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< 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 Balancing Impartiality With Voting Michael Daigneault and Caitlin Hatch Apr 1, 2019 A best practice for chairs is to help the board look at the big picture while still having a specific opinion. At the September 2018 Board Chair Development Seminar , we asked the more than 60 attendees from all over the United States and Canada to share with us whether their board chairs voted on regular matters. By a show of hands, a slight majority of the attendees said their chairs do not regularly vote during board meetings—except to break ties. In fact, one leader indicated that his CU had placed this prohibition against voting by the chair—except in the case of ties—into its governance policy. A number of chairs were quite passionate about refraining from board votes. Their passion appeared to flow from a strong desire to ensure that they not exert any undue influence over their colleagues on the board. For others, the abstinence (unless in the case of a tie) was a strong belief that the practice supported key values of a chair’s impartiality, as well as his or her primary role as a fair and balanced facilitator of board processes rather than a participant in them. Another attendee suggested that his CU’s current practice was based on Robert’s Rules of Order, a widely used reference for meeting procedure and business rules in the English-speaking world. What Does Robert’s Rules Say? While most leaders of credit unions that use Robert’s Rules believe they understand them, few have genuinely studied them. That is because the guidelines in the book are amazingly complex and intended to be a reference book for “an answer to any question of parliamentary procedure that may be met with,” according to one of the many editions, Robert’s Rules of Order Newly Revised in Brief . Even the Robert’s Rules Association admits the overload of information in the guide: “At least 80 percent of the content [of the most recent version] will be needed less than 20 percent of the time.” Notably, the position of Robert’s Rules of Order Newly Revised in Brief on board chairs voting is clear. They can vote on all matters coming to the board: “If the President [Robert’s Rules also explicitly recognizes “Chairs” to be the same as “Presidents”] is a member of the voting body, he or she has exactly the same rights and privileges as all other members have, including the right to make motions, to speak in debate, and to vote on all questions. So, in meetings of a small Board (where there are not more than a dozen Board members present), and in meetings of a committee, the presiding officer may exercise these rights and privileges as fully as any other member.” We agree that chairs should not “unduly influence” their colleagues, but simply voting on board matters does not constitute undue influence. Impartiality is also important for chairs as they facilitate board meetings. But, let’s be clear about what impartiality really means. Elect individuals to the role of chair who can be fair, objective facilitators. … If you are concerned about undue influence, consider casting votes privately to limit the influence of the chair. Merriam-Webster states that “partial to” or “partial toward” someone or something is to be somewhat biased or prejudiced, which means that a person who is partial really only sees part of the whole picture. Thus, to be impartial is to try to see “the whole picture.” To allow everyone to see the whole picture, it is incumbent upon your credit union’s board chair to remain unbiased, fair and unprejudiced in his or her facilitation of the meeting. This doesn’t mean that at the end of the dialogue, your chair isn’t also a full-fledged member of the board with his or her own beliefs, perspectives and ideas. So, how then do you reconcile the board chair voting and maintaining his or her impartiality? The answer lies in the important difference between the actual content of the matters being discussed and the impartiality and fairness of the facilitation process utilized to transparently discuss the content. As such, a board chair’s impartiality isn’t about him or her not having a personal opinion, it’s about him or her not wielding authority in a biased, unfair or prejudiced manner that only forwards his or her own perspective. A board chair has one vote like each and every one of his or her colleagues (except, like all of the other members of the board, in the obvious case of a personal conflict of interest or when there is insufficient information to make an informed decision), but we would be naïve to suggest that the chair position carries with it no persuasive influence. Accordingly, he or she must work diligently to facilitate the board meeting (or voting process) in a way that allows all voices to be genuinely heard, whether or not they agree with the majority’s—or chair’s—point of view. Remember to be careful out there … the mark of a true leader is the capacity and will to rally other people to a common purpose and a character that inspires confidence and trust. It’s the ability of a leader (such as a chair) to inspire followership over the long haul. It’s not that a chair must ensure that everyone falls “into line” behind a single, unanimous vote, and it’s certainly not the ability to ensure that everyone on the board always votes in agreement with the chair. Ultimately, it’s the ability of a chair to be both an effective board member—with his or her own thoughts and opinions—while simultaneously, fairly and impartially facilitating an appropriate discussion. That is one mark of a truly great board chair. Steps to Consider Taking So, what can you do to balance your chair’s right (and fiduciary duty) to vote with the need to maintain impartiality and encourage open dialogue? Consider the following: Elect individuals to the role of chair who can be fair, objective facilitators. This may be easier said than done. But it’s important. Many credit unions have simply adopted a rolling officer succession plan. Don’t. Be thoughtful about who you put into such leadership positions as the chair. Ask the chair to share his/her thoughts at the close of the discussion, not at the beginning. This may take some diligence on the part of the chair. But it can be done, and once it is done regularly, it can and should become part of your credit union’s meeting culture. It is often a good practice for the chair to also try to fairly summarize the key points of the dialogue before a vote is taken—particularly if it has been an extended discussion. If you are concerned about undue influence, consider casting votes privately to limit the influence of the chair—as well as any other board members. If the vote is not a private ballot, the chair’s vote should be rendered last. Again, board meeting cultures can change. It might take time, but if your chair hasn’t been casting a vote, a shifting of this type may be easier to make than you think. 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 No Higher Calling Michael Daigneault Nov 25, 2014 The challenge of effective CEO evaluation It never fails—when I’m with a group of board members (which is very, very often) and I ask “What are your core responsibilities?” someone will always say, “to hire and fire the CEO.” And yes, I suppose at a very basic level this is true. Perhaps there is no more important decision a typical credit union board makes than in the hiring of a CEO. There is, of course, so much more to developing a successful relationship with a credit union CEO than in his or her hiring and firing. If you were to think back over your career and consider the best mentors you had—the ones who were able to elicit from you your finest moments as an employee—certainly you would consider their contributions to your career far beyond the moment they hired (or even fired) you. Indeed “CEO support and oversight” (not solely hiring and firing the CEO) is a key board responsibility that Quantum Governance focuses on. (The others are governance and leadership; performance and results; strategic thinking, learning and planning; budget and resources; membership and community outreach; and stewardship, ethics and financial integrity. On the whole, my colleagues and I sometimes worry that credit union directors spend too much time focusing on fiduciary and operational- related matters. Ideally, we would like to see you talk a bit more at the strategic level in the board room. However, one area where we do see a great deal of variability--and perhaps a greater need to focus at the fiduciary level—is in the assessment process of the CEO. What does an effective or “constructive partnership” between the board and your credit union’s CEO look like? That is, what kind of relationship do you have—and will you forge in the future—with your CEO? What are the appropriate operational and strategic boundaries? How, in the big picture, can you help your CEO be even more effective? What goals should you set for your CEO? Should your CEO’s goals be the same as the goals of the credit union as a whole—or should there be goals unique to him or her? Ultimately, what type of process is appropriate to provide an effective CEO assessment? There are real challenges in the answers to these vital questions. In Quantum Governance’s work, we assess credit union boards nationally, and less than 30 percent of board members we’ve surveyed think they effectively establish performance goals for their CEO. And only slightly more (35 percent) think they are effective in holding their CEOs accountable for such goals when they have been established. If my math is correct, that means only about 10 percent of credit union boards perceive they are effectively holding their CEOs accountable to an agreed-upon set of performance goals! To maintain a truly effective constructive partnership with your CEO, a board must thoughtfully and collectively work to build, foster, maintain and improve the relationship. A regular and genuinely valuable assessment process of the CEO is vital. It can provide: a more objective and comprehensive analysis of your CEO performance, a higher degree of focus on key credit union goals, efforts, and initiatives, an in-depth look at important leadership strengths – as well as challenges, a means for your credit union’s leadership to get “un-stuck,” a way to reframe key governance, leadership and strategy issues, baseline data to measure future efforts and progress, and new ideas, insights and ways to move the credit union forward. And yet, sadly our surveys show that a third or more of credit union board members feel they are doing an “ineffective” or only “adequate job” of using a quality process that allows all board members to provide input on the CEO’s evaluation. Such a process is a vital element in maintaining a good relationship with your CEO over time. In addition to ensuring that all board members have an opportunity to provide input into the CEO assessment process, here are other options to seriously consider: For example: 1) you could also ask your CEO to complete a CEO self-assessment tool aligned with the question set board members use to provide feedback; (2) you could ask for 360-degree assessments by direct reports to the CEO; and, in appropriate instances, (3) you could ask for mentor or coach assessments of the CEO. The immediate goal is to provide valuable feedback to the CEO that accurately assesses his or her efforts and gives genuinely helpful guidance to improve overall performance. The ultimate aim is to build an effective partnership that will help your CEO and, through his or her efforts, actively assist the credit union and its members to succeed. In many respects, there really is no higher calling before you as a board. Previous Next

< Back Supervisory Committees Function Well, But... Michael Daigneault Apr 29, 2015 Just like CUs and their boards, supervisory committees must change with the times. We survey a lot of credit union board members. And generally most will say they are pretty satisfied with the job their supervisory committee is doing. In fact, of the five areas on which we survey (vision, mission and strategy; board structure and composition; fiduciary oversight; governance and leadership; and supervisory committee), fiduciary oversight and supervisory committee usually are the two highest-scoring areas. But I’ve been troubled lately. Why? Because a good percentage of board members we interview admit that: (1) they don't really know what their supervisory committee does; (2) if they do know what their committee does, the practices of their supervisory committee do not appear to have changed much in the last decade; and (3) almost 45 percent of board members think their supervisory committee’s analysis of the top operational and strategic risks facing their credit union are less than effective. Notably, half of the board members at one CU client even described their supervisory committee’s oversight of the external auditor--traditionally one of the key functions of that committee--as either adequate or even ineffective. So, what’s going on? Today’s credit unions are not like the credit unions of yesterday. The CU world is increasingly multifaceted, with regulatory complexity, a growing number of mergers and acquisitions, disruptors from all sides, evolving board governance and leadership practices, exploding technology, and different types and degrees of risk. Just as your credit union evolved from its early days when the governing board served multiple roles and the supervisory committee’s charter was likely focused only on the external audit, so, too is it time for that committee’s purpose to evolve with the changing landscape. Many supervisory committees today are being stretched beyond their traditional focus of helping to oversee the internal and external audit functions of a credit union. They also are being asked to carry out verification of accounts, receiving member complaints, ensuring regulatory compliance, and other critical oversight processes, including – for some credit unions – the possible suspension of credit union board members. The most progressive credit unions are going even further--asking supervisory (and audit) committees to expand the scope of their efforts to include the idea of risk beyond just financial risks. As such, some supervisory committees are taking a more active role in helping to encourage the credit union’s enterprise risk management efforts--working in cooperative partnership with management, including the CEO and CFO--to identify and mitigate key risks facing the credit union. How far does your supervisory committee go? And how would you and your colleagues on the board answer the question, How effective is your supervisory committee’s analysis of the top operational and strategic risks facing your credit union? Previous Next

< Back Effective Communications in the Board Room Jennie Boden Feb 1, 2019 Key Findings for Communication A great number of the governance challenges that we come across in the work that our firm undertakes with credit unions can be boiled down to matters of communications. Are your board members crossing over into day-to-day operations? Well…have their roles and responsibilities been clearly defined, updated and effectively communicated to them? Are there two or three (or even just one) members of your Board who are coming to meetings ill-prepared each and every month? It’s probably time for your Board or Governance Committee Chair to have a heart-to-heart, one-on-one conversation that may be long over-due. Is the relationship between your Board and CEO riddled with micromanagement, executive sessions and a lack of trust? It’s possible that you stopped having authentic, open dialogue far too long ago. After years of surveying credit union Board members, supervisory committee members, CEOs and senior staff members, Quantum Governance, along with CUES, recently published T he State of Credit Union Governance 2018: Five Data-Driven Recommendations for Future Success (State of CU Governance). There were three key findings relative to the need for more open, trusting communications that both surprised and troubled us. We encourage you to take notice of them and discuss these key findings with your board. If your credit union is struggling with any of these issues, it might be time to polish your own communications skills – individually and as a group. Key Finding #1 : More than 1/3 of the respondents that we surveyed report that their board does only an adequate or less than adequate job of asking the hard questions that need to be asked . Key Finding #2 : Thirty-nine percent (39%) of respondents reported that their board is only adequate or less than adequate at holding each other accountable . Key Finding #3 : And only 25% of CEOs and 27% of senior staff reported that their boards are very effective at building a leadership culture of trust – compared to 53% of supervisory committee members and 44% of board members. So, what’s happening at all of these credit unions? We were recently working with a credit union that received what we would term “Below Average” scores on survey questions regarding “accountability” and “asking the hard questions.” ‘Where do we begin,’ they asked. Luckily for them, their score on the “Trust” question was particularly high — a good place from which to build. They were quick to say that they all got along and worked well together – maybe too well together, perhaps? How many of your board votes are unanimous? Are your Board members held accountable when it’s appropriate? And, how many hard questions are you asking in your board meetings? The mark of a good board is not unanimity or harmony 100 percent of the time. Your job as a board member is to ask good, hard questions. To trust but verify. In a respectful and professional manner. All toward the good of the credit union. Be authentic. Be direct. Be open. Keep your promises. Keeping promises builds trust, and you’ll need to rely on strong relationships of trust while you’re holding each other accountable in the boardroom. Speaking of accountability: hold each other accountable as board members. Ask the hard questions that need to be asked. It’s among your most fundamental roles as board members. Previous Next

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

< Back Finding Balance in Board Meetings Gisele Manole Sep 13, 2024 Efficiency vs. Engagement In a recent conversation with a credit union board member, she expressed frustration over the increasingly automated and predictable nature of their monthly board meetings. This shift towards efficiency and expediency has left her questioning the necessity of her presence at all. This sentiment is a stark contrast to the past, where the primary complaint was the lack of focus and excessively long meetings. The Shift in Board Meeting Dynamics For many years, credit union board meetings were often critiqued for being too operational and detailed, often described as “chasing too many rabbits and catching none.” These meetings were lengthy and lacked substantive discussion. However, it seems that in the quest for efficiency, for some boards, the pendulum may have swung too far in the opposite direction, sacrificing curiosity and meaningful dialogue for expediency. Striking the Right Balance As with many things, the ideal approach lies somewhere in the middle. While asking questions is a sign of engagement, asking the wrong questions can indicate a lack of understanding of a director’s role. My colleague, Paul Dionne, recently wrote about achieving balanced, strategic-level dialogue while efficiently meeting fiduciary, legal, and regulatory obligations. The Traditional Role of Credit Union Board Meetings Historically, credit union board meetings have emphasized the formal role of the board. A routine agenda was often used to move from one report or policy issue to another. Board members were present to receive information, provide fiduciary oversight and make quick decisions when necessary. Many decisions were made immediately or at the beginning of the meeting, with strategic questions and generative dialogue often seen as obstacles to their progress. The Need for Generative Dialogue To foster a more engaging and productive board meeting, it’s essential to incorporate generative dialogue. This means creating space for strategic questions and discussions that go beyond routine reports and decisions. Encouraging curiosity and deeper engagement through thoughtful questions can lead to more meaningful outcomes and a stronger connection to the credit union’s mission. Perhaps not all questions need to be answered right away. Perhaps the best questions linger and fuel conversations for many meetings to come. If the question has a finite answer like yes or no, it’s likely operational in nature. What are some other helpful cues to guide strategic, board-level questions? Operational Indicators: Is it about the past or present? Is it about day-to-day operations? Is it about how you should get there? Strategic Indicators: Is it future-oriented? Is it central to your vision, mission or strategic goals? Is it about where you should go? Finding the right balance between efficiency and engagement in board meetings is crucial. While it’s important to maintain focus and avoid operational detail, it’s equally important to encourage strategic thinking and meaningful dialogue. Previous Next

< Back A Matter of Culture Michael Daigneault Apr 1, 2014 What drives yours? Here are 10 elements to shoot for in your board room. I ask credit union leaders a lot of questions… Indeed, asking questions is one of the best things effective consultants do. Some of my questions have proved fairly easy to answer; some, much more difficult. In recent years, one of the most challenging questions for many credit union CEOs and board leaders has been: “What type of organizational culture are you trying to foster at your credit union?” The difficulty in answering this question has led me to ask a second question, which has proved even more vexing: “What type of leadership or governance culture are you trying to foster at your credit union?” I have tried to discover what makes it is such a challenge for leaders to answer to these fundamental questions—particularly at the CEO and board levels. Perhaps the notion of organizational or leadership culture is something they haven’t had the chance to think a great deal about? Perhaps they have been focused on other things—like survival, economic shifts, new regulations or financial ratios? Maybe culture is something credit union leaders simply accept as-is—or take for granted? Maybe the very notion of organizational culture—as applied to a credit union or its governance—is confusing and needs to be clarified? (It is a fairly new construct, dating back perhaps just a few decades.) Or maybe it is all of the above? Uncovering why it is so difficult to answer the “governance culture question” has taken me on a recent quest to figure out what organizational culture is at a deeper level—and to try to better understand why many experts feel culture is so important to organizational success. For example, in 2010 organizational culture guru Edgar Schein warned that “cultural understanding is desirable for all of us, but it is essential to leaders if they are to lead.” Jim Dougherty wrote in a 2014 Harvard Business Review article that “company culture is part of your business model,” and “the single most important attribute to successful companies.” If these experts are right—and culture is somehow central to success—then we should try to uncover the hurdles CU leaders face in understanding, articulating and building the culture of their institutions. In particular, we should try to identify and overcome any leadership and governance culture challenges leaders may face. What is ‘Organizational Culture?’ Every credit union has a culture. Just what that culture is can be hard for its leaders to describe—even if they have been with the credit union for a long time. Although long-tenured board members often feel they understand their CU well, they are frequently too close to it to really take a step back and identify the unconscious beliefs and assumptions that have been guiding their decision-making. It is, as such, a real challenge for board leaders to really see their own organizational culture. This can be the case concerning the CU overall (where leaders do not always have the kind of institutional access to pick up key cultural cues) and at the governance level (where leaders may be too personally involved to identify the underlying assumptions with any degree of objectivity). In his book Organizational Culture and Leadership , Edgar Schein formulates a formal definition of organizational culture, the essence of which is this: “what a group learns over a period of time as it solves its problems of survival in an external environment and its problems of internal integration.’ This leads us then to a new pair of questions you should yourself ask about your credit union: How much is your organizational culture simply an unconscious by-product of your founders’ or key leaders’ leadership style? And, on the other side of the coin: How much is your organizational culture the result of a conscious attempt to shape its values and assumptions? This last question brings us to look deeper into how credit union leaders can work together to improve their organizational and leadership culture. How Do Leaders Create or Change Culture? If you have been trying to make changes in how your organization works, you need to find out how the existing culture helps or hinders you. Accordingly, you need to determine what assumptions operate within the existing culture. Schein groups assumptions into three basic levels: 1) artifacts—all of the surface things you would first observe, see, hear or feel when you encounter an organization; 2) stated beliefs and values; and 3) basic underlying assumptions—the unconscious, taken-for-granted beliefs and values of the group. In 1983, Schein wrote that when organizations first form, there are usually dominant figures or “founders” whose own beliefs, values and assumptions provide a visible and articulated model for how the group should be structured and how it should function. As these beliefs are put into practice, some work out and some do not. The group learns what parts of the founder’s belief system work and which should be left behind. This learning gradually creates shared assumptions. Founders and subsequent leaders continue to attempt to embed their own assumptions, but increasingly they find that other parts of the organization have their own experiences to draw on and, thus, cannot be changed. Increasingly the learning process is shared, and the resulting cultural assumptions reflect the total group’s experience, not only the leader’s initial assumptions. But leaders continue to try to embed their own views of how things should be and, if they are powerful enough, continue to have a dominant effect on the emerging culture. Board members need to be able to take a step back and reflect on how your organization either challenges (or doesn’t) these assumptions. Be aware that your response will be tainted by your own influence on the culture you have helped to build. This is where an unbiased third party who can remain objective and observe your board’s dynamics may be helpful. If you are trying to examine (or change) your governance culture, you may also find yourself fighting against the organization’s design and structure; organizational systems and procedures; the design of physical space, facades and buildings; stories, legends, myths and symbols; and formal statements of organizational philosophy, creeds and charters. Changing culture can be difficult, particularly because sometimes culture can act as a protective mechanism, with each existing assumption working to reinforce and support the other. If you try to change one assumption in isolation, the others will push back to reinforce the status quo. Assumptions are also driven by the individuals or groups who have influence within the organization. If you want to change the culture, you sometimes have to foster a culture change within your organization’s current leaders, or modify the organization’s core governance philosophy as well as its policies and procedures. While often the most effective, changing the behavior of key leaders can be so hard that modifying the core governance philosophy is often the best opening move. When all else fails, a change in personnel may be required. But there is hope. Change can happen. It takes a focused effort and commitment to the following types of primary mechanisms: what leaders pay attention to, measure and control; how leaders react to critical incidents and organizational crises; deliberate role modeling and coaching; operational criteria for the allocation of rewards and status; and operational criteria for recruitment, selection, promotion, retirement and expulsion. 10 Elements of an Effective Culture Once you and your colleagues—both the board and the senior staff leaders–have effectively recognized and thoughtfully discussed the underlying assumptions driving your current credit union leadership culture, you can turn your attention to identifying any weaknesses or gaps and shape a more effective leadership culture for the future. I challenge you to address each of the following 10 key elements to build an effective board culture for your credit union. 1. Commit to a culture of engagement. Nothing really improves unless the board and senior staff are actively engaged in the process. This means leaders have to do more than just attend monthly meetings and listen. It means they have to do their homework, and be genuinely prepared. It means they have to show up and actively engage in discussions. That way, they can co-create with senior management the future of their credit union. It’s the responsibility of senior staff leaders and all board members to be familiar with the credit union’s key programs and strategic initiatives. It’s also the responsibility of leadership to work together to improve them. To do so, you must be engaged. 2. Join with management to foster a culture of teamwork. There is a lot of literature in the business world on the importance of teamwork, but seldom is it applied directly to boards. Taking a page from Management 101, you and your colleagues must join together to foster a culture of teamwork. And not just among yourselves—be sure to include members of your credit union’s senior leadership. Who else will work with you, shoulder to shoulder, during times of challenge? Evaluate opportunities with you? Celebrate the successes with you? Share the burdens? 3. Build a culture of curiosity. Socrates was recognized by Oracle at Delphi as one of the wisest men on earth because he was a genuinely curious man who was open about what he knew and—perhaps more importantly—what he did not know. Bring your own humility to the board room. Come with an open mind and learn from both your board and senior staff colleagues. Curiosity is one of the most important attributes a director—and a board as a whole—can have. 4. If you are able to develop a culture of curiosity , you’ll likely also foster a culture of learning. You and your colleagues will bring to the table your own personal curiosities and, combined together, you will move in the direction of what Peter Senge, a leading 21st century management theorist, has called a “learning organization.” Indeed, you can then begin to look at board room (and many committee meeting) experiences not through the lens of “necessary data exchange,” but the lens of “collective learning.” Culture is a learned experience and learning models should help us to better understand culture creation and change. 5. To support your learning, you and your colleagues will need to foster a culture of inquiry. You will need to revise the very nature of your board meetings so they encourage a genuine dialogue and exchange of ideas, a culture in which great questions are recognized and appreciated. Gone should be the days of stale committee reports or—worse yet—committee reports that simply mirror the written briefing materials. 6. All this communication requires that CU leaders maintain a sincere culture of respect. Respect does not mean agreeing to everything anyone else suggests. It does not simply mean being “nice.” It does mean deeply listening to—and honoring—other leaders’ voices in the process of decision-making. It also means valuing others’ contributions and knowing the boundaries of the role you each are carrying out. 7. Be mindful that you have all committed your time, talents and expertise to the CU board for the same reason—to be of service. Focus on that commitment. Build a culture of service, remembering that the roots of the CU movement are deep. For more than 100 years, credit unions have been providing quality financial services to their members. Above all else, we are driven as a movement by our commitment to cooperative principles. Voluntary and open membership, member economic participation and rewards are at least as—or more important than—the bottom line. 8. Because you are stewards of other people’s funds and have committed to a culture of service, you and your colleagues should—and will—be held to a very high standard. You will need to, therefore, build a strong culture of diligence. Some components of this part of your culture will be informal. Together you and your colleagues will determine mutually agreed-upon standards and expectations for how you will act and govern the CU. Other, more formal standards will be imposed upon your CU by regulators. In either case, you and your colleagues must pledge that together you will be eternally vigilant on both the formal and the informal standards guiding your decisions and actions. 9. As stewards of other people’s funds, and because as a CU you are committed not only to a culture of service but also to cooperative principles, you must commit to a culture of accountability. Of course, you must hold each other accountable and, clearly, accountability extends to your credit union’s CEO and, ultimately, the staff. You must model a culture of respect from the top-down, the same way you must model accountability. 10. Ultimately what every organization wants to build is a culture of trust. You want a trusting relationship with your members, your staff, your regulators and with the public. It’s the right thing to do and can only benefit your business bottom line as well. In all, building a culture that breeds success for your CU will not be an easy journey, but is certainly one that’s worthy of the effort. Challenge your organization’s long-held assumptions. Commit yourself. Be engaged. Ask your questions. Leave your ego at the door. Respect one another. Hold each other accountable. And do the right thing. Having done so, you will earn the trust that your members place in your leadership! Previous Next

Shannon Zayas VP of Operations & Senior Consultant Shannon is the hub of the wheel and the key interface between Quantum Governance’s team and all clients. Shannon is a focused, thoughtful and disciplined leader who oversees many of the operational functions of running the firm from fielding studies to staffing and financial oversight. Shannon worked at Achikian Goldsmiths, a regional retailer where she played key roles in sales, marketing, business solutions, research and accounting. She started her career in the Audit and Advisory practice at KPMG, LLP where she assisted and led audits of public companies in the firm’s consumer and industrial business lines out of both the Philadelphia and the St. Louis offices. Shannon graduated from Virginia Tech in 2001 with a B.S. in Finance and in 2004 with an M.S. in Accounting, and lives in Maryland with her family. Back

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

< Back Director Onboarding Post-Election Michael Daigneault Dec 22, 2015 9 steps to take to help new directors serve well In a previous Good Governance column on CUES , I talked about the importance of having a process in place to identify potential board members, introduce them to the credit union and, eventually, ask them to run for the board. Once directors are elected, you’ll need to build a robust, comprehensive onboarding program that includes such elements as: Public announcement of the election. Kick off your orientation program (and a welcome to the board) with a public announcement of your new colleague’s election. Use this opportunity to get to know your new director and for him or her to know the credit union more closely. Hold both formal and informal board orientations for the board and staff. This is the easy part. Schedule formal briefings with both the board and staff for your new director. From our experience, this is where most credit union orientation programs start … and, sadly, where they also stop. Appoint a mentor or guide. Identify a seasoned director to mentor and guide your new colleague for the first year. The mentor can answer questions on a one-on-one basis, accompany the new board member to credit union events and generally help shepherd the new director through the first year. Schedule regular check-ins by the board chair or mentor. Have regular de-brief conversations to “check in” with your new board members to answer any questions and take their pulse within the first two months. Schedule an informal meet and greet event. To introduce your new director to the full board, host an informal event, either before or after his or her first meeting, to welcome your new director to the ranks. Have the chair appoint the new director to a committee or taskforce. After a period of time, and in consultation with the new board member, appoint him or her to a board committee or taskforce. Be sure he or she is well oriented and welcomed by the committee or taskforce chair. Schedule regular check-ins by the board chair and/or mentor. Schedule another check-in at three to six months. Encourage participation in external educational opportunities. Expose your new board member to external educational opportunities, such as national conferences offered by CUES. Schedule regular check-ins by the board chair or mentor. Schedule another check-in in the 6- to 12-month time frame. In addition to the steps outlined above, some credit unions have developed associate director programs in which new directors join in a non-voting capacity before any official positions become available. Still others use their supervisory or audit committees as effective training grounds for new board members. Remember, ultimately, you are bringing a new colleague into the fold. I know that for many of you, it may be difficult to remember back to your first board meeting. For some, it may have been 20-plus years ago. And the times have changed dramatically. What you needed to know then and what your new colleagues need to know now is night and day. Develop a plan. Be persistent. Be patient. But above all, prepare your new board colleagues well. 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