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

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< 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 Millennials Are Many Things, Including Your Future Board Leaders Michael Daigneault and Gisele Manole Jun 26, 2018 Getting to know them can aid your recruiting. If you had a crystal ball that allowed you to peer into the future, my guess is that a number of you might use it to—among other things—help ensure your credit union’s success. Critical to any such success, however, is the answer to the question: Who sits on your Board? Perhaps one of the most alarming things we at Quantum Governance discovered in our research for The State of Credit Union Governance 2018 was that a full 46 percent of respondents describe their credit union’s effectiveness at finding, recruiting and nominating new board talent as only adequate or less than adequate. The ongoing challenge to attract the best talent to serve on your board is as old as it is evergreen. So, while a crystal ball may be helpful in identifying who holds the keys to your credit union’s future, it likely falls short of providing you with a practical means to actually recruit future board members into service—particularly the younger generations of potential board members. As anyone who has endeavored to recruit talent to their board can attest, you have to know a thing or two about who you’re looking for. So who are your credit union’s future board leaders and how might you connect with them? As the large Baby Boomer generation (1946-1964) retires from board service, Generation X (1965-1980) does not have the numbers to fill their seats. As such, the Millennial generation (1981-1996) will have to be invited to serve in leadership positions as soon as possible. Don’t underestimate them...many are ready to serve effectively right now! Millennials are, of course, a unique generation and it’s more important than ever to understand the types of things that set them apart from previous generations. They are most effectively recruited by...other millennials. You should use any millennial board, associate board, board committee and staff members you may already have to actively recruit effective new young leaders. You can also reach out to connected members of the credit union and to key players in business, government and nonprofit organizations in communities where your credit union operates. Even if you don’t know them yet, find a way to reach out, make new friends, and actively introduce your credit union to them. They are the most ethnically diverse generation in U.S. history. We often hear that boards are striving to look more like their membership. The millennial generation embodies the diversity needed to ensure that members are properly and culturally represented. They are early adopters and technologically savvier than previous generations. As your membership migrates online, so do many of your products and services. Engaging your members through contemporary, user-friendly, and secure mobile and digital interfaces will help grow your credit union and attract younger members. They are optimistic about the future and educated. Positivity fuels productivity. Millennials see possibilities and have an eye trained on the future—which is exactly where you need to set your sights in order to succeed in fulfilling your credit union’s vision and mission. Millennials are often keenly interested in professional development opportunities. You can suggest that board service is certainly a great one! They are interested in helping people and supporting causes. To date, many millennials have been relatively unattached to religion or organized politics (although that may be changing). This leaves a critical mass of them open to the social purpose and mission-centered credo of credit unions. Sure, focus on excellent products and services, but don’t underestimate the power of “cause” and the good work a credit union can do. Ultimately, inviting new ideas and fresh thinking to your board meetings will have consequences. Appreciate the renewed energy and passion it brings. Appreciate also millennials’ talents. Be patient as you work through the challenges and questions that will also arise. As you bring on new board members, it’s important to remember that a robust orientation to your credit union and board service is essential to a successful transition. We are confident you will find that millennials are a vital human and leadership “investment” for your credit union that will pay off extremely well now—and far into the future. Previous Next

< Back Building Your Associate Board Member Program, From The Philosophy Up Jennie Boden and Gisele Manole May 1, 2021 The groundwork for success includes commitment from the start. The debate over the best governance practices for board succession rages on. It is a routine topic in every single engagement and interview we conduct. The issues of diversity and term limits are especially prominent lately, and the daunting task of building the board of the future feels, as with many other responsibilities, like a full-time job for the credit union’s volunteers, all of whom have limitations on their time. The State of Credit Union Governance 2020 found that almost half of board members surveyed (45%) thought that their board was only adequate or less than adequate at attracting people who have the right skills. So, what does it take to marry talent with your board and governance culture? Mina Worthington, CEO of $796 million Solarity Credit Union in Yakima, Washington, describes how her credit union answered the question. “Ultimately our success was in finding the right way to meaningfully involve associate board members in the work of our board,” she says. “They are board members in every way possible except for the vote.” What does an associate board member program look like? And are some key ways that associate board members can be brought successfully into your fold? At Solarity CU, associate board members are partnered with a “board buddy” to help orient them to the credit union and the culture of the board itself. Proper board orientation is oftentimes overlooked or treated as a “self-help” effort, lacking a strategy for continuing orientation past reading the governance manual, bylaws and policies and meeting with the CEO and senior management. An associate board member at Solarity CU explains: “Right after I joined, my board buddy reached out and called me. We sit next to each other in the board meetings. She’ll whisper historical things to me and follow up with me after the meetings to be sure that I understood everything. I’ve only been on the board for about two months, but I already feel respected, and I definitely feel like my voice is heard.” Another hallmark of Solarity CU’s success with its associate board member program has been the institution of regular monthly meetings between the CEO and associate board members before the board meetings to review the meeting materials and answer any questions. Worthington says, “Investing the time in building those relationships with associate board members was just as important as making sure that they knew what was going in the meeting materials each month—the message being, ‘We want to learn about you as much as you want to learn about us.’” Another hallmark of a successful associate board member program is access to training and conferences that give associate members a broader look at the issues, innovations and ever-evolving best practices in credit union governance. Think of this as an investment by both parties in the future of the credit union. A multitude of resources are available—from online trainings and workshops to conferences and certification programs. Some are even free! So, the underlying philosophy of a successful associate board member program must be, “We’re 100% committed to you,” instead of thinking of associate members as engaging in a protracted interview process that can sometimes go on for years. From our experience in working with thousands of credit unions, an associate board member program that engages, orientates, educates and invests in its volunteers in meaningful ways is the best way to ensure the future of your credit union. In the coming year, if you haven’t explored an associate board member program to support a healthy balance of board renewal at your credit union, maybe 2021 is the year to do so. Just be sure, as with everyone in your boardroom, that you are open and committed to helping those volunteers develop into exceptional stewards of your vision and mission, too. You can purchase Quantum Governance’s Associate Board Member Job Description, as well as other policies from their Policy Library here . Previous Next

< Back Nine Leadership Challenges Michael Daigneault Mar 25, 2015 The board of the future will need the strength to overcome these. At Quantum Governance, we’ve been taking a look at what the credit union board of the future will look like and, almost more importantly, the challenges it will face. Ultimately, we have identified nine key challenges that are already (or will be) confronting your leadership. The Composition Challenge. Gone are the days when your credit union can simply rely on a nice cross section of its membership to fill open slots on its board. The most progressive boards today are actively recruiting the talent they need; identifying the skill sets that deliver the talent, connections and expertise they need on the board; and then inviting those individuals to become members of the credit union. The Technology Challenge . The rate of technology is changing at lightening speed. I don’t have to tell you that. But here’s the thing. It’s changing at a faster rate than anything else we’ve ever seen. Faster than political change, business change and even social change in our world. Is your board ready? Is the credit union? The Community Challenge. The very notion of community is being altered by technology. Community is ceasing to be largely defined by geography and more often it’s defined as a sense of belonging. How does that impact your “community” credit union? Indeed, as a credit union member myself, I haven’t set foot in a local branch for more than a decade. What does that mean for your business? Is your board discussing the impact of this from a strategic point of view? The Disruptors . How many of you have heard of Uber? Five years ago, could you have ever conceived of an online reservation ride service? I’m sure the taxi companies in nearly 130 American cities never dreamed their business could tumble by more than 65 percent in just one year, like it did in San Francisco. Uber wasn’t even on the radar then. What’s not on your radar now? It’s difficult to know. And that’s the point. You won’t know. More than 99 percent of the disruptors will fail, but it will only take one to succeed and have a dramatic impact on your credit union’s business. The Demographics Challenge. We love Baby Boomers. First, there are lots of them. Eighty million of them, and they are doers. Board service has been a part of their DNA. But what about the next generation: Generation X? Much has been said about them and most of it hasn’t been good. I happen to think they are doers, too. And very civic-minded, but in a different way. Their way of giving back is more individualistic. When they want to get involved, it’s more on a one-on-one basis. When they want to make a difference, they start their own organizations … forge their own path. And critically, there are 40 million fewer people in Generation X than there are Baby Boomers. If you think you’re having a tough time finding good, qualified and engaged board members now, it’s about to get harder. The Information Challenge. With your iPad and your smartphone, you probably have more information at your fingertips than the entire federal government did 25 years ago. But what matters? What’s important? What information will move your credit union forward? What do you need to know and what is just white noise? One of the key challenges for credit unions is not a lack of information, but rather the volume and variety of data available. The current flood of information can be like trying to satisfy your thirst with a hose attached to a fire hydrant! The Complexity Challenge. This challenge is related to The Information Challenge and every credit union will face it. It’s a distinct moment in time – that moment when the abilities of a credit union board are overcome by the increasing quantity and complexity of credit union regulations, responsibilities and requirements. There is more and more expected of you and your colleagues as directors. The demand for your knowledge base is only continuing to grow. The Risk Challenge. There’s a great book titled Competing for the Future , in which the authors say organizations that “create the future are rebels. They’re subversives. They break the rules…Foresight often comes not from being a better forecaster, but from being less hide-bound.” It comes from breaking free from your mold, from taking more risks. Is your credit union board “hide-bound?” Are you stuck? My guess is that you and your board colleagues spend more time on the lower end of the risk spectrum – most credit union boards do. But, if you’re going to grow … if you’re going to forge the future, maybe even be a credit union disruptor yourself, you’ll need to learn how to effectively balance two abilities: 1) understanding, identifying and mitigating risks to the credit union; and 2) tolerating the risk that will enable you to grow. The Impact Challenge. It’s not enough to keep your head down and do good work. You have to not only keep your head up, but you have to get out. The Impact Challenge requires that you foster relationships, as leaders and always in constructive partnership with your CEO, with external stakeholders to have the greatest impact. And that goes far beyond your membership to include governmental representatives, local businesses and, yes, even other credit unions. To face these nine challenges successfully, your board will need to regularly strengthen its leadership and governance abilities. You can do it! Previous Next

< Back Governance Committee – If You Don’t Have One, Get One! Caitlin Hatch Apr 30, 2020 Governance Committees can help ensure boards are running smoothly. Every now and then we are asked why governance committees are such a good idea, and it’s a good reminder to us not to take for granted that everyone knows or even shares our opinion. But, we think that they could be the most important committee your organization can have, so, in the immortal words of Toy Story’s Woody Pride, “If you don’t have one, get one!” and if you do, make sure it’s the best it can be. We say that because the role of the Governance Committee is multi-faceted and goes right to the heart of the effectiveness of your Board of Directors. And not just how they operate, but how they work together with the CEO or Executive Director, as the case may be, as well as the Staff. Governance Committees are authorized by the Board to be responsible for ensuring that the organization’s bylaws, key policies and practices are in optimal form – and that they stay that way. The reason for this is so that the Board can then do its work as efficiently and effectively as possible. We have spoken to many Boards whose members do not have a clear, shared agreement about just what the role of the Board members is, and how they should be carrying out that role. The reason is generally a simple one; it’s not that they don’t care, it’s that everyone comes to a Board and either assumes they know what a Board member does, or they bring their past experience with them and carry on as before. So – with everyone acting in a good faith – but often different — understanding of the Board members’ role, it’s easy to foresee how inefficiencies — and sometimes even hard feelings – can develop. And it generally all stems from everyone trying to “do the right thing.” It’s fairly well known that one of the chief responsibilities of a Board is to hire and manage the person who is delegated the authority to run the organization on a daily basis. But it is seldom recognized that the Board also has the responsibility to manage itself. Governance Committees to the rescue! They help to clarify – and codify — the role of the Board member, what Board Officers should and could be doing, whether the Board has the right committees and what those committees should be doing, and how well everyone is living up to their roles and responsibilities. Sometimes, Governance Committees are also tasked with overseeing nomination duties — held responsible for the strong succession and development of the Board by focusing on Board member recruitment, nominations, orientation, training and evaluations – of individual Board member performance and of the performance of the Board as a whole. Organizations that have active Governance Committees ultimately have more engaged Boards, with their directors sharing a clear understanding of the expectations for the Board, its members, their committee work and, ultimately, and most importantly, the results they are achieving. The clarity of purpose and responsibility saves the Board from distractions based on differing perceptions. A Governance Committee can help your Board maintain high standards for performance and accountability for results, which, at end of the day, is the whole reason for being on the Board in the first place. Making sure your organization’s core governance functions are high performing is important under normal circumstances, but in challenging times like these, it is even more so, and Governance Committees can minimize the risk an organization faces if, or when, the unforeseen occurs. Sadly, today, that is more important than ever. Caitlin Hatch previously served as a senior consultant with Quantum Governance and has worked with credit unions for the past eight years, focusing on governance and strategic planning. Prior to that, she served for 25 years as general counsel and corporate secretary for the largest anthracite coal company in the United States. Previous Next

Supervisory & Audit Committee Resources A Cautionary Tale of Risk Management in This Time of Bank Failures Defining roles and responsibilities and continuing education help ensure appropriate coverage. Read More The Importance Of A Truly Independent Supervisory Committee If you’re shifting to an ‘audit’ committee instead, be careful not to sacrifice independent oversight at the altar of efficiency. Read More A Case for Reaching Higher Musings on the Federal Reserve’s proposed guidance on supervisory expectation for boards Read More ERM Is Everyone's Responsibility 10 steps to take to ensure your leadership is doing all it can to identify and manage risk Read More Supervisory Committees Function Well, But... Just like CUs and their boards, supervisory committees must change with the times. Read More

< Back Assess for Success Michael Daigneault Jul 27, 2015 8 surefire times you need to evaluate your board’s performance In a recent study conducted by Quantum Governance , only 22 percent of credit unions rated themselves as “effective” or “very effective” at conducting a regular process of self-evaluation. Comparatively, 34 percent felt they were ineffective or even “very ineffective ” in doing so. With the long tenure of credit union board members and the continually evolving business climate that faces today’s credit union, remaining relevant, current and ahead of the curve is more important than ever. In fact, it is incumbent upon every credit union director to do so. A board assessment is a critical component in an ongoing process of board renewal, strengthening and improvement. Done well, it can provide an objective and comprehensive perspective that ultimately will help your board and senior management team focus your efforts, activities and precious resources. Together, you will identify your credit union’s strengths and challenges and, in doing so, find ways to move forward collectively to the betterment of your members. You can frame your issues in a new way, generating bright ideas and insights that will lead your credit union effectively into the future. Plus, you will build a baseline against which you can measure future progress. You should definitely consider a board evaluation in the near term if you: have a new credit union board chair or CEO want to elevate your credit union’s leadership or strategy to the “next level” have been experiencing very high or very low board member turnover need to address issues or concerns with your current governance structure, policies and/or practices are getting ready to launch a new strategic planning initiative (or revise your current strategic plan) are considering a merger or acquisition have experienced significant change, growth or “crisis” within your credit union or board have not undertaken an evaluation in the last three years Previous Next

< Back Does A Divided Vote Make You A Divided Board? Jennie Boden Apr 25, 2023 A divided vote makes you a human board. And it’s what you do afterward that matters most. While most of our clients are credit unions, Quantum Governance also works with a wide variety of other non-profit organizations—foundations, associations and charitable groups, even a small children’s home in India with an annual budget of just $50,000—helping their boards and chief executives level up their governance and strategy. We learn from every organization, adding to the knowledge bank from which we draw for all of our clients. For example, in recent times, a former credit union board chair called to ask if we could help his local school board find its way back to solid ground. This school board, like many others, had experienced wars over masking, vaccines and more that arose during the COVID-19 pandemic. And these experiences had taken their toll. When the school board chair said, “You’re our last hope,” we knew we had to help. And so it was, when in the middle of an offsite with that school board client that a fundamental, universal governance question was asked: “If we have a divided vote, does that mean that we’re a divided board?” It was one of the best, most nuanced governance questions that I’d ever been asked. I share it with you now, my credit union colleagues who serve on the board, because I believe you do everything you can to elude divided votes. I think you loathe divided votes. I think you fear divided votes. I’ve even been told that you refrain from putting what you even think might become a divided vote on your meeting agendas. But have no fear. I’ll share with you the same answer that I gave my school board client in the hope that it will benefit you: “Divided votes do not mean that you’re a divided board. They mean that you’re a human board. They mean that you’re a board made of living, breathing people with different perspectives and different thoughts.” I continued, “Divided votes mean that you feel comfortable enough as a board to have robust conversations and share compelling and, yes, contrary points of view and to support them with your votes.” “It’s what happens after the vote that determines whether you are a divided board,” I said. “Do you speak with one voice?” I asked. “Or do you leave the boardroom still advocating strongly for your position to anyone and everyone who will listen? Or are you respectful of the will of the whole as your board service demands you to be?” While I don’t wish upon any board the contention and divisiveness that our school board client has faced in recent years, I do hope every board will have the courage to wade deeply into robust conversations, the strength to tolerate divided votes, and the respect, in the end, to support the will of the whole. 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 Start Onboarding Pre-Election Michael Daigneault Nov 24, 2015 Eight steps supporting new board members' success Many credit union boards think the new director onboarding process starts when new board members have been elected to serve. But really, the key to building an effective onboarding program is not to wait for the election to take place. Just like board meetings run best when advance work is done to set them up for success, onboarding of new directors is greatly facilitated by steps boards can take before your members elect new directors. Consider taking the following key steps before the board election: Develop a matrix of your “ideal board” for achieving strategic goals. Create a skills matrix outlining the attributes and skills your board members currently have. Then, create a separate matrix showing those skills directors will need to carry your credit union successfully into the future. Be sure to do this with your strategic plan in mind. Identify board composition gaps. Compare your board’s current skills matrix with the skills matrix of your future, ideal board. What weaknesses do you see in your current board? Conduct a gap analysis. What attributes or skills are limited – or missing? Identify potential board candidates. Given the gaps you identify in step 2, what types of directors should you actively seek? You can even consider looking beyond existing credit union members and recruit board members from the community. Remember, they can always join the credit union, and they might add real value to your efforts. Involve, engage and educate potential directors. Show them the love! Ways to bring potential directors into the fold might include having them be a part of an associate board member program, or inviting them to a local community event. At the very least, you will want to be sure they visit a local branch and meet with the CEO and some of your credit union’s best and brightest staff. Do a background check and talk to references for potential board members. Remember, your potential, new volunteer will be responsible – legally and financially – for the credit union. Do your due diligence. Gauge the prospective director’s level of Interest. Here’s where you can begin to introduce your potential candidate to your other directors. Begin to take his or her pulse more formally to gauge his or her interest in candidacy. Confirm the potential director’s interest in and willingness to serve. Have a candid conversation about what time and knowledge is involved. Talk about the risks, too. Formally invite the potential director to stand for election. Here’s where your hard work pays off. Make the ask. If your candidate agrees to run—and is ultimately elected—you’ll need a process in place for orienting him or her to the work of your board. Previous Next