences. Appreciate the renewed energy and passion it brings. Appreciate also millennials’ talents. Be patient as you work through the challenges and questions that will also arise. As you bring on new board members, it’s important to remember that a robust orientation to your credit union and board service is essential to a successful transition. We are confident you will find that millennials are a vital human and leadership “investment” for your credit union that will pay off extremely well now—and far into the future. 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 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 Some New Remote 'Norms' Are Here To Stay Michael Daigneault and Gisele Manole Aug 25, 2020 Five tips for a successful pivot to virtual board meetings At a recent credit union board retreat, we asked the group (a mix of board members and executive leadership); “How do you think the post-COVID-19 world will be different from the pre-COVID-19 world?” The answers were varied and included: More of the workforce will work remotely Better overall hygiene practices Less brick-and-mortar retail and other traditional storefront businesses Increased consolidation of the credit union field Fewer major airlines and fewer travelers We ask this question because, as they say, “the genie is out of the bottle” on so many of our new norms and behaviors. Our businesses and our culture have made a sharp turn to adapt to new laws about social distancing—a foreign concept just a few months ago. This pandemic has accelerated our transition into the digital realm. Which of the changes that we have made are likely to stick? Which ones should we adapt to craft the “new normal”? Perhaps the most immediate change our boards have had to make is switching to virtual meetings. So many boards are asking us and themselves if and how can they effectively and meaningfully conduct their work virtually? Quantum has had to make some changes along these same lines. While the majority of our work is conducted remotely, our facilitated retreats, often considered the pivotal “aha!” moment for many of our clients, had to be reinvented as virtual experiences. It was a daunting challenge but one that we attacked as a team composed of different strengths, talents and experiences. Some of us are more confident with new technologies than others. And then there was a sense of mourning for the loss of our in-person retreats. We had invested so much of ourselves over eight long years and hundreds of thousands of miles to fine-tuning our practices. Who are we without our flip charts, big stickies and colorful illustrations? How did we pivot? We practiced … a lot! We spent countless hours choreographing and rehearsing for our first virtual retreat. It is safe to say that we have successfully pivoted now that a number of our clients have commented, “I think this was actually a much better format for our retreat. We were so focused and got so much accomplished in a shorter period of time!” And, “This (virtual retreat) raised the board’s governance IQ but also our video conferencing and communication skills which will make us stronger, too.” Here are a few best practices that this short and intense period of adjustment has taught us about teamwork and conducting successful virtual meetings: While we are limited to only a virtual meeting format, make it the best possible experience. Be present just as you would be if you were seated in the same room with your colleagues. Make sure your video is on, that your face is well lit, that your sound is strong with no background noise or distractions, and that you are knowledgeable about how to use whichever conferencing platform you are using, such as Zoom or Google Meet. Come prepared in every other way and review in advance the board materials you were provided in advance. It may seem like common sense, but many board members still treat virtual meetings like “board meeting light,” as if they are in a holding pattern until they can meet in person again. This experience of continuing to operate and indeed grow your organization in a pandemic has likely already provided you with opportunities to conduct vital business and make board-level decisions remotely. If it hasn’t already, it will. Your loyalty to the mission of your credit union and your responsibilities as board members are the same today as they were in the pre-COVID-19 world. Have a focused agenda and aim to keep your virtual meetings to about 90 minutes. (We think two hours is the max.) Participation can fall off a cliff if a video conference goes on too long ... we have all been there! Consider meeting for more than one session if you need more than 90 minutes. Keep your agenda tight while leaving room for strategic discussion. It is a delicate balance and requires excellent meeting facilitation by the chair and active participation by the rest of the board. Use all of the tools available to you on whichever video conferencing platform you use , including “breakout rooms” for small groups and strategic discussions, “polling” (which is a great way to efficiently get a Five-Finger Consensus ) and the “chat” feature (which, used appropriately, is a great way to take the pulse of your entire group in record time.) Remember that teamwork is essential. Everyone has to be “all in” on the virtual experience and 100% committed to your meeting’s purpose. The pandemic crisis has been a gut check for leaders in the credit union community. Having a deep bench of various talents, experiences and cultures has never been more important. Perhaps nothing is a complete substitute for “breaking bread” and the ways that in-person meetings, practices and rituals build community and culture. However, think about how a hybrid model of virtual meetings (when done well) and in-person meetings (with social distancing, masks and hand sanitizer) can help you to expand the reach of your board recruitment and diversify your membership. As we continue to adjust to the post-COVID-19 “new normal,” the most important lesson is to remain nimble; don’t be afraid to try new things and accept that experimentation will lead to some failures, but ultimately to success as well. Previous Next

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

< 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 Are Women Better Leaders? Jennie Boden Sep 24, 2021 They are when they act with humility, self-awareness, self-control, moral sensitivity and kindness. I just finished an interview with the female CEO of a fairly large credit union. I love conducting interviews. It’s my favorite part of my job, and luckily, I get to conduct a lot of them. As president of consulting services at Quantum Governance , I’ve probably interviewed thousands of credit union board members, supervisory and audit committee members, CEOs and members of senior management. And each time, I learn a lot. During this interview, the CEO was talking about adding her opinion in the boardroom on a sensitive topic. She stopped mid-sentence and stared off into space for a minute. (We were, of course, on Zoom.) I pushed her just a bit, inviting her return: “What are you thinking?” I asked. “I’m wondering how much I can say, how much I should say,” she replied. “What’s the right balance for me to share in the boardroom?” I paused before I spoke. “I can’t imagine a male CEO ever pausing, even for a minute, to ask himself that important question,” I said. And I do think it’s an important question. There’s a lot of data out there that suggests that women are currently better leaders than men. For example, this article in The Washington Post reported that countries led by women “suffered far lower death rates” than those led by men during the first wave of COVID-19. A study by Pew Research Center found that while most Americans find few differences between women and men in terms of leadership, women are perceived as more compassionate, empathetic leaders. A recent Forbes article reported on Gallup data that suggests that “in 1953, 66% of Americans preferred a male boss—today the figure is 23%.” The author of the Forbes article, Tomas Chamorro-Premuzic, asks the million-dollar question: 'If women have more potential for leadership, then why are they still the minority group among leaders?' - Jennie Boden via X (formerly Twitter) That same Forbes article also cited studies demonstrating that among the central qualities that “make leaders more effective, women tend to outperform men. For example, humility, self-awareness, self-control, moral sensitivity, social skills, emotional intelligence, kindness, a prosocial and moral orientation are all more likely to be found in women than men.” And that’s what the CEO I was interviewing was demonstrating as she paused and considered her next steps: skills that make leaders more effective, such as humility, self-awareness, self-control, moral sensitivity, social skills, emotional intelligence. Yet women often don’t get much credit for applying their winning leadership characteristics in the boardroom or in executive roles. The author of the Forbes article, Tomas Chamorro-Premuzic, asks the million-dollar question: “If women have more potential for leadership, then why are they still the minority group among leaders?” Charmorro-Premuzic answers his own question by saying that employment choices are made more based on “ style rather than substance , so we pick individuals for leadership on the basis of their confidence rather than competence, charisma rather than humility, and narcissism rather than integrity. … The typical leader is not known for their humility or competence, but arrogance and incompetence.” Now, clearly, this isn’t always true. Some boards value humility more than charisma when recruiting new directors or hiring a CEO. And I’ve met many male CEOs and C-suite executives (within the credit union community and outside of it) who fully embody substance over style. I’m lucky to say that I work for one. And of course, men, too, can demonstrate self-awareness, self-control, emotional intelligence and all of the rest. Yet female leaders with substance, humility and competence still have a harder road to top roles. Chamorro-Premuzic suggests that this has to do with maintaining the status quo. I think he’s right. But even if it’s just a little bit true—this maintenance of the status quo, we all need to work together to shift this paradigm and begin to value even more substance over style and humility more than charisma. -Jennie Boden, via X (formerly Twitter) Fortunately, some significant inroads are being made in the credit union community. CUNA recently reported that 52% of credit union CEOs are female, compared to only 3% of bank CEOs, 5% of top leaders in commercial banks and 6% of chief execs in Fortune 500 companies. And having a substantial representation of women in the top job is not just common among the smallest credit unions anymore: At credit unions with between $1 and $3 billion in assets, more than 14% of the CEOs are female. Great. Good for us. Truly, that’s good for our community. But even if it’s just a little bit true—this maintenance of the status quo—we all need to work together to shift this paradigm and begin to value even more substance over style and humility more than charisma. Because we want our credit unions—as they pursue their mission to be people helping people—to be led by the best possible leaders. Previous Next