Good governance takes a village

by. Kelly Schmit

Good credit union governance goes far beyond the board of directors to encompass several other parties, including CEOs, committees, task forces, credit union members and regulators.

Indeed, as I listened to Michael Daigneault, principal/founder, Quantum Governance, L3C, a CUES strategic provider, talk at CUES’ Directors Conference early last month, I began to understand the breadth of everything needing to be accounted for to move a credit union forward.

Daigneault said that credit union governance “is more about a complex web of stake holders, than any single group.”

He emphasized that the “village” of governance can be either:

  • dysfunctional—it holds routine meetings that focus on past results;
  • functional—directors ask pertinent questions, but watch the clock;
  • responsible—a hands-on team doing regular board assessments;
  • exceptional—does what a responsible board does, plus executes effective board composition, communication, and more.

Daigneault feels most credit union boards are at the functional level, and described how CUs can move their governance from functional to exceptional. Moving forward is a big job with several factors standing in the way. The Directors Conference audience shouted out a few barriers to being exceptional, including:

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