The ‘sounding’ board

“We don’t pay our CEO $XXX,XXX (dollars omitted) per year to ask us for ideas. We expect him to bring us vetted, ready-for-action strategic choices and recommendations for discussion and decision,” stated a director at a national board development conference. It brought back good memories of a discussion with Arne Sorenson (deceased 2021) during his time as CEO of Marriott International. “I look to my Board as a sounding board. Directors sharpen my thinking, remind me of risks, and encourage me to take appropriate chances. They expect me to lead as an expert in my industry. If at any time I go to my Board looking for new, strategic ideas about the future of Marriott, they have the wrong CEO.”

It’s a question that fills conference breakout rooms and formal planning sessions: ‘What is the right role of the Board with respect to credit union strategy?’ Where one Board feels a “hands-on” approach is best, another Board looks, first, to its CEO. How are credit unions getting this process right? In listening to scores of credit union executives, three factors emerged as drivers and shapers of sound systems.

Ask for the Board’s feedback on challenges and opportunities it finds most crucial. Many credit unions use their strategic planning sessions to gather these concepts. Often, the CEO and her or his team will lead conversations on a variety of appropriate subjects – growth, revenue, mergers, new products and lines of business, scale, technology, brand, etc. An applicable pre-planning tool asks each Board member to provide one topic he or she wants included in the strategic conversation. This allows the Board to make certain that its important interests are recognized and reviewed, as well as consider the CEO’s reasoning as to the next level of strategic progress for the credit union.

Expect the CEO to develop a strategic approach and plan, bringing back schemes that incorporate the opportunities and challenges originally discussed. One CEO shared that her Board knew that growing revenue was important, but – as a voice for members – wanted to ensure that core banking services were zero- to low-fee. Another CEO described that his Board agreed that growth in new markets was needed, but expected the CEO to define the most likely markets for long-term success. The “hands-on” was left to the CEO as the working professional to determine operating matters such as pricing, resources, investments, and trade-offs.

Communicate the preferred recommendation to the Board. Here is where the Board can bring a lot of value by asking beneficial questions. For example, do the potential solutions address opportunities and challenges discussed earlier? Do the plans seem sensible given scenarios and assumptions? Do the strategies feel too much of a stretch given the economy, resources, capital, etc.? Do the ideas seem too conservative for the opportunities presented? Might there be room for more risk? What are the trade-offs (even if time-based) that help the credit union deliver on the most important aspects of strategy?

Boards provide extraordinary value to the members they represent and the credit unions they serve. Safety and soundness is primary, but a close second is the legacy value of always evolving and enriching experiences and results. This requires frequent strategic conversations to establish that value is continuously delivered for current and soon-to-be members. As your credit union continues to change for its members, consider incorporating these ideas to enrich your Board’s role in strategy and the benefit it provides your members and CEO.

Jeff Rendel

Jeff Rendel

Jeff Rendel, Certified Speaking Professional, and President of Rising Above Enterprises works with credit unions that want elite results in sales, service, and strategy. Each year, he addresses and facilitates ... Web: Details