Ask Chuck: Small Credit Union Advice from the CUinsight Community # 2
Chuck Cockburn travels across the United States coaching small and mid-size credit union CEOs on how to create a foundation for long-term success. Submit your confidential question to Chuck by emailing AskChuck@CUInsight.com.
Dear Chuck:
I was promoted to CEO last year to turn around our credit union. Like others we face a serious decline in members and loans. The old way wasn’t working. Since then we’ve worked hard and made exceptional progress. My board is actively involved in managing the credit union, on every committee, even though we are well staffed with 13 employees. They even insist on approving every employee for hire from tellers to our critically needed business development and marketing specialist. The last round of interviews included well-qualified individuals the board committee member called “too friendly,” which is in my management opinion an asset to the position. What can I do to change the dynamics now that I’ve accepted this culture as normal/acceptable for so long?
Signed,
Board Holding CU Back ($116 million in assets)
Dear Board Holding CU Back:
Board micromanagement can be a result of many different reasons. In your case, it appears the Board experienced a crisis and once the crisis was over, they found it hard to stop completing management activities and decision-making. The Board continues to act as if there were a crisis long after the crisis is over. Keep in mind, the Board’s micromanaging is because they care about the credit union, they have fear, and they do not know what else to do.
I suggest two solutions. First, the role of the Board and the CEO must be clearly defined. The process for defining the roles should help the Board understand what they should do and what should be delegated to Management. Secondly, the Board needs to learn how to lead and govern at the Board level. Effective Board governance and fiduciary oversight is a very important function and can be made exciting. The Board cannot effectively lead and govern while spending time on day-to-day management activities. Finally, my experience suggests that you will need an outside consultant help facilitate both suggestions.
Chuck is the President of Credit Union Strategic Planning, leading the Net Worth Restoration, Field of Membership Expansion, Board Governance and Small Credit Union CEO Mentorship Programs. Chuck’s 25-year CEO track record (and 40 in the business) has been to profitably grow credit unions while significantly improving service and morale. Chuck’s coaching resulted in eight prior direct reports becoming credit union CEOs.
