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Board Succession, Composition & Renewal Resources In Search Of The Strategic Board Discover how credit union boards can become agile strategic partners and lead their institutions to future success. Read More Gender Equity In The Boardroom: We're Not Done Yet Boards still have work to do to support their female directors and wider DEI&B efforts. Read More Know When It’s Time To Go Holding onto your board position may be best for you, but what’s best for your credit union? Read More How Using a Recruiter Can Boost Board Succession Planning Efforts Approaching director searches like executive searches can produce great results. Read More A Continuously Bigger and Better Box Like a nautilus, Hudson Valley Credit Union’s board evolves beautifully into its next stage of governance. Read More Hudson Valley Credit Union’s Call for Board Candidates Refresh As part of its board recruitment renewal project, Hudson Valley CU developed a call for candidates that outlined specific attributes that matched its changing governance needs and values. Read More Key Outcomes And Lessons Learned From A Board Renewal Effort An analysis of Hudson Valley CU’s work to revise key governance processes. Read More Why Directors Are Chess Pieces, Not Checkers Every director should be ‘chair material’—even if they wouldn’t make a good chair. Read More Building Your Associate Board Member Program, From The Philosophy Up The groundwork for success includes commitment from the start. Read More Who's on Your Board Today? Tomorrow? 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. Read More The Ever-Elusive Millennial Director Tailor your message and medium in recruiting younger board members. Read More

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 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

< Back Advice from My Hero Michael Daigneault Mar 26, 2019 Six key responsibilities of every board, gleaned from my conversation with world-renowned expert Ram Charan. There’s nothing like meeting your hero. For some, that might equate to a football player or a musician or maybe a politician — a well-known celebrity type, whose mere physical presence is immediately recognized by all. For a governance geek like me, heroes are fewer and farther in between. But they do exist and when they do, they rise like giants. Thanks to my good friends at CUES, I met my hero a few months ago on the eve of the 2019 CUES Symposium in Nassau, Bahamas. And because they are, indeed, good friends, I was lucky enough to be afforded some private time with Ram Charan, the world’s leading expert in corporate governance. Along with some members of my team, I explored some of the most pressing concerns of the day with him — challenges that perplex even the most skilled and tenured credit union board members and CEOs. I've got the picture to prove it! I imagine I’ll be mining the notes from our conversation for quite a time to come, and I look forward to bringing you the fruits of those labors in future blogs. For now, I am pleased to share with you six key responsibilities central for every board outlined by Ram as he spoke to the board chairs and CEOs assembled at the Symposium: Ensure effective board composition. This is one of your board’s most fundamental roles and responsibilities. Board renewal at its core is also one of the most difficult. The State of Credit Union Governance, 2018, published by Quantum Governance and CUES found that a full 46% of respondents described their effectiveness in finding, recruiting and nominating new talent to their board as only adequate or less than adequate. Do you have the right directors and the right officers for your board? Don’t just hire your CEO, coach him or her for success, too. If you are lucky enough to have the right CEO, take care not to lose him or her. Ensure that you have a strong relationship with your CEO, as well as a succession plan in place on day one. Develop the right strategy to lead you into the future. Here it’s important to work in a full, constructive partnership with your credit union’s CEO and management team. Focus on the vision, mission, culture, strategic goals, objectives and metrics, and then let your CEO and his/her management team worry about operational work plans that support effective implementation. Keep an eye toward the horizon. Are you clear that you see things today will build the future tomorrow? Look for opportunities; many will fail but many will grow. The board adds value in asking questions of opportunity and in sowing the seeds. Stay current on important trends. Allocate enough time at the board level to learn about industry trends so that you can contribute to the strategy effectively. Study FinTech, digital corporations, consumer trends and more — anything that will give your credit union an edge over its competitors. Monitor the credit union’s performance. Rely on your CEO and his/her management team to deliver the data you need to monitor performance. Ensure that you are asking questions that “trust but verify” the credit union’s position and progress. Be sure to rely also on empirical data, and finally, ask yourselves these questions. In the last quarter: What three things: 1) Have we done very well; 2) Have we not done well; and 3) Will we do differently? Previous Next

< Back Coming Together for the Common Good Michael Daigneault Dec 1, 2019 Consider multiple perspectives and build consensus— not unanimity—to ensure your CU is making good decisions. If you Google “decision-making,” we think you’ll be amazed at what comes up in the search results: “The Top 5 Decision-Making Models You Need to Know,” “Models of Decision-Making: Rational, Administrative and Retrospective Decision-Making Models,” the “Most Popular Decision-Making Models,” and even “Decision-Making Models of Decision-Making.” And the list goes on. Wouldn’t it be wonderful if there was a simple, no-fuss, one-size-fits-all model that we as leaders of our credit unions could apply—be it in the boardroom or in the halls of our CUs’ administrative offices—that could assure us that we were making the right decisions? Wouldn’t it be nice to know we’re making the best decisions that always put our members’ interests first while delivering the most effective outcomes for our credit unions? Unfortunately, it’s not that easy. A former colleague from what was then the Ethics Resource Center, a Washington, D.C., think tank and consultancy, used to say that decisions are the hardest when there are two competing values at play. And we think he’s right. It’s easy to make good decisions when the options are black and white, good and bad, positive and negative. Should you merge with the larger, more solvent credit union when yours is hours away from shutting its doors? Is the core conversion a go when you have the funds to switch and your current system is on its last legs? Should you promote the current VP/finance to CFO when she’s fully capable, has the requisite skills, the backing of the board, a great relationship with you (the CEO) and the trust of senior management? It’s easy to see how you can quickly get to “yes” on these questions and many others. But when you and your colleagues are in the boardroom—or managing your credit union from the C-suite—how do you make decisions when the questions are not as clear? What do you do when there are two important, competing values at play?How does a credit union decide between “serving member interests” and “ensuring the financial safety and soundness of the credit union?” How do you balance the credit union’s ongoing health and meaningful outreach in the community?Perhaps the most important job of board members and senior management alike is to ask questions that lead to not only expeditious decision-making but the right decisions. Perhaps the most important job of board members and senior management alike is to ask questions that lead to not only expeditious decision-making but the right decisions. Commit to Having the Hard Conversation First and foremost, begin by committing to having the hard conversations that you need to have in both the boardroom and the C-suite. While researching for the soon-to-be-released 2020 State of Credit Union Governance report, we found that more than a third of respondents said their boards do only an adequate or less-than-adequate job of asking the hard questions that need to be asked. And yet, the same study found that boards report overwhelmingly that they are “making quality decisions.” How can this be? Fundamental to effective decision-making is ensuring that, as credit union leaders, you are upping your game in terms of asking hard questions. What do we mean by “hard questions?” Perhaps the most important job of board members and senior management alike is to ask questions that lead to not only expeditious decision-making but the right decisions for the credit union and ultimately for members. If you fail to do so, you’re not living up to your role and responsibility—either as a volunteer or as a paid leader of your credit union. Being open and inviting multiple perspectives into difficult conversations is critical to decision-making. It’s vital to ensure that every voice in the room is heard. Remember, that your credit union is a nonprofit governed by a board of directors, not a privately owned company led by a chairman/CEO. By design, the strength of a cooperative leadership structure comes from the chorus of voices that governs it—even though at times it may be cumbersome. (Remember cooperative principle No. 2, democratic member control? Read about it .) Be Conscious of Unconscious Thought Daniel Kahneman is an Israeli-American psychologist and economist who won a Nobel prize for his work on judgment and decision-making, much of it outlined in his book Thinking, Fast and Slow. In the book, Kahneman suggests that for the most part, individuals spend about 90% of their time “thinking fast,” or motivated by subconscious or unconscious thought, and only 10% of their time “thinking slow,” or motivated by rational or conscious thought. What does this have to do with the decisions coming before your credit union’s board and senior management? Well, everything. It means that everyone in the boardroom or in the C-suite is coming to the table with their own biases, and they are largely subconscious. And these decision-makers are, believe it or not, largely driven by those biases. Remember that discussion that you had about moving away from brick and mortar? Or the presentation that your CEO and her team made to the board on that potential merger? What about the discussions you’ve been having in executive session about the CEO’s variable pay? All of these discussions and more are being seen through different lenses by various board members and senior leaders. A board member who believes in high-touch customer service and relishes the personal connection with the tellers in his local branch will forever believe that brick and mortar is the way to go. Legacy board members may be deeply concerned about what a merger might mean for their own board positions. And finally, the executive director at the homeless shelter who serves on your board will likely find the CEO’s pay enviable and maybe even too generous, regardless of performance. Remember, these perspectives—even if they are unconscious—are always at play, and they have an impact on each and every meeting and in each and every conversation, whether we want to believe it or not. Be Clear About What Consensus Means … and What It Doesn’t Another critical component to effective decision-making is to understand the concept of consensus as it is designed to operate in the credit union boardroom. The reality is that a significant number of credit union leaders still believe that consensus exists only when everyone is in complete agreement—what some would term “absolute consensus” or simply “unanimity.” Sure, it feels great when we can all agree with a motion or proposal. And yes, sometimes a thoughtful compromise is the best course. But absolute consensus or unanimity—while desirable or comforting at times—is not necessary to make good decisions in the boardroom. Indeed, there are even times when insistence on unanimity may cause a proposal or initiative to become a mere shell of what it once was. If meaningful changes are made just to satisfy one or two hold-out votes, an initiative may become so modified or watered-down that it may no longer add the significant value that the original proposal offered. What, then, is an appropriate degree of consensus in the boardroom? Merriam-Webster defines it as “a general agreement about something.” Note the word “general.” It involves coming to an agreement to support a decision that is in the best interest of the whole. The process of coming to consensus is designed to afford everyone an opportunity to share their thoughts and opinions about the subject at hand. Yep, there it is again—genuinely hearing everyone’s voice. Consensus in the boardroom, therefore, does not require unanimity. What it does require is you and your colleagues asking the hard questions, challenging your values, raising your subconscious thinking to the conscious level and coming to a decision that is in the best interest of the whole. Not everyone may agree when you come to a consensus, but if you have a quorum, a majority of those voting on the matter are generally considered a consensus on regular matters coming before the board. (Note that the Federal Credit Union Bylaws , published by the National Credit Union Administration include only a simple majority—50% plus one voting member for a motion to pass.) And remember, once the final vote is taken on a matter, the decision has been made. The entire board is now expected to speak with one voice … even if you were one of the members voting against the motion. Be Transparent About Your Decision-Making We end where we began, by sharing a lesson from our days at the Ethics Resource Center. We had the good fortune to work with a select group of researchers—ethics officers at Fortune 500 companies, consultants and practitioners from around the nation—in a program we developed called the ERC Fellows Program. Together, we took on leading questions and issues in the field of business ethics. One such question was, “What makes for an ethical leader?” Surprisingly enough, our research led us back to decision-making. We found that regardless of how ethical the leader was as an individual, in order to be seen as an ethical leader, the individual’s decision-making process needed to be seen as one that had integrity. Our research with the Ethics Resource Center offered four key recommendations on the notion of ethical decision-making and ethical leadership: When announcing critical decisions, be certain to acknowledge the ethical issues (competing values or even subconscious thinking) inherent in the situation being addressed and how the proposed solution (the decision) addresses those ethical issues. When discussing the ethics of key decisions, publicly acknowledge the difficulty of resolving such dilemmas and challenges and your awareness of the fact that ethical people could reasonably disagree on how best to resolve the dilemma. (Remember, you and your colleagues will prioritize different values, and this is where subconscious thinking will emerge!) Insist that your direct reports (or for boards, the CEO and senior management) talk you through the ethics of their decisions for review and/or approval at the same level of detail they discuss other business considerations. (But do so without micromanaging the CEO/senior management!) Ensure that leaders understand their impact on the organization’s culture and how their attention or inattention to the ethical dimension of their choices impacts the organization’s culture. Given the unique role of credit union leaders as stewards of their members’ funds, we believe the role of the credit union leader—be they volunteer or paid—as effective decision-makers is paramount. Have the courage to ask the hard questions. Engage all of the voices in your boardrooms, volunteers and senior management alike. Be conscious of both rational and subconscious thought. Know what consensus really means and what it doesn’t. And be clear about the decisions you make—all for the betterment of your members. 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< Back Board Liaisons Direct Directors and Staff Toward Good Governance Caitlin Hatch Apr 26, 2019 Generally keeping things organized and on track is no small feat—and it’s an important one. Credit union leaders have become increasingly aware of the importance of good governance and have made an effort to ensure that their credit unions are adopting cutting-edge governance and leadership practices. From assessing the effectiveness of their boards and governance systems to updating their governance frameworks, policies and procedures to improving their board structures, committees and charters, good governance is taking center stage. These efforts—along with the steady workload of supporting a credit union board—require strong leadership from the board chair, CEO and a governance committee, but also from an often-overlooked and under-appreciated staff person—the board liaison. At a minimum, today’s board liaisons help to organize and disseminate meeting materials, plan and support the execution of board meetings and retreats, take minutes, and generally help keep things organized and on track so that the board can do its work. But more and more, the board liaison’s role is being expanded and now is considered by many a management position that has been tasked to actively support—and improve—the board’s work. In its expanded role, board liaisons also ask a fundamental question regarding good governance: How can the credit union’s board and governance become even more effective? Those board liaisons with sufficient experience are being tasked to help design and manage the information architecture for the board, ensure the value of board meetings and retreats; coordinate regular governance and strategic assessments, as well as support and guide the board in fulfilling its governance, strategic and leadership responsibilities. They are key players in fostering the governance cultures of their credit union board and, thus, the credit unions themselves. Historically, the individual tasked with this role has been the CEO’s executive assistant. Why? Generally, because that’s someone the CEO works closely with and trusts, someone who knows the credit union and has easy access to the key players, someone who has the nuanced administrative and people skills required to regularly communicate with board and committee members at the most senior level. They are, most often, consummate, professional women. I say “women” because, while a man could certainly perform this critical function, we have met very few men who actually do. At CUES’ first event for board liaisons, 19 individuals attended—all women—from across the country and from credit unions of varying sizes and complexities. They all agreed that they regularly perform many of a board secretary’s core duties—helping to safeguard the integrity of the governance framework; ensuring compliance with regulatory requirements; implementing the board’s decisions; and facilitating communication with and among the credit union’s leadership. However, we did learn that there are remarkably different approaches to the role. For example, the title of the person fulfilling the “board liaison” role currently varies a great deal from credit union to credit union (i.e., everything from “chief of staff,” “governance officer” and “board affairs director” to “board & executive relations,” “board administrator” and “board assistant”). And, just as the titles vary, the framing and scope of the position varies, too. While it’s a critical role, there appears to be no commonly accepted definition of the “board liaison” position within the credit union community at all! Working closely with CUES, other colleagues in the credit union community and board liaisons throughout the U.S. and Canada, we hope to help change this, and encourage a much greater appreciation for and deeper understanding of the importance of today’s board liaisons. The fact that the board liaison, at least at this early stage of conception, looks to be one that is largely filled by women, is to be celebrated—especially given the expanding and growing role that board liaisons are experiencing in credit union leadership. While there are now twice as many female CEOs in the credit union community as there were 10 years ago, still, less than one in five CEOs is a woman (for credit unions with assets over $1 billion). This is progress, but there still aren’t enough women’s voices among those in credit union leadership positions. Still, there remains much more to learn about the board liaison position and the vital role women are currently—and should be—playing as they shape the governance of their credit unions. Caitlin Hatch previously served as a senior consultant with Quantum Governance and has worked with credit unions for the past eight years, focusing on governance and strategic planning. Prior to that, she served for 25 years as general counsel and corporate secretary for the largest anthracite coal company in the United States. Previous Next

< Back Hudson Valley Credit Union’s Call for Board Candidates Refresh Jennie Boden and Dr. Alexander Stein Feb 1, 2022 As part of its board recruitment renewal project, Hudson Valley CU developed a call for candidates that outlined specific attributes that matched its changing governance needs and values. Before Nominations are being accepted through Nov. 1 for our 2020 Board of Directors Election. Board members are volunteers elected by the credit union membership and are responsible for the general direction of the credit union, leading us forward and positioning the credit union to respond to members’ future needs. Directors must carry out their duties in the best interest of the membership, conforming to all applicable rules and regulations, as well as sound business practices. Members with strong backgrounds in a variety of fields are needed, including business, finance or investments, human resources, marketing or information technology. A director must have a working familiarity with basic finance and accounting practices, including the ability to read and understand the credit union’s balance sheet and income statement. Board members volunteer an average of 10-15 hours per month to credit union business and are also required to attend a monthly meeting in Poughkeepsie, New York, as well as serve on one or two additional committees. After Nominations are being accepted now through Feb. 25 for the Hudson Valley Credit Union 2021 Board of Directors. Our Board members are volunteers elected by the credit union membership and responsible for working in partnership with our Management Team to lead the credit union to mission success: to create financial security and a better quality of life. Our Board provides governance and leadership; visionary, strategic direction; and fiduciary oversight, and we’re looking for members who are experienced critical and strategic thinkers, with a keen ability to focus on the future. If you are independent-minded but can also work to build consensus among a group of diverse people, we need your skills! And, while you don’t need a degree in finance, you do need to be comfortable reading financial statements and analyzing organizations from a strategic point of view. We are a fast-growing credit union, with a commitment to good governance and acting with integrity. If you think you have the right mix of skills, talents and attributes, can commit to an average of 10-15 hours per month in service of our credit union, plus attend a monthly meeting in Poughkeepsie, New York, and serve on at least one of our board-level committees, visit our website at hvcu.org . Alexander Stein, Ph.D . , is founder of Dolus Advisors , a consultancy that helps leaders address psychologically complex organizational challenges. Previous Next

< Back Is Your Organizational Success An Accident? Gisele Manole & Jennie Boden Nov 22, 2022 New study suggests where to look for the answer. We’ve been studying credit union governance for more than a decade now and amassed mountains of data on credit unions of all asset sizes and from all over North America. Perhaps the most frequently asked question we hear is some variation of, “How do we know when we’re getting it right? Our assets are increasing, and our membership is growing so we must be governing ourselves well. Right?” As we prepare to publish The State of Credit Union Governance, 2023 Report, we looked closely at the data to see if it was clear to us what the key indicators were that a credit union was governing itself well—that as a credit union’s assets and membership grew, the organization’s governance practices were evolving too, both in terms of meeting changing regulations and best practices. What we learned focused our attention on four things: 1) board members meeting their roles and responsibilities; 2) members of the credit union’s governing system (board and supervisory/audit committee members and senior leadership) meeting high accountability measures; 3) strong levels of volunteer engagement; and 4) building and maintaining a leadership culture of trust. We found there is a significant positive correlation among each of these four areas of governance—meaning that if a respondent reports that their credit union is highly effective in one of the governing elements, they generally report that they are highly effective in the other three elements, too. Therefore, the four elements—accountability, board member roles and responsibilities, engagement and trust—are inextricably linked and together provide tremendous insight into the strength of your credit union’s governance. Figure 1: The Four Elements of Good Governance These findings identify the four elements as likely keys to unlocking the secret to good governance and creating a high-functioning board. In addition to pinpointing areas of focus, our findings suggest that actions to improve the effectiveness of one of the four elements may lead to improved effectiveness in the other three elements. So, as we begin to more succinctly answer the question, “How do we know when we’re getting it right?” we can look to these four areas of governance for some indication of whether your credit union’s board and executive leadership are “getting it right” or not, and whether further study is necessary to identify which element of your governance needs your focus to ensure the continued success of your vision and mission. Previous Next

< Back Board Engagement Needs A Boost Michael Daigneault May 27, 2014 Strategies to use in your monthly meetings In a recent set of surveys conducted by my firm, Quantum Governance, L3C , only 42 percent of credit union board members across the United States thought their boards were “effective” or “very effective” in engaging their directors. Sadly, this means more than 50 percent of directors said their boards were only “adequate” or even “less than adequate” at engaging the full board. What is really going on at these credit unions that is not engaging for a critical mass of board members? My team and I actually review hundreds of credit union board agendas and meeting minutes annually. Based on this, I can understand why directors are walking away feeling less than fully engaged. Many agendas are fairly routine, with some opening remarks by the chair, a fairly detailed report by the CEO, followed by financial reports, committee reports and maybe (if you’re lucky) an update on the business or strategic plan. Reports, reports and more reports. The tone tends to be formal. Month to month, many agendas don’t vary much. The focus frequently tends to be on “telling” the board information, providing fiduciary oversight and holding credit union management “accountable.” Sound familiar? In my last Good Governance column , I encouraged you to begin to expand your agendas beyond merely the fiduciary—to engage in strategic dialogue, early and often. But, let’s go further. Let the tone of your board meetings vary to include not only formal informational and oversight elements, but also genuinely engaging, persuasive and influential opportunities at the highest levels. (To be clear, I am not suggesting that the board be invited to provide input at the operational or tactical level.) Author Peter Senge provides a very helpful spectrum of the levels of dialogue in a meeting context: At the lowest level of engagement, he suggests that dialogue focuses on telling – telling the board what has been done or what’s about to be done. At a slightly higher level of engagement he suggests that the focus shifts to selling – or advocating an idea to the board. Higher on the engagement spectrum is the notion of testing – testing out an idea with the board to identify its position. Beyond that, Senge urges that there be opportunities for what he terms consulting – or genuinely asking the board’s opinion, with the idea of improving or modifying an idea. Lastly, and at the very highest level of engagement, he recommends discussions designed to encourage participants to co-create an idea or the key elements of an initiative. Vary your agendas based on future needs and important trends. While there has to be some telling and selling, talk also about some element of your strategy each and every meeting. Make time to engage in authentic dialogue. Focus not only on the necessary elements of oversight – but also make sure questions are asked that invite input from board members at the testing, consulting and—when appropriate—co-creating levels of engagement. This means regularly engaging the board in vision, mission and forward-looking questions that everyone knows will make a real difference as your credit union moves forward. 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

Allen DeLeon Founding Partner, DeLeon & Stang, CPAs and Advisors Allen DeLeon was a Founding Partner of DeLeon & Stang, CPAs and Advisors and has served as an Adjunct Consultant on credit union audits, fraud and risk assessments and compliance engagements. Al has over 35 years of experience including audit, tax, business, and financial services advisory to credit unions, nonprofit organizations and business organizations. The firm, DeLeon & Stang, has developed a particular expertise in the area of credit union auditing, financial services and in working with credit union Supervisory/Audit Committees. Al is also a member of the American Institute of Certified Public Accountants, the Maryland Association of CPAs, the American Society of Association Executives, the Maryland & DC Association of Credit Unions, the Metropolitan Area Credit Union Association and the Association of Credit Union Internal Auditors. Al is an experienced Board member, having served on the Holy Cross Health Foundation as Vice Chair and as Chair of both its Governance and Finance Committees. He has also served as a Board member and Treasurer of the PIC MC Foundation of Montgomery College, Treasurer of the Mid-Atlantic Federal Credit Union and Board Chair of the Maryland Association of CPAs. Learn More Back

< Back Tell Me Something I Don’t Know: What You Need to Know About Assessments Michael Daigneault and Gisele Manole May 22, 2018 Solid financials aren’t necessarily a sign of a high-performance board. We don’t know what we don’t know. It’s such an obvious thing to state, and yet we would suggest this simple statement of fact may be the key to the future of your credit union. Often our clients approach us with a sense that although their credit union has a healthy balance sheet and continues to grow its membership and assets, there is something they could be doing better--that their board and committees could be more effective in the work they do on behalf of the credit union. Without an obvious or discernible problem, they just can’t put their finger on it. Maybe it is time to “take stock” or assess. Remember, the fact that your credit union is doing well doesn’t mean that your board is following suit. In our experience, a number of situations may be opportune for doing an assessment, including: When a new chair or CEO comes on board. Fresh ideas can get caught up in a web of procedure. Clarity and understanding of best practices and why they are in place makes getting to the heart of matters more efficient and ultimately more productive. When you want to take the CU’s leadership or strategy to the next level. If you’re sensing that your leadership is relying on older methods or governance practices that need modernization to keep up with the demands of the marketplace, or if your strategic plan is not agile enough for the credit union to accomplish what it has set out to do, the time has come for a deep-dive assessment. After a crisis. Any major internal or external shake-up that causes board members and management to pause and ask “what happened and how do we prevent it from happening again/” signals the right time to revisit what is working with your governance and what is not. When you’re experiencing very high-or very low director turnover. If your board is struggling to keep up with orienting new members each year, or if it needs to break out of its routine to advance your credit union and its mission, a targeted assessment may gather the intelligence necessary to shift lanes. When you have not done an assessment in the last three years. Simply stated, best practices indicate that there should be regular assessment to ensure that your board, culture and governance are fine-tuned and prepared to shoulder the responsibilities of exceptional leadership and service to your credit union. Where do you start once you have recognized the need to undertake an assessment? Although most groups, including ours, will tailor assessments to the needs and issues facing your specific credit union, there are a few general types of assessment to keep in mind. Assessment of the board “as a whole” Review of board committees Assessment of board officers including the chair, vice chair, secretary, treasurer and committee chairs Self-assessment by individual board members, which may also include peer-to-peer evaluation Appraisal and review of CEO Risk assessment to address such topics as financial risk, strategic planning and risks associated with growing technologically Assessment in and of itself is strongly recommended (CUES and Quantum Governance together offer a survey-only assessment tool ). But in our recently published The State of Credit Union Governance 2018 report , we discovered that credit unions that don’t undertake a more comprehensive assessment at some point may receive results that skew almost exclusively positive. Such a skewed and rosy viewpoint could prevent some credit unions from taking necessary and corrective action. In many cases, a full governance assessment inclusive of surveys, interviews and document review is essential to truly understanding the challenges facing your credit union. Since we don’t know, what we don’t know, we need to stay curious. Asking critical questions of yourselves and holding yourselves accountable is the only way to ensure the success of your governance and leadership efforts, as well as its impact on your community. Previous Next