Good Governance: Is your board an ‘enterprise risk’?
Questions you can use to assess the answer.
by. Les Wallace, Ph.D.
As we all journey deeper into our literacy about and implementation of enterprise risk management, there appears to be one large risk credit union boards frequently miss: the risk that your board is not up to contemporary governance standards and ready for the future.
In a recent engagement I had, a CU board created and used a “governance risk” assessment to focus on what it wanted out of my development seminar. What might a governance risk assessment look like for your CU?
The common risks presented by a governance body are fairly obvious: fiduciary and financial capability to oversee a financial institution; adequate meetings and documentation of governance decision-making; attending to regulatory expectations and assessments; and establishing a team to manage board competence. In today’s highly regulated and changing risk environment, these appear to be ongoing developmental challenges for CUs, and areas where regulators are weighing in.
But there are other obvious risks your board might want to identify and assess. Here’s a sampler:
Board Composition and Development
- Might your board be complacent or stale due to lack of new members?
- Are talented people interested in serving on your board or is it hard to find a qualified candidate?
- Does your board have a governance succession plan to identify and groom the next board members?
Discussion