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< Back Who Needs A Shadow Board? Jennie Boden Jun 25, 2024 Add younger employees and members directly to your C-suite and board to benefit from their skills and knowledge today. I read with interest a Fortune article entitled “ Companies are turning to ‘Shadow Boards’ to keep in touch with the real world .” The author, Lila MacLellan, defines a shadow board as “a committee of typically younger employees who come together within a firm to advise the management team on key topics, such as company culture, product marketing, trends in technology, and sustainability efforts.” She continues, noting “They are not an official board, of course, but their views often supplement those of experienced, much older corporate directors and C-suite leaders. “These advisory groups give some businesses insight into their customers’ tastes and passions.” MacLellan reported that companies like The Body Shop have embraced the trend, and her colleague, Fortune ’s Orianna Rosa Royle, recently found that The Body Shop developed its shadow board, with its members aged 30 and under, “when it became aware of the gap between the company’s youngest workers and its leadership team and directors.” After reading the article, a colleague of mine posed a logical question: “Would shadow boards be a good strategy for credit union?” The question made sense. After all, our own 2023 State of Credit Union Governance recently found that 89% of credit union board members are aged 51 or older, and the average age of most credit union members in North America is 53. But here’s the thing. Creating another board isn’t a ready-made solution to the problems of an aging board and membership. In my mind, it’s simply a workaround. In our work, we’ve found that most credit unions struggle managing the governing boards that they already have. Many credit union boards have failed to evolve their governing roles and responsibilities even as their credit unions have grown around them—from financial institutions with assets of $250 million to those with well over $1 billion; some face challenges with that ever-elusive balance of authority between the board and the CEO and still others are still lingering “in the weeds” too much, not finding their stride in being strategic thinkers. Marie Kondo has ushered in the era of “tidying up,” not “cluttering up.” You must attend to that which you have, and like I said, too many governing boards are already flying under the radar, receiving too little attention. Why add another? Instead, add those younger employees and members directly into your C-suite and onto your governing boards— of course, given that they meet the requisite qualifications . Don’t keep them waiting in the wings until they reach some magical age where you deem them acceptable for full service. Benefit from their skills and knowledge now. A Gen Z member of our team recently sat in on a webinar proclaiming to share insights into the mind of the Gen Z credit union member. It was taught by two individuals in their 50s. In. Their. 50s. To be fair, our team member said they got some things right, but they also got a lot of things wrong. After, we asked her to present to our team what she thought that members of her generation were looking for from their financial institutions. You know what she said? Hope. To learn more about what Gen Zers really think, read this May blog from Quantum Governance’s governance administrator, Lauren Paradise. Previous Next

< Back The Board And The CEO Should Play Doubles Tennis Michael Daigneault and Jennie Boden Apr 23, 2019 The constructive partnership between directors and the chief executive is a lot like teammates on one side of the court. If you’ve spent any amount of time with us folks at Quantum Governance—either at a large, general session at a CUES conference or in a private, retreat setting, you know that we talk a lot about the importance of the “constructive partnership” between the board and the CEO. We spend a key portion of our governance training covering this very issue—framing the dynamic balance of authority between the two and suggesting that a key to mutual success is that they focus on working together as “teammates.” What do we mean by that? Well, we often ask participants to picture the great tennis players Venus and Serena Williams playing together as a doubles tennis team. Yes, each should bring her unique abilities to the challenge, but that does not mean one sister should overwhelmingly dominate the play on their common side of the net. When out on the court playing a doubles tennis match, they cannot (in the moment) be focused on “Who is in charge? or “Who is the better tennis player?” No, they’re understandably focused on who is in the best position to return the next shot as it comes over the net. Indeed, they are hyper-focused on working together as a team to bring out the best in both of their abilities! The same is true in the board-CEO relationship. There are roles and responsibilities that fall into the board’s side of the court (i.e., hiring the CEO). In the same vein, it should remain the CEO’s sole responsibility to hire his or her management team and staff. But what about when it comes to determining the strategic plan that will drive the future of the credit union? Doubles tennis best defines this part of the effort to be sure, with the board, CEO and management team working in constructive partnership to co-create the best strategic plan for their credit union and its members. One of the key findings in our report “ The State of Credit Union Governance, 2018, Five Data-Driven Recommendations for Future Success ” was that this all-important team (the board and the CEO) frequently differ on their perceptions of governance. And that difference in perception is great, with little agreement on 84% of their responses on the vast majority of the survey’s key questions. This finding led us to recently add a new question to our governance survey: How effective is the board at maintaining a good working relationship with the CEO? On a scale of 0-4, the responses thus far have varied wildly, with one credit union scoring a perfect 4.0, and another scoring less than a 1.0. How would you rate your board’s relationship with your CEO? Consider all of the facets. Is your board appropriately staying out of the weeds? Are you working in constructive partnership in the areas that really count? Do you have a high level of trust with your CEO? Are you giving your CEO genuinely effective performance feedback? Is your board asking the hard questions that need to be asked, as you “trust but verify”? And is your CEO comfortable with your hard questions and in agreement with you in your collective understanding of the role and responsibilities of the Board? The law vests the ultimate authority and responsibility for the credit union in the board, Ram Charan put it this way in his book Boards that Lead , the real role of the board is to understand: 1) when to lead, 2) when to delegate and 3) when to partner with your CEO and his or her management team. Are these three areas crystal clear for you and for your CEO? If not, we fear that your score would be far from that perfect 4.0 on our new governance survey question, and this is likely one of the most important and critical governance challenges that your credit union must identify and overcome. Previous Next

< Back Weaving a Single Garment of Destiny Michael Daigneault Jun 23, 2020 The key threads include equity, diversity and inclusion. All three are needed for the best leadership and governance for your credit union. The recent events in the United States—no, this time, not COVID-19—the recent events surrounding the urgent call for equality led me back to Martin Luther King, Jr.’s letter from a Birmingham jail . I often return to this brilliant piece of literary history, from which I find great guidance and direction, but never so much as I have recently. In his letter, dated April 16, 1963, he wrote: “We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly. Never again can we afford to live with the narrow, provincial ‘outside agitator’ idea. Anyone who lives inside the United States can never be considered an outsider anywhere within its bounds.” Never have truer words been spoken of these, our United States, or indeed the world. But we should also take an important lesson from these words for the organizations that we lead. I hear so much lately about organizations and boards—particularly in the credit union space—taking up the cause of “DEI,” or diversity, equity and inclusion. In fact, in our 2020 State of Credit Union Governance , diversity was listed as the highest priority when recruiting new board members among those surveyed. As those at BoardSource , a national organization working to empower boards and inspire leadership, say, “As the decision-making body at the highest level of organizational leadership, boards play a critical role in creating an organization that prioritizes, supports and invests in equity, diversity and inclusion.” And I couldn’t agree more. But, it’s important to know what these three terms really mean. (Note: BoardSource re-orders the three from the usual “DEI” to “EDI.” Quantum Governance believes that this is actually the appropriate order, given that the notion of equity is a broader concept that underlies both diversity and inclusion.) And, while they are often used interchangeably, they have very different meanings: Equity is a conscious and thoughtful awareness of how systemic inequalities have affected our society, individuals and all those an organization serves. As stewards of the public good, all social sector organizations (regardless of their exact mission) are called on to embrace and celebrate the inherent worth of all people. Boards and credit union leaders need to play a vital role in understanding this context. Deeply appreciating the fundamental concept of equity creates powerful opportunities to deepen an organization’s impact, relevance and the ultimate advancement of the public good. Diversity is the mix of people involved in leading, staffing, volunteering and moving forward the mission of your credit union (or any group for that matter). It is focused on a range of folks from different backgrounds, with varied personal characteristics or attributes who are engaged in the work of the organization as board, staff, volunteers, vendors and members, as well as the people and communities your credit union serves. Inclusion is about authentically valuing the benefits that diverse people bring to the organization. It is about the conscious and unconscious culture of the credit union and how it values (or not) the contributions that “everyone brings to the table.” It frequently describes how people from a spectrum of backgrounds are genuinely woven into leadership, operations and membership of the organization, how their perspectives are genuinely heard and valued, as well as how their needs are thoughtfully understood and respected. Therefore, Equity is embracing, celebrating and respecting the essential worth of all people and ensuring that our common humanity is honored. Diversity is getting a genuine—and expansive—mix of people at “the leadership table” or within a group. It does not sacrifice quality or competence on your board. Indeed, it is designed to enhance it. Inclusion is a shared understanding to authentically listen, to actually hear and justly value what people have to offer, contribute and say. And, all three are needed! Without each of them working together, one supporting the other, your credit union’s governance and leadership will fall short of where it surely needs to be. Previous Next

< Back Gender Equity In The Boardroom: We're Not Done Yet Jennie Boden Aug 25, 2023 Boards still have work to do to support their female directors and wider DEI&B efforts. Gender politics, like all politics, can be polarizing. At the risk of taking a polarizing position, I can't ignore a string of recent encounters that prompt the question: Would that have happened if I (or she) were a man? If you’ve read my posts before, you may know I regret that as a society we still need a publication entitled Advancing Women , but I’ve come to realize that it’s an imperative. If we don’t call out the subtle (and sometimes not-so-subtle) gender biased actions that minimize the voices of women, it’s akin to deferring to only the male perspective. After observing a recent credit union board meeting, I watched with concern as a female board member walked out with her head hung low. Later, I spoke with her as a part of our formal assessment process. I learned then that the board chair—a man—had admonished her about her behavior in the meeting—behavior that hadn’t even registered a raised eyebrow with me (and I’ve conducted hundreds of meeting observations over the years and seen and heard plenty of eyebrow-raising behavior). It’s interesting to also note that a male director had spoken very rudely to a fellow board member in that same meeting, and I don’t believe he received feedback from the chair regarding his behavior. While with another client, I witnessed a long list of follow-up and action items being delegated to the only female on the board, prompting a hearty round of laughs from her male colleagues. I, too, have had my own experiences in this regard. For example, I have recently been challenged by men both about my presentation and facilitation style, correcting my cadence and tone. These conversations are impossible to imagine if I were male. In these instances, I wondered: Would these men have acted in the same way toward us if we were men? The informal poll I’ve taken, among both men and women, resulted in a resounding “No.” Don’t Let DEI&B Efforts Disappear While gender is just one of the many elements of diversity, these three recent experiences tell me that a commitment to diversity, equity, inclusion and belonging remains vital. And even more so now, given that LinkedIn released a report last year that found the hiring of chief diversity officers dropped in 2022 after “experiencing significant growth in 2020 and 2021.” An article on the Society for Human Resource Management’s website referenced the LinkedIn study and quoted Amy Hull, director and head of DE&I at Paycor, a global leader in human capital. Hull “said the LinkedIn and Revelio data shows that the pledge to impact change was not followed by genuine effort.” Even our own research at Quantum Governance suggests that our colleagues in the credit union space may not really value demographic diversity. One of our recent studies found that only 35% of credit union board members are women, compared to 51% of the total adult population in the United States. And when we asked those in the credit union community (board and supervisory/audit committee members, CEOs and members of senior management) what they valued most in their boardrooms, demographic diversity ranked sixth out of 13 . What’s of real interest, though, is that for two years running, Filene researchers Quinetta Roberson, Ph.D., and McKenzie Preston found that “creating governance and accountability systems” around DEI “are paramount to the development of a sustainable approach to DEI that activates real change and drives financial performance.” In the previous year’s study , those same researchers also noted that “diversity may create advantages in terms of market growth, enhanced member experiences, risk management and increased strategic performance. Yet … it is not enough to simply have diversity. Effective solutions for building and maintaining fair and inclusive work environments are needed to leverage the potential for DEI to achieve its performance objectives and develop sustained competitive advantage.” And, I would add, to truly achieve change. I will admit some people do need some coaching on their delivery, and I am always open to learning. Additionally, the board chair is certainly in a position to insist on civility in all manner of dialogue and address situations where it is lacking. However, it’s critical to apply “the rules” unilaterally—to provide a forum where every voice and perspective is heard and valued. Women serving on credit union boards are, like their male colleagues, professionals. They are not supporting members, taskmasters and coordinators. Their roles and responsibilities include the same level of strategic thinking, planning and inquiry as their male colleagues. And before you give a woman subjective and stylistic advice on her self-expression, consider whether you would be so bold as to provide the same advice or subjective feedback to a man. Previous Next

< Back A Matter of Leadership Michael Daigneault Apr 1, 2015 CUs need to pave a new road to ensure a strong, high-performing board over time. Perhaps one of the most vexing and controversial challenges facing the credit union community today concerns the fundamental question: How can a credit union ensure ongoing, effective governance and leadership? One of the historical building blocks of a CU is that it is a cooperative. It has long been thought that financial cooperatives will be best led by members who have an actual financial stake—or share—in the CU itself. Since their own money is invested in the CU, it is widely assumed they will be aware of—and appropriately engaged in—the proper oversight of the credit union’s financial affairs. CU members accomplish this by electing a board to take on a set of responsibilities designed to help ensure the safety and soundness of the members’ resources, as well as the effective governance of the CU. The current state of credit union governance is, however, being severely challenged by a rapidly changing environment and a sometimes stagnant board. (Read a bonus article, “ The Nine Leadership Challenges , ”.) One of my senior consultants came to Quantum Governance from the general nonprofit sector. She was stunned when assigned to her first credit union client. What she found was a group of directors, the majority of whom had been in their positions for well over 20 years. Because of the long-time tenure of these board members, the institution was facing the wholesale turnover of both its board and its CEO in the next few years. By holding on so long, the board members actually ended up endangering leadership continuity—exacerbating the very problem they professed to be solving by their continued service. The time has come for boards to reframe and “rebalance their responsibilities,” as Ram Charan has noted in his new book, Boards That Lead: When to Take Charge, When to Partner and When to Stay Out of the Way . Yes, board monitoring and oversight are still important, but they are no longer sufficient. The reality is that for many CU boards, more effective leadership is needed. What Leadership Leads To At Quantum Governance, we talk with a lot of credit union board members and, unfortunately, what we’re hearing from them about their ability to effectively lead and govern isn’t altogether positive. The following data is from our 2014 credit union compendium: More than 25 percent of all board members we’ve surveyed think their board is “less than effective” at building a leadership culture of trust. Thirty-seven percent think they are “less than effective” at holding each other accountable. Only one in five board members thinks their board is “very effective” at asking the hard questions that need to be asked. Twenty percent of board members say they are “ineffective” or only “adequate” at acting decisively when necessary. Sadly, about one in three directors says their board leadership and governance culture are “less than adequate” overall. Importantly, credit union boards are struggling to find the right people to serve—with only 18 percent saying they are “very effective” in doing so. How to Get More Effective Leadership So what’s a credit union to do? Renewing the strength of your board and its leadership can be accomplished using various techniques. If you answer “no” to even a few of the questions in the following section, you’ve got some work to do. And you need to get moving, or you’re likely to get left behind. Way, way behind. Board assessment. Is your board working on strengthening its governance practices? Are you reflecting on what’s going well and where you’re struggling? How are your committees functioning—especially your supervisory committee? Have you and your colleagues committed to a regular process of board evaluation? Training for needed competencies and strengths. Are you undertaking a robust training initiative that responds to your assessment results by strengthening your directors’ intellectual capacities and stretching the boundaries of current discussions? Do your fellow directors return from the latest CUES or other conference full of ideas and enthusiasm? (Read “ Starting Point ,” about developing plans for director learning, in this issue.) Associate board member program. Have you considered an associate director program that will afford up-and-coming volunteers the ability to learn about your credit union’s business “from the ground up?” Are your committee rosters creatively drawing from non-board members–those in the community who could foster a wider sense of support for the credit union and support your associate director program? Do your recruiting “tentacles” go beyond the supervisory committee? (Also read “ Working in the Governance Wings : Strategies for readying volunteers to give a good performance once on the board”) Term limits. This practice is rooted in one of the central principles of maintaining board effectiveness over time and the idea of creating (and sustaining) a careful balance between historical continuity and rejuvenation. A big potential benefit of limiting the length of service of credit union directors is fostering an influx of new talents, skills and energy to the board as a whole, as well as among board officers. Of course, there are a number of traditional challenges raised concerning term limits. Some credit unions fear losing valuable board leadership and institutional knowledge. (Get ideas for minimizing this risk ) It takes time to really understand the issues at play within an organization—and credit unions are complex financial organizations. Some believe it imprudent and inefficient to spend valuable time and energy getting board leadership “up to speed,” only to then urge them to move on at the close of their tenure. Another frequently raised concern is an actual or perceived shortage of suitable or willing candidates. Such a shortage of qualified candidates can be an authentic challenge—or simply the net result of very low turnover. Of course, if a board officer or member has proved effective, there are some who would suggest it is entirely appropriate to maintain the status quo because “if it ain’t broke, don’t fix it!” Certainly, I’m not saying that term limits are the answer. They are, clearly, only one tool. But they can be a helpful tool for your board’s leaders. Rotation of officers. Additionally, it is helpful to periodically rotate directors through board officer positions so a sustained concentration of power in a limited number of individuals (either actual or perceived) does not occur. Rotating board officers also helps an organization from getting stuck with just one leadership style. Board officer rotation is also thought to strengthen the pool of candidates willing to serve. This is due to the common occurrence that some will naturally aspire to board leadership roles—but only if it is perceived there is an authentic opportunity to attain a leadership role after a reasonable period of time and service. Finally, a lasting concentration of authority in a select, few individuals is, I believe, contrary to cooperative governance principles. Know the true role of the board chair. While there are courageous conversations that need to happen at the chair’s level when a board member is failing to live up to his or her fiduciary responsibilities, strengthening the leadership of the board is not just your chair’s responsibility. As a board member, it’s your responsibility to truly be engaged. Don’t simply attend the meetings and go through the motions; be an active player. A board member recently told me that he estimated about 70 percent of his colleagues barely even spoke at his CU’s board meetings. Is that leadership? Your members are depending on you. More Than Incremental Improvement The challenge I would place before you is this: Are you entirely sure your current situation isn’t broken? Fundamental or truly transformational changes—not just incremental—are what your credit union must undertake to craft the exceptional board of the future. A board that can truly help to overcome the types of challenges facing credit unions. It will take exceptional board leaders, working in constructive partnership with management, to be successful. It is likely that some of the leaders you need to move forward are already on your board; it is equally likely that some leaders you need to meet such challenges are not. I couldn’t agree more with author Michael Hudson, Ph.D. in his Credit Union Management Article, "When Directors Step Down:" Directors, when it’s your time, have the courage to step up and step down. Board chairs, you have an important role to play, too, in board rejuvenation. Have the hard conversations. If someone isn’t participating or truly adding value, it’s your job to find out why, and—if need be—help find someone who will. In the end, no single tool, technique or individual strategy is a substitute for what is needed most at this pivotal time in the credit union community and that is, of course, courageous leadership on the part of every member of the board. Previous Next

< Back Who's on Your Board Today? Tomorrow? Michael Daigneault and Jennie Boden Mar 27, 2018 The State of Credit Union Governance, 2018 report finds credit unions are more certain of their current mix of directors than they are about the future composition of their boards. Here’s what this means for board renewal. Data from our new report, The State of CU Governance, 2018 , find that the majority of credit unions feel pretty good about who’s currently on their boards—but are much less sure about the future.Almost three-quarters of survey respondents (74 percent) of respondents report that their boards are “effective” or “very effective” at having the right mix of skills/experience to accomplish [their] governance roles and responsibilities. But remarkably, almost half of all of the survey respondents (46 percent) describe their effectiveness in “attracting the right people to serve on the board” in the future as only “adequate,” or “ineffective” or “very ineffective.” Figure 1: Attracting the Right People to Serve on the Board - Overall Our experience is that your collective worries about attracting the right folks to serve on your credit union’s board are well-founded—and things may get worse before they get better! The number of board members available to serve in the coming years is likely to shrink. Using generational definitions from Pew , the Boomer generation (born 1946–1964) consists of 76 million people and is shrinking. Generation X (born 1965 – 1980) is estimated to be only around 55 million people, causing a significant lack of potential board members for a good number of years until the much larger millennial generation (born after 1980) begins to peak. This means that you and your board colleagues will be competing more and more for fewer and fewer potential board members. In his book, Generations: The Challenge of a Lifetime for Your Nonprofit , Peter C. Brinckerhoff notes that both members of Generation X and millennials typically volunteer for different reasons and in different ways than members of the Boomer generation. Brinckerhoff goes on to say that members of the Boomer generation historically committed to volunteerism in support of institutions, whereas younger generations volunteer in support of people and issues rather than organizations. They often prefer discrete projects rather than large commitments, and they can experience all that volunteerism has to offer without having to be commit to regular “face-time,” all of which goes against traditional board service. So, how do you attract, and then keep, the ever-elusive millennial? Here are a few do’s and don’ts to consider as you work to refresh your board’s membership: DO: Talk about your credit union’s mission. Millennials are often cause- or mission-driven, but ensure that you’re talking to them in language they understand, using today’s technology. Mix your credit union’s business with passion. Ensure that your board meetings are not all business. While addressing the business of the day is important, see that you are also addressing the broader, strategic impact that your credit union is having (see point No. 1, above). Bring them on in multiples. That is, don’t just add one millennial at a time to your board or its committees; add a number of them so that they don’t feel like a token (see point No. 1, below). DON’T: Treat them as tokens. It seems like everyone is talking about adding a millennial to their boards. Ensure you have a meaningful role for them to fill on your board and its committees (see also point #3 above). Under-estimate their abilities & skills. They have a lot to contribute; ensure that you are listening and learning from them. Think of them as “kids.” While for many board members, they may be the same age as your kids, they are not your kids. Treat them with the professional respect that they are due. Previous Next

< Back The Playground Bully Grows Up Jennie Boden Feb 18, 2022 Who are the workplace bullies, and what can we do about them? I’ve been bullied three times in my life, and as anyone who has ever been bullied can tell you, that’s about three times too many. Luckily for me, each of these bullies entered my life when I was adult. They were professionals, on-the-job bullies. And the last one did the damage just recently. I don’t do well with bullies – at least not when they’re coming after me. I don’t know why, but I just don’t. When my kids are being bullied, watch out. Boy, can my mama bear roar. And some time ago, Quantum Governance had to speak truth to power – lending voice to a good number of scared employees who were being bullied by their CEO. Terribly so. One employee told me, “Everyone’s constantly afraid they’re going to be fired. He walks around here saying, ‘Let’s see, who will I fire today?’” I didn’t hesitate for a moment then. I knew what was right, and so did Quantum’s CEO. It wasn’t news that our client, the board, wanted to hear, much less news that they were expecting. But I’m proud to say that from the chair on down, they reacted with speed and integrity. Heidi Lynn Kurter, in her July 2019 Forbes article entitled “ Workplace Bullying: Four Steps to Overcome It and Fight Back ,” writes that “Isolation, intimidation and threats are just a few tactics bullies use to strip someone of their power and identity. The reasons could be as simple as feeling threatened by someone’s success, personality or being insecure with themselves as a whole…Research shows workplace bullying not only impacts one’s happiness but injures their health, productivity and self-confidence leaving victims feeling stuck and powerless.” Stuck and powerless. Yes. I’ve felt that. We all deserve to be treated with respect. If your employees wouldn't have faith in how you would respond to a report of bullying within your ranks, you've got some work to do. -Jennie Boden, via X (formerly Twitter) We all know what bullying is when it happens to our children or on the playground, and we’ve certainly all heard the horrible stories about cyberbullying. But what is workplace bullying? The Workplace Bullying Institute defines it as “repeated, health-harming mistreatment by one or more employees of an employee: abusive conduct that takes the form of verbal abuse; or behaviors perceived as threatening, intimidating, or humiliating; work sabotage; or in some combination of the above.” The Institute reports that 30% of all adult Americans have been bullied at work. More than 48.6 million of us have been bullied on the job – but a total of 76.3 million workers (or 49% of all American) have been affected by workplace bullying. That means those workers have either been bullied or witnesses to it, which has its own impact, too. More than two-thirds (67%) of the bullies in our workplaces are men and 33% are women, and same-gender bullying accounts for 61% of it all, according to statistics cited by the Institute. Who Are the Workplace Bullies? So, who’s doing all this bullying anyway? I can tell you from our experience at Quantum Governance, and from my own, it’s not just employees who are the culprits. I was bullied by my board chair when I was serving as a chief staff officer, and I’ve seen other board officers and board members – yes, in the credit union community – bully their CEOs and senior staff. It happens. One member of a credit union’s senior staff told me, “When mistakes happen, it feels like the Board really turns the screws on our CEO, even if there are legitimate reasons behind the mistakes.” I’ve even heard about board members bullying other board members. In an interview once, a board member confessed to me, “I feel like I have a target on my back – especially in board meetings.” And recently, someone sent me a series of emails that I found to be “threatening” and “intimidating.” And when the person called me a “nasty woman,” I think, as most women can attest, those words were meant to humiliate me. Luckily for me, we don’t work for the same organization. Unfortunately, workplace bullying may be getting worse. While 6% of respondents to the Institute’s 2021 Workplace Bullying Survey reported that COVID-19 actually decreased harmful mistreatment between workers, a full 25% said that it has increased, and 17% said that it has remained the same: mistreatment was an issue before the pandemic began, and it remains an issue today. Anti-Bullying Action So, what do we do? What am I going to do? I️n her Forbes articles, Kurter shared four helpful steps worth repeating here: Address The Situation Head-On. Kurter notes that while confronting the bully can be intimidating, especially if it’s the board chair or your supervisor, you should still try. Don’t seek revenge or “stoop to their level.” Be clear that they are acting inappropriately and treating you in an unacceptable manner. “As uncomfortable as it may be, practicing courage will show the bully you’re not as easy as a target as they initially thought.” Confide In a Confidant. Find someone trustworthy that you can talk to – someone who will support you.Don’t hold all your feelings inside and isolate yourself. Be sure that you are attending to both your physical and mental health needs. Document Every Detail, Big and Small. If you’re going to report the bullying – either to HR or to your boss, even if your boss is the CEO or the board chair, you’re going to need the facts. Document all the incidents with the date and time, and keep copies of any correspondence. Stick To Facts and Report It Higher. Try to be calm when you are presenting the facts. And if you need to, go higher. And higher and higher. As Dr. Alexander Stein, Founder of Dolus Advisors, said to me this week, “Bullies only remain bullies because most people don’t report them.” And frankly, why would they? The Institute’s study found that employers’ responses to bullying aren’t typically great. In fact, they’re pretty bad. Between 60% – 63% of the survey respondents said their employers’ responses were negative (Encourage It; Defend It; Rationalize It; Deny It; or Discount It) versus the 37% – 40% of the respondents who said that their employers’ responses were positive (Acknowledge It; Eliminate It and Condemn It.) The bottom-line is that we all deserve to be treated with respect. If your employees wouldn’t have faith in how you would respond to a report of bullying within your ranks, then you’ve got some work to do. And if you’re among the 4% of workers or leaders that are doing the bullying, then knock it off. You know better. 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 A Cautionary Tale of Risk Management in This Time of Bank Failures Gisele Manole Mar 30, 2023 Defining roles and responsibilities and continuing education help ensure appropriate coverage. While the news surrounding the failings and futures of Silicon Valley Bank and Signature Bank remains in the headlines, we are learning a great deal about the role that rising interest rates, cryptocurrency and governance played in each organization’s demise. The federal government reacted quickly to minimize panic that might have destabilized the entire banking industry, and National Credit Union Association Chairman Todd Harper was quick to assuage the fears of our nation’s credit union members, saying “No one has ever lost a single penny of insured share deposits within the credit union system.” And while there is much debate about who or what is ultimately at fault, there are important lessons to be learned from these examples about the risk management responsibilities inherent within your own credit union’s system of governance. The International Organization for Standardization defines risk as “the effect of uncertainty on an objective”—a direct correlation to a credit union’s strategic plan. A secondary definition of risk is simply, “managing uncertainty.” This perspective brings front and center the human dynamics at play in measuring and managing risk. And while enterprise risk management can be clearly defined by the Committee of Sponsoring Organizations of the Treadway Commission, each individual credit union must have its own understanding of risk, or more specifically, its appetite for organizational risk. Ensure that your board, in constructive partnership with your CEO and senior management, has defined an explicit risk tolerance statement that indicates the level of risk your credit union is willing to take. Who’s Responsible for Risk Management? Remember that risk management is not the responsibility of just one entity within your credit union; it should not solely fall upon the shoulders of your internal auditor or your supervisory or audit committee. It is a function of your board, CEO, internal auditor, senior management, and the supervisory or audit committee working in constructive partnership. The board approves the credit union’s risk profile and oversees its ERM program. However, the risk profile itself is developed by the credit union’s board, CEO and senior management during the strategic planning process. Address risks in your strategic planning process by scanning your credit union’s internal and external risks. Does your credit union have a charter for its board-level risk management committee and a job description for its members? Like all best practices, this one is essential. Clearly defining roles and responsibilities around risk management ensures appropriate coverage and a system of checks and balances that won’t leave the credit union unnecessarily exposed. Additionally, a job description will ensure you have the right talent with a collective finger on the pulse of what is happening in our world that will impact the credit union and present opportunities for growth and failure alike. Uncertainty about whether your credit union has the right people in the right seats may indicate a need for a director’s skills assessment that can recommend further education and training. Look to Committees and Director Development Allen DeLeon, CPA, founding partner of DeLeon & Stang , and adjunct consultant with Quantum Governance, advises boards to ask whether their management-level asset/liability committees and board-level finance committees are meeting regularly and having robust conversations about liquidity and asset/liability management. “Make sure that both members of the board (through your finance committee) and senior management (through ALCO or ALM committees) are knowledgeable and experienced and that you are monitoring your rates during this time while the banking sector is under some level of instability,” he says. Lastly, once you have the best and brightest serving your credit union, ensure that you have continuing education requirements and resources at the ready to help your ERM committee stay on top of the shifting sands of cybersecurity, cryptocurrency, regulatory changes and interest rate hikes. To help you in your risk management efforts, you can purchase Quantum Governance’s ERM Policy , which is part of our library of policies, charters, procedures and job descriptions. Previous Next

< Back Get Your House in Order—Now, If Need Be Michael Daigneault and Jennie Boden Aug 30, 2018 There is no ‘wrong’ time to deal with fundamental governance issues. We read with interest a recent article about governance that discussed the importance of boards not addressing their governance issues “in the wrong places at the wrong times.” The authors suggested that many times boards discuss governance issues during precious time in sessions dedicated for other important work—such as strategic planning. They posit that this is distracting and a poor use of time for those taking part and to the goals of the session. They have a point. On one hand, the limited time a board spends together should be treasured– and treated as a resource to be judiciously and appropriately allocated. Strategic planning discussions with management need to happen and are a vital aspect of a board’s role. But on the other hand, if your credit union’s governance challenges are so real that they are clouding your ability to strategize or otherwise effectively lead, there may not be a “wrong” time to deal with them. If governance discussions arise in the context of other discussions, unresolved issues may exist that need to be effectively dealt with ASAP so that governance differences or issues don’t unduly interfere with how you successfully execute your governance roles and responsibilities—strategic planning included! A Need for Conversations on Governance Our recent study, The State of Credit Union Governance, 2018, Five Data-Driven Recommendations for Future Success , found evidence that a good number of credit unions are struggling with governance issues. Of our six key findings , two help tell the story of when to discuss governance: 1. Board members and CEOs frequently differ on their perceptions of governance, with board members and CEOs differing on 84 percent of the survey’s key questions, agreeing on only 16 percent of them (with the exception of the supervisory committee survey section, where more agreement was found). 2. CEOs and senior staff perceive lower levels of trust, with just 27 percent of senior staff and 25 percent of CEOs reporting that their boards were very effective at building a leadership culture of trust, compared to 53 percent of supervisory committee members and 44 percent of board members. We see evidence of these challenges and more in our work with credit unions. Time and time again, we’ll incorporate a strategic and governance assessment and a planning session into one engagement. After all, what could be more strategic than getting your governance house in order? At a recent strategic planning session, a client spent some time in a facilitated executive session, building trust between the board and the CEO. From our point of view, this discussion was probably one of the most important, strategic steps this credit union could take. More and more credit unions are opting to include a strategic goal on governance in their strategic plans. This is not to suggest that you should completely eclipse your normal agendas for all things governance. The article’s authors made some relevant points, and we agree wholeheartedly with most of their recommendations: Dedicated time for governance training is a must. Focus on board member education and governance issues—and to this we would add strategic matters—at every board meeting. Give permission to each other (not just to the CEO or senior staff) to check each other (appropriately) when boundaries are crossed. And as already mentioned, we could support the idea that governance issues not take over every meeting unless the governance issue is so fundamental (i.e., a loss of trust between the board and the CEO; a lack of engagement among board members; critical disagreement on roles and responsibilities, etc.) that it would derail all other discussions or progress. If this is the case, you must have the courage to change course. Agendas are important. Timelines, yes, are meant to be kept. But, remember the saying, “culture will eat strategy for breakfast,” and it’s true. Get your governance house in order. Now’s the right time to do so! Previous Next

Resources Governance Learn More Strategy Learn More Research & Reports Learn More The Four Elements of Good Governance Learn More Board Succession, Composition & Renewal Learn More Supervisory/Audit Committees Learn More Leadership Learn More Committees Learn More

< Back Resolutions for a New Year Michael Daigneault Jan 24, 2017 Taking the Opportunity to Make Changes It’s that time of the year again. The holidays are behind us, and the decorations are back in the attic. If you have kids, they are (thankfully) back in school. Most people began the new year with great hopes for what they will accomplish in 2017. How about you? Have you set (and already broken!) your own New Year’s resolutions? Are you eating better? Spending less and saving more? Working out more often? Achieving a better balance in your life? Here’s a New Year’s resolution that we would like to challenge you and your credit union’s leadership to make and keep: Spend 2017 focusing on improving your credit union’s governance and leadership. This resolution has the potential for such amazing impact that you’ll want to extend it permanently. Many credit union leadership teams spend the lion’s share of their time focusing on financial, fiduciary, and high-level operational concerns: asset growth, ROI, capital ratios, membership, services and, at least once a year, strategic planning. But how often do these leaders pay attention—meaningful attention—to governance? And what is governance, anyway? We define governance as “steering, directing, influencing or persuading from a position of authority. It deals with the legitimate distribution of authority throughout a system—whether that system is a country, a corporation or a credit union.” That means that for your credit union, you are governing not only when you are using your formal authority (passing policies or voting on procedures), but also when you are using your informal powers of persuasion (encouraging fellow directors to support a new venture or working in constructive partnership with the CEO to fine-tune your strategic priorities). Because governance involves the “distribution of authority throughout a system,” we encourage you to look beyond the board when you think of who is involved in governing the credit union. Working in constructive partnership to support the holistic governance of the credit union should be the board, supervisory or audit committee, board committees, and the CEO and management team. In your efforts to improve governance, consider at least these basic components: Governance assessment. If you haven’t completed an assessment of your credit union’s governance for two or more years, you should. It’s important to check in on your “governance health,” just as you would on your own physical health. An assessment can help you and your board colleagues: (1) develop common ground with each other; (2) push the board and management team to ask better questions and think more strategically; (3) develop a clear road map of how to move forward together; (4) form even more productive relationships among your board, CEO and management team; and (5) ultimately improve your governance and leadership efforts to better serve members. CUES offers a self-assessment tool to help boards evaluate their governance health. Board member and board officer job descriptions. It’s important to have clear, up-to-date job descriptions for both directors and board officers. Ensure that you review these on a regular basis (at least every two years) for relevancy. The danger of having out-of-date job descriptions (or worse yet, no job descriptions at all) is that board leaders will be falling short of their critical governance responsibilities . Committee charters. We find that many credit unions do not have charters in place for their committees, and most fail to review their committee structures on a regular basis. Be sure that you are doing both! Board committees , when they are well chartered, staffed and effectively operating, can be one of the most efficient ways to carry out the work of the board. At their worst, they can be a drain on your management team and leave directors feeling underappreciated and overwhelmed. Board meetings. Review your board meeting agendas, structure and functioning to ensure that you are addressing strategic and governance issues at every meeting. Be sure you are developing agendas that are engaging and generating lively discussions for directors, the CEO and management team. Board meetings are critical. They can make or break the health of your board, so give their structure and functioning the attention they deserve. If this work seems daunting, don’t be overwhelmed. Take it one step at a time. Perhaps start with a simple online assessment to establish a baseline. Regular evaluation of governance is both vital and doable for credit unions of all sizes. We have seen boards that are in trouble—real trouble—realize the benefits of focusing on governance in as little as six months. When board and management leadership roles are clarified, micro-management decreases, the quality of board meetings improves, committees add more genuine value, an approach to renewing the board’s composition is agreed upon, and the boundary of operational vs. strategic thought is better defined. For 2017 and beyond, resolve that you will make a commitment with your colleagues to improve your credit union’s governance and leadership—for the health of your board and management team and the good of your members! Previous Next