How high performing is your board?
In her book, Great Companies Deserve Great Boards, Beverly Behan describes five performance modes: Imperial, Independent, Entrenched, Hostile, and High Performing. Where does your Board land?
I have had the opportunity to work with boards, report to a board and serve on boards. Many of these boards strive to be high performing boards, but actually function in a completely different mode. Their perception isn’t reality. The perception of the leadership team may not be a reality either.
If, as a consultant, I ask a leadership team to give me examples of how the board has challenged their thinking and made a genuine impact on at least three strategic decisions and I get an eye roll, I know this is probably not a high performing board. I’ve witnessed a few eye rolls.
If the credit union’s CEO is choosing friends and former colleagues to be nominated to the board, the board functions in the “imperial mode.” The CEO runs the credit union and runs the board. Boards made up of friends of the CEO often don’t challenge the CEO’s thinking or push a strategy that is not aligned with the CEO’s desire. Board members tend to rubber stamp when approving just about anything. While there are plenty of CEOs that enjoy the rubber stamp, this does not allow the contribution a board should make as the representative of the members.
The “entrenched mode” board is more concerned about maintaining their positions on the board than what is best for the credit union. Whether it’s status, an annual travel allowance, or compensation, these boards tend to be highly complacent. They are perfectly happy with the way things are as long as they maintain their board seat. In some cases, they will cut the travel budget for staff education to maintain their own.
When a board becomes polarized, it moves into “hostile mode.” The board divides into factions. The loudest voice in the faction influences the votes of the others. Aggressive behavior hijacks the board meeting and prevents the organization from moving forward. While some constructive disagreement is critical to avoid groupthink, when a frustrated CEO spends more time managing drama in the board room than strategizing about the future, this is not healthy discord.
A board operating in the “independent mode” makes a thoughtful contribution to discussions. They recruit diverse candidates as new board members. They view themselves as a check and balance for the organization. As board members, they want to make a contribution and take their roles seriously. Yet, they are still not quite high performing.
A “high performing” board strives for constant improvement and will openly tell you what and how they are working on it. They are diverse and represent the membership, not just members like them. The tone in the boardroom matches the tone or culture of the credit union. Board meetings have a sense of vibrancy. They focus on strategy and work with management. The result is solid financial, operational, and strategic results. This board provides great value to the leadership team, especially the CEO, in driving the organization forward.
At Humanidei, we help credit union Boards reach high-performing levels through strategic planning, Board recruitment, and Board self-evaluations. If your credit union is ready to elevate your performance, reach out. We are now booking strategic planning engagements for the fall of 2023.
