Credit union boards have grown more involved, self-governing, and valuable. Their forward-looking viewpoints have resulted in boards renewing themselves as strategic partners with their CEOs. Below are four ways to deepen your board’s relevance to your credit union and credit union members.
Understand Your Business
Conventionally, directors occupied the board room; today, they visit operations, attend conferences, and know operating executives. Far from crowding CEO real estate, this deepens understanding of operations. One CEO offers his perspective: “The more our directors understand, the less we get ‘off base.’ Our board meetings are not about scrutinizing numbers; our meetings focus on strategic topics and opportunities.”
An education plan is helpful where directors attend conferences that help them better understand operations or industry issues. Dedicated time with C-level executives is useful to understand a day in the life of business development, lending, and operations. With a strategic view of how your credit union earns revenue and profit, directors can see strategy in action, supporting CEOs and executives in their decisions.
Build for the Future
“Let’s stop building for this year’s results and focus on the next decade,” said a CEO at a recent strategic planning session. This offsite meeting was to discuss and plan for the most challenging issues rather than listen to formal presentations. The Board agreed and focused the discussion on what the credit union should be for its members.
What if your next planning session was focused less on numbers and more on ideas? Instead, what if your leading question was, “What do we need to be for our members?” The discussions, ideas, and answers you discover give your CEO the guidance he or she needs to build a strategic and operating plan that delivers on your board’s vision.
Connect with Your CEO
Well-honed boards recognize the value of good communication with their CEO and devote a lot of time in keeping close to their CEO. How boards support, challenge, and relate to their CEOs is a gauge of value to the CEO. Often, CEOs need to visit with their boards to discuss strategic thoughts or gain assurance that he or she is moving the credit union forward consistent with the board’s vision.
Encourage your CEO to draw on your board’s collective experience. Your board may more deeply understand the history and nuances of your credit union and field of membership. Make it easy for your CEO to expand his or her partnership with your board. Meet with your CEO as a board and as individuals. The intent is beyond discussing tactics; the purpose is to mutually increase the commitment to and from your CEO.
Succeed with Board Turnover
A past article in the Harvard Business Review, “How Much Board Turnover is Best?” describes how S&P 500 companies performed with respect to board turnover. The most successful companies had moderate turnover (about one new board member every few years). Interestingly, the least successful companies had zero or too much turnover.
Board turnover is not a target to reach and is not the only driver of performance; but, it raises the issue that an acceptable amount of turnover is a tool that steers performance over time. Recruitment, term limits, and reelection are always conversation starters; however, most boards agree that new members and ideas are welcome, if not desired.
Is there a member of your board that is willing to not stand for reelection? Could your board recruit or appoint a new member who adds immediate value? Perhaps a strategic plan for your board could include plans to seek new members as a way to continue adding value to your credit union.
Management thinker and expert Jim Collins describes “Level 5 Leadership” as building enduring greatness. In a nutshell, the good of the credit union should drive all conversations. Consider some of these board leadership concepts as you build a credit union to serve generations of members beyond the ones you now serve.