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< Back Assessing Staff's Strategic Planning Path Jennie Boden Aug 2, 2017 The challenge is helping front-line credit union folks see the big picture. Should credit union staff members beyond the senior level be included in strategic planning? If yes, when and how will such involvement be most beneficial for a credit union? The diagram at right will help you consider the answer to this question. The board and senior management team should work in constructive partnership to set the credit union’s overarching vision, mission, culture (or values), strategic goals, objectives and metrics (see the items in the accompanying graphic in blue). Work plans (see items in red) are then developed and executed by the senior management team in partnership with the rest of the staff, based on the original work set forth on the vision, mission and culture. There are a few caveats, of course. The senior management team should be recused from some parts of the strategic planning process with the board when (a) the board anticipates that it may need to make a CEO change and wants to discuss it as a part of going in a “new strategic direction”; (b) the board discusses the possibility of restructuring the senior management team with just the CEO; and/or (c) there are important governance issues concerning the board, which could morph into a strategic effort focused on the board or governance-only issues, that they want to first discuss among themselves and (usually) with the CEO. Figure 1: Strategic Planning Elements Including more staff in the visioning process can, at times, be limiting, so the board and senior management team should consider whether this might be an issue. Staff can tend to think more along operational lines, and the purpose of strategic planning at the board and senior management team level is to think, to think big, and to think beyond what is happening today. However, some staff, especially individuals with specialized skill sets and knowledge, could be included at the board and senior management team level of planning, and all staff can and should be included in up-front brainstorming, research and data gathering. Additionally, they are vital to fully developing the more detailed operational work plans (the items in orange) that flow from the board-level strategic goals, objectives and metrics. Finally, they would need to be involved as a vital stakeholder group in the communications effort articulating the strategic planning efforts of leadership. After all, they will be asked to embrace and execute the plan. 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 Is Your Organizational Success An Accident? Gisele Manole & Jennie Boden Nov 22, 2022 New study suggests where to look for the answer. We’ve been studying credit union governance for more than a decade now and amassed mountains of data on credit unions of all asset sizes and from all over North America. Perhaps the most frequently asked question we hear is some variation of, “How do we know when we’re getting it right? Our assets are increasing, and our membership is growing so we must be governing ourselves well. Right?” As we prepare to publish The State of Credit Union Governance, 2023 Report, we looked closely at the data to see if it was clear to us what the key indicators were that a credit union was governing itself well—that as a credit union’s assets and membership grew, the organization’s governance practices were evolving too, both in terms of meeting changing regulations and best practices. What we learned focused our attention on four things: 1) board members meeting their roles and responsibilities; 2) members of the credit union’s governing system (board and supervisory/audit committee members and senior leadership) meeting high accountability measures; 3) strong levels of volunteer engagement; and 4) building and maintaining a leadership culture of trust. We found there is a significant positive correlation among each of these four areas of governance—meaning that if a respondent reports that their credit union is highly effective in one of the governing elements, they generally report that they are highly effective in the other three elements, too. Therefore, the four elements—accountability, board member roles and responsibilities, engagement and trust—are inextricably linked and together provide tremendous insight into the strength of your credit union’s governance. Figure 1: The Four Elements of Good Governance These findings identify the four elements as likely keys to unlocking the secret to good governance and creating a high-functioning board. In addition to pinpointing areas of focus, our findings suggest that actions to improve the effectiveness of one of the four elements may lead to improved effectiveness in the other three elements. So, as we begin to more succinctly answer the question, “How do we know when we’re getting it right?” we can look to these four areas of governance for some indication of whether your credit union’s board and executive leadership are “getting it right” or not, and whether further study is necessary to identify which element of your governance needs your focus to ensure the continued success of your vision and mission. Previous Next

< Back Closing the Board/Management Trust Gap Michael Daigneault and Jennie Boden Jul 1, 2018 5 ways to unite staff and volunteers for good governance We had a colleague once who used to say that trust is “the residue of promises fulfilled.” It’s a pretty good working definition, as definitions go. It’s simple, straightforward, and likely one that most people can identify with. You trust those that you can rely on; those that have come through for you in the past are most likely to come through for you in the future. You’re probably more drawn to the types of people in your life who do what they say they are going to do, and we bet that you avoid the other type—the kind that disappoint and fail to follow through. For years, we’ve been surveying credit union leaders around the country and, out of the more than 50 questions that we’ve been asking them, there’s one we’ve always identified as among the most important: How effective is your board at building a leadership culture of trust? Then, after years of surveying individual credit unions, we synthesized the data from multiple credit unions and learned a lot. (You can read the fruits of our labors in the recently published study entitled “ The State of Credit Union Governance, 2018: Five Data-Driven Recommendations for Future Success. ”) We found a significant difference in perceptions between credit unions’ senior staff and volunteers (board and supervisory committee members) on matters of trust. The numbers may surprise you; we know that they surprised us. If you consider trust to be an essential building block of a cooperative’s leadership culture, as we do, the numbers may also concern you. While we identify 10 elements of an effective board culture including engagement, inquiry, curiosity, respect, learning, teamwork, accountability, service and diligence, it’s the element of trust that undergirds them all. Without trust, you’re likely in real trouble. Conflict spikes up, relationships fray, efficiency plummets and morale ends up in the basement. Overall, just 27 percent of senior staff and 25 percent of CEOs that we surveyed reported that their boards were “very effective” at building leadership cultures of trust, and a critical mass of them (42 percent of senior staff and 48 percent of CEOs) thought that their boards were only “adequate,” “ineffective” or “very ineffective” at doing so! See Figure 1: Building a Leadership Culture of Trust by Position. There’s also a clear gap between what the senior staff and volunteers think. More than 50 percent of supervisory committee members and 40 percent of board members we surveyed reported that the board was very effective at building a leadership culture of trust—indicating a significant perception gap between the two groups. So, what’s going on here and, more importantly, what should we do about it? What’s Going On? A credit union board member recently described her board’s culture as “toxic,” and another suggested that there was a “cancer” within. While we certainly recognize that the culture described by these two volunteers is an extreme, we do know that all cultures, including your board’s culture, are living, breathing things that require constant tending and care. And if you’re not paying attention to yours, you’re putting it at risk. To understand more closely what may be driving these troubling findings on trust, let’s turn back to our recent study and explore three more elements of an effective board culture: 1. Engagement. If trust is the primary element of an effective board culture, engagement runs a close second. You can’t have an effective culture if your board members aren’t engaged. How many times have we heard from our clients (and have you thought to yourself) that there’s a group of board members who just come to board meetings and sit there, never talk, don’t seem prepared and don’t seem to care? How much trust do you think those board members are engendering? If we go back to our definition of trust—the residue of promises fulfilled—are they keeping the promises they made when they joined the board? Are they serving their CUs to the best of their abilities? Are they engaged, active members of the board? Lending their time, talents and energies? Sadly, the answer is often a resounding, “No.” Our survey data shows that 41 percent of CU volunteers and staff rate their board members’ engagement as only “adequate” or less than adequate. Board member engagement is—for some CUs—suffering, and such woes are likely having a negative impact on building trust. See Figure 2: Engaging All Board Members in the Work of the Board. 2. Accountability. Merriam-Webster defines accountability as “an obligation or willingness to accept responsibility or to account for one’s actions.” There’s some good news: Many supervisory committee members believe there is a fair bit of accountability on CU boards. The not-so-good news is that those actually in the boardroom on a regular basis expressed a much greater degree of concern. Less than 25 percent of board members surveyed think that they’re very effective at holding each ot her accountable—and the perspective from management is even more critical with only 16 percent of senior staff and 12 percent of CEOs finding boards very effective at holding fellow board members accountable. See Figure 3: Holding Each Other Accountable by Position. Over time, this lack of accountability is surely having a negative impact on trust. It likely means that some directors are falling short on their promises and their colleagues aren’t respectfully calling them on it. 3. Inquiry. We like to say that one of a board member’s most important jobs is asking good questions. Volunteers will never be a top expert on the CU’s operations, nor should they be. That’s why directors rely on professional CU staff for help. Volunteers must trust but verify; ask questions that staff may not have considered; and provide advice, counsel and oversight that drives success. Unfortunately, there is some evidence in our report that boards aren’t measuring up in this area. More than a third of our study’s respondents rated their boards as only “adequate” or “less than adequate” at asking the hard questions that need to be asked. See Figure 4: Asking the Hard Questions That Need to Be Asked. The key is to be sure that you’re actively creating a culture of inquiry. Understand your role and speak up. But be careful. Ensure that your culture of inquiry doesn’t become a culture of actual or apparent distrust. That is, trust but verify. Your questions should be shared for supporting and furthering the CU, not a “got ya” mentality. And don’t jump into the weeds. Keep your questions strategically focused or at the appropriately high end of fiduciary oversight. What Can Be Done? If you’ve read carefully, at least some of the answers will have begun to emerge. We’ve listed them here in five suggestions for you to consider: 1. Assess your credit union’s governance effectiveness and culture. If your board hasn’t conducted a governance assessment recently, it’s time to do so. Just like you go to a doctor regularly to evaluate your health, your CU’s governance health and culture should receive its own check-up on a regular basis—usually every two years. This should include a formal assessment process to identify your strengths and challenges and the development of an action plan for improvement. 2. Keep your promises. Say what you are going to do and then do it. Don’t disappoint. Follow through, and if you can’t, be clear why not. 3. Show up. Be prepared. Participate. If you’re not clear about what is needed, ask. Ensure you have job descriptions for directors and officers; make sure you have committee charters, too. These all help to clarify (and quantify) roles and responsibilities. 4. Be accountable and hold others accountable, too. Accountability is a two-way street. Just as we talked about keeping your promises, you need to be sure that your colleagues are keeping their promises, too. Once the roles and responsibilities are clear, and everyone knows them and agrees to them, commit to a culture of accountability. Ensure you have a chair in place who is bold enough and strong enough to lead the charge. 5. Ask the hard questions that need to be asked (and have the hard conversations that need to be had). This last suggestion is perhaps the most challenging of all. It will require you to be open and vulnerable at the same time ... to put your trust in your colleagues and to ask them to put their trust in you. But it’s a must, and as we said, probably your most important role as a board member. Previous Next

< Back RIP RBG: The Thin, Strong String That Ties Women Together Jennie Boden Sep 21, 2020 Our foremothers paved the way for us; now we pave the way for the women now coming of age. This was written by the author Saturday morning, after the passing of Ruth Bader Ginsburg. I’ve been thinking about all of the stories of the strong women in my family today. This day. The day after Ruth Bader Ginsburg has died. I come from a line of very strong women. My grandmother, Ora, died when I was very small, but I’ve seen pictures of her. She was tall, broad and her hands were well worn. My mother and her sisters used to talk about her with fear and awe and love in the same breath. When Ora was raising her family, which included my mother and her two sisters, a cousin who was developmentally disabled and “the boarders” as my mother used to call them. It was the Great Depression, and she did whatever it took. Sometimes that meant moving from abandoned house to abandoned house, where they would crawl in through an open basement window or maybe it was a window that my grandfather, whom everyone called Hap, broke. Yes, they were squatters. But, if you listened to the Hathaway girls, as my mother and her sisters were known, it was all a great adventure. When the Hathaway girls grew up, they had babies. Lots of them. There were a few boys sprinkled in here and there, although not in my family’s case where four daughters were born. Our family has always been female-centric. My mother’s strength and certitude about who she was and how she would move through the world as a woman was formed during her childhood—coming home after school to find the family had moved one day from the house on Magnolia Street to one a block over on Maybrick—and later as a 20-year old mother when her first-born daughter, still an infant, came very close to dying. Toward the end of her life, she cared for my father as dementia took him and their love story faded slowly and painfully. As the country mourns the passing of Justice Ginsburg and honors her legacy, I’ve been thinking about all of the women who have come before us in all of our families, in all of our circles, in all of our workplaces, and in all of our communities. All of the women who have made us who we are. All of the women who have made things possible for us that we never knew were once impossible. I’ve been thinking about the thin—but strong—string that ties all of us together as women. I’ve been thinking about the paving they did for us. And the paving that we must do now for others. And about the paving that I will continue to do in memory of my grandmother, Ora, my mother, Katie, and the Honorable Ruth Bader Ginsburg. Previous Next

< Back A Quality CEO-Board Relationship Michael Daigneault Jul 26, 2016 Fostering A Healthy Balance The CEO of an organization we’ve been working with recently resigned. Unfortunately, a good deal of finger pointing followed. Some suggested a lack of strategic focus. Others questioned her leadership qualities. And there was the inevitable discussion of “fit” or “chemistry.” This outcome ultimately came down to the relationship between the CEO and the board. And it’s not the first time we’ve seen this set of circumstances. In fact, a member of our team has resisted taking on a chief staff position for this very reason—because the relationship between a CEO and the board can either make or break effective organizational leadership. As such, we spend a great deal of our time at Quantum Governance talking about the importance of building a constructive partnership between the CEO and the board. But what does that really mean? We can start with the basic definition of these words. Constructive, as defined by the Oxford Dictionaries, is “serving a useful purpose; tending to build up.” Partnership refers to “taking part in an undertaking with another or others, especially in a business or company with shared risks and profits.” There’s a lot of meaning embedded in those definitions, but let’s just call out a few of the most important words: “useful purpose,” “tending to build up,” “undertaking with another” and “shared.” When we ask board members what their most important role is vis-à-vis their CEO, a common response is “to hire and fire.” That’s a very limited view of the relationship. Yes, recruiting and dismissing the CEO are formal powers vested in a board. And, yes, these decisions are among the most important a board typically makes. But these formal powers do not speak to the quality of the relationship, whether it is constructive and how it functions as a partnership between the board and the CEO. Yet, therein lies the real key to leadership success in the vast majority of credit unions. The constructive partnership model is not a luxury but a necessity. Both the board and the CEO are needed at the table. There are times when the board must firmly lead, as when setting overarching credit union policy, for example. And there are times when it makes sense for the board to get out of the way and let the CEO and his or her management team do what they do best—run the day-to-day operations of the credit union. But there are very real instances where you both need to work—and here’s that term again—in constructive partnership. For example, who sets the strategic vision for the credit union—the board or the CEO? Or do you do it together, through dialogue and in discussion? Would your board hold a strategic planning session without your CEO? Would your CEO put a new five-year strategic plan in place without the board? Certainly not. We have seen instances in which credit unions have been largely driven by the board. In these situations, the CEO is often frustrated and describes feeling like “my hands are tied.” There is a fair amount of turnover at the senior levels of these organizations. On the other side of the coin, in organizations where the CEO is firmly in charge and forges forward without board input, directors are disengaged and describe feeling like a rubber stamp, following the whim and will of the CEO and his or her management team. Neither extreme benefits the credit union. All this talk of constructive partnership does not imply that the board should not address CEO performance issues. That is a key board responsibility—and a process that may require more attention at many credit unions: Nearly two-thirds of all board members we’ve surveyed wouldn’t describe their method of assessing their CEO’s performance as very effective. Ultimately, one of the most important roles you play as a director is to find a way to support and hold your CEO accountable, joining him or her in the undertaking the leadership of your credit union in genuine constructive partnership, sharing the responsibility to deliver on the expectations of your members in helping them fulfill their financial life dreams. Previous Next

< Back Fiduciary AND Strategic Thought Needed Michael Daigneault Mar 5, 2014 Finding the right balance between operational oversight and visionary dialogue in your boardroom is worth the struggle. I’ve long said that being a CEO of an organization is one of the hardest jobs in the world. I’ve had the opportunity to help lead a number of organizations myself and have found myself being challenged to find the right balance between fiduciary and strategic agenda items at board meetings. Having formally observed a number of credit union board meetings in recent years, I have realized that this struggle is shared by many credit union CEOs and board chairs. And the proof of this difficulty goes well beyond the anecdotal. In recent assessments of credit unions throughout the United States, a surprising number of credit union board members reported a lack of genuine strategic dialogue at their monthly board meetings. Finding the right balance between operational oversight and strategic dialogue is a real struggle. But one that is very much worth fighting. There are a number of reasons why such a balance is difficult to achieve, but I’d like to focus on one reason in particular: Many credit union leaders get “stuck” in one mode of thought. What do I mean by that? CEOs and board members frequently lack a framework or vocabulary to ask the full range of questions necessary to effectively carry out their governance responsibilities. As such, and often by default, many credit union boards spend the majority of their time in the fiduciary realm of thought. Frequently, this notion of fiduciary is paired with the word “oversight.” As credit unions, we’re very good—and often most comfortable—with providing oversight. We are stewards of our members’ hard-earned money, and so we are traditionally strong at reviewing the financials, ensuring legal and regulatory compliance, instituting appropriate financial controls, conserving the organization’s resources and even mitigating key risks. As we should be. I would imagine your credit union spends a great deal of time talking about (or reporting on) fiduciary items at your board meetings. In fact, I’ve had clients who issue monthly board packets -- some 100, 200 or even 300 pages long -- and then spend the vast majority of their board meetings simply reviewing those written reports. Don’t get me wrong. Fiduciary thought is absolutely necessary, and it has a vital place - especially in the credit union community. The problem is that while fiduciary thought is necessary, it is certainly not sufficient if you desire a governance culture operating with excellence. Yes, more is needed. But the extra effort yields significantly greater rewards. The “more” that is needed is to begin incorporating strategic discussions into your board meetings regularly . Please note that I am not talking about “strategic planning.” It is highly likely you already incorporate some form of strategic planning into your meetings annually - or every few years - when your board undertakes the review or revision of your strategic plan. I am, however, suggesting that the board and senior management exercise their “strategic thinking muscles” very regularly. If you don’t, you won’t be able to adapt to changing market conditions. Nor will you improve at identifying, planning and executing high-impact strategic initiatives. (It’s a lot like my golf game. I know how to hit the ball reasonably well, but playing only once or twice a year, my game has seen no real improvement in 20 years.) By modifying their regular meeting agendas, boards and senior management teams can work in constructive partnership throughout the year to create the credit union of the future, craft thoughtful dashboards of strategic success, find ways to innovate, experiment and learn on an ongoing basis. They can also work diligently together to scan the internal and external environments surrounding their credit union, identify evolving member needs, analyze competitive benchmarks and see key marketplace trends long before others. Begin to think of “strategic planning” as an ongoing process of strategic discussions and learning opportunities throughout the year -- not a discreet occurrence with a start and a finish. And so the question is: What’s on your next board meeting agenda? Previous Next

< Back Board Liaisons Direct Directors and Staff Toward Good Governance Caitlin Hatch Apr 26, 2019 Generally keeping things organized and on track is no small feat—and it’s an important one. Credit union leaders have become increasingly aware of the importance of good governance and have made an effort to ensure that their credit unions are adopting cutting-edge governance and leadership practices. From assessing the effectiveness of their boards and governance systems to updating their governance frameworks, policies and procedures to improving their board structures, committees and charters, good governance is taking center stage. These efforts—along with the steady workload of supporting a credit union board—require strong leadership from the board chair, CEO and a governance committee, but also from an often-overlooked and under-appreciated staff person—the board liaison. At a minimum, today’s board liaisons help to organize and disseminate meeting materials, plan and support the execution of board meetings and retreats, take minutes, and generally help keep things organized and on track so that the board can do its work. But more and more, the board liaison’s role is being expanded and now is considered by many a management position that has been tasked to actively support—and improve—the board’s work. In its expanded role, board liaisons also ask a fundamental question regarding good governance: How can the credit union’s board and governance become even more effective? Those board liaisons with sufficient experience are being tasked to help design and manage the information architecture for the board, ensure the value of board meetings and retreats; coordinate regular governance and strategic assessments, as well as support and guide the board in fulfilling its governance, strategic and leadership responsibilities. They are key players in fostering the governance cultures of their credit union board and, thus, the credit unions themselves. Historically, the individual tasked with this role has been the CEO’s executive assistant. Why? Generally, because that’s someone the CEO works closely with and trusts, someone who knows the credit union and has easy access to the key players, someone who has the nuanced administrative and people skills required to regularly communicate with board and committee members at the most senior level. They are, most often, consummate, professional women. I say “women” because, while a man could certainly perform this critical function, we have met very few men who actually do. At CUES’ first event for board liaisons, 19 individuals attended—all women—from across the country and from credit unions of varying sizes and complexities. They all agreed that they regularly perform many of a board secretary’s core duties—helping to safeguard the integrity of the governance framework; ensuring compliance with regulatory requirements; implementing the board’s decisions; and facilitating communication with and among the credit union’s leadership. However, we did learn that there are remarkably different approaches to the role. For example, the title of the person fulfilling the “board liaison” role currently varies a great deal from credit union to credit union (i.e., everything from “chief of staff,” “governance officer” and “board affairs director” to “board & executive relations,” “board administrator” and “board assistant”). And, just as the titles vary, the framing and scope of the position varies, too. While it’s a critical role, there appears to be no commonly accepted definition of the “board liaison” position within the credit union community at all! Working closely with CUES, other colleagues in the credit union community and board liaisons throughout the U.S. and Canada, we hope to help change this, and encourage a much greater appreciation for and deeper understanding of the importance of today’s board liaisons. The fact that the board liaison, at least at this early stage of conception, looks to be one that is largely filled by women, is to be celebrated—especially given the expanding and growing role that board liaisons are experiencing in credit union leadership. While there are now twice as many female CEOs in the credit union community as there were 10 years ago, still, less than one in five CEOs is a woman (for credit unions with assets over $1 billion). This is progress, but there still aren’t enough women’s voices among those in credit union leadership positions. Still, there remains much more to learn about the board liaison position and the vital role women are currently—and should be—playing as they shape the governance of their credit unions. 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 An Antidote For Shifting Sands Michael Daigneault and Jennie Boden Sep 24, 2019 Your strategic planning process is as important as the plan and should be ongoing. Recently, Henry Meier, SVP/general Counsel at the New York Credit Union Association penned a blog addressing “ Why D.C.’s Policy Pronouncements are the Key to Economic Growth .” In it, Meier discusses the shifting sands of today’s political environment, as well as the state of our economy and how “We are now more dependent on Washington than ever before.” The business environment in which your credit union operates is, to say the least, complicated. Beyond the challenges that emerge from Washington, you are likely faced with growing competition, shifting demographics, technological disruption, as well as the potential for an economic slowdown or recession. What else would you add to your list? Challenges with board succession? A CEO transition? A core conversion? How prepared is your credit union to meet these challenges? Do you have a solid strategic plan in place? What about your process? We think the process, in these turbulent times, is nearly as important as the plan. There are four common strategic planning processes that you and your colleagues can adopt: A traditional planning process would have you identify where your credit union is today and where you want to be in the future (for example, three to five years from now). Then, you create a disciplined timeline, set of strategic goals, milestones, and financial and other resources needed to get there. The only problem with this process is that stuff happens. Presidents implement tariffs. Timelines for core conversions drag on. You get the point. Scenario planning allows you to plan for a number of different potential futures or scenarios on a contingency basis. The challenge here is that it’s much more time-consuming because of all of the time required to create and consider alternative scenarios (and accompanying plans)—many of which are sometimes necessary, particularly in an unpredictable world in which very different futures may unfold. In phased planning , it’s understood that the world may change quickly and, therefore, it’s difficult to plan too far into the future. Accordingly, the phased approach tries to break up the strategic planning process into manageable periods (or phases) of time. The downsides to phased planning are that you can lose sight of longer-term goals and default to a form of operational planning. Cyclical planning combines best practices from all three of the above methods—It’s “real-time,” “continuous” or “ongoing” strategic planning. To quickly put you at ease, cyclical planning does not mean that you are re-creating your strategic plan at every board meeting or even every year. What it does mean is an important change in the mindset of both your board and your management team. It means that strategic planning is regarded not as something separate from the board’s governing duties, nor is it separate from management’s responsibilities. It means that strategic thinking and planning are core elements of your board’s and management’s responsibilities. It means, therefore, that your board and management are holding meaningful strategic discussions on an ongoing basis—throughout the entire yearly cycle of board and committee meetings. (And that these discussions go beyond merely an update on how you are doing on the metrics.) It means there is no designated start and end to “the plan.” It is thoughtfully considered—and modified if need be—over time. It means that as the sands shift in Washington, China or in your backyard, your credit union’s board and management team are prepared to react—quickly and in “real time” to meet the credit union’s changing strategic needs. Previous Next

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

< Back 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 What to Do When Communication Styles Clash: Embrace It Jennie Boden Feb 18, 2019 Building a culture of inclusivity helps ensure each voice on your board is heard. Once when my firm, Quantum Governance L3C, was looking at some assessment tools that might help our clients, we spent the fall taking them for a test drive. We spent time looking at the DiSC profile , the CliftonStrengths assessment and more. In essence, we were putting our staff through some of the paces through which we often put our clients—boards of directors of credit unions, associations, foundations and other nonprofits. We use assessment tools with our clients with the intent to improve their ability to function as a team and increase their governance effectiveness. With these test drives, I learned a lot about myself and my colleagues. I learned that I like “contributing to a calm, stable atmosphere” and “working with people who genuinely care about one another.” And I definitely don’t like “dealing with angry, pushy or argumentative people,” or “having to argue for [my] point of view”—although I think my husband would likely disagree with that last observation. One of the personality tests called me “amiable.” The results of the tests helped me to understand some of the factors that motivate my behavior and the way that I communicate and interact with my colleagues, how they interact with me, and our own team’s dynamics. To this day, when one of my colleagues says I’m being “too soft,” I’ll simply reply, “Remember, I’m the amiable one.” It’s a common language and experience from which we can both draw. But it can be tough sometimes, can’t it, when personalities and communications styles clash? We all believe in the value of diversity. In fact, when we interview board members (and we interview a lot of them), diversity is one of the things that they feel their board is lacking the most! They believe that their boards (and their credit unions) would be better off if they reflected the diverse make-up of their credit union’s membership. And they are probably right. At Quantum Governance, we define diversity as the quality of being different or unique at the individual or group level. And yet, while we’re all going around valuing and actively seeking diversity, it’s the very nature of diversity that can cause communications challenges. My perspectives and the way I communicate are, by definition, different from the perspectives and communication style that my firm’s CEO brings to the table. First, the obvious: I am female; he is male. Second, I was raised in a small, rural town in Pennsylvania; he was raised, well, everywhere. He moved 25-plus times by the time he was 30. I was educated by liberals at UC-Berkeley; he, by the Jesuits of Georgetown. I studied literature; he studied law. I am a quiet, amiable communicator; he is larger than life. I like big, lumbering dogs (think Lab/Great Dane mixes!); he likes multitudes of small, cuddly pups. And yet, for more than 25 years, we have been working and collaborating happily and effectively together. And you, too, can work effectively with those who are vastly different from you. Instead of avoiding the challenges that will, by definition, arise from the diversity that surrounds you, embrace them. The true value of diversity is in what it brings us—the variety of thought, perspectives, context and experience. It helps us all—whether an entire credit union, its board or even an individual—grow and strengthen in ways that we never imagined. There is a twin pillar to diversity that will show you the way. It is the notion of inclusivity. When a diverse board, team or even diversity in a one-on-one relationship challenges your ability to communicate, work to build inclusivity—an environment where everyone genuinely feels included, supported, heard and able to contribute to the success of the whole. My father was a minister in that small rural Pennsylvania town where I grew up, and my amiable self was most likely born from his drilling into my head, “Try to understand the other person, Jennie,” which was his own definition of building inclusivity. When my communication style clashes with another, this is my go-to tactic. And I employ it all of the time. Communication styles clash because people are diverse. Ultimately, however, making a diligent effort to work effectively and even thrive in a diverse world will not only enrich you as an individual but strengthen your board and your credit union’s leadership. Previous Next