Expectations and demands on credit union boards have never been greater. Challenges of ever-changing business trends and industry disruption, especially related to technology and cybersecurity, require advanced skill levels and continuous learning. When you add the constant demands of contributing to and overseeing strategy, it means that credit union directors must up their game. Directors need the background, skills, and a commitment to continuous improvement through learning to execute their responsibilities as board members, to handle strategic challenges and to make sure management is up to the test.
The days of thinking of strategy as an annual, “review-and-concur” event are over. Waiting for an annual strategic planning retreat means missing threats and opportunities. Credit union boards appreciate that they must be more involved with and pay more attention to strategy. A recent survey by the National Association of Corporate Directors (NACD) illustrates how public company directors know they must do more. The NACD found that 71% of directors surveyed felt they should better understand the risks and opportunities that affect performance and drive strategic choices. Nearly as many directors (67%) said their boards needed to improve contribution to strategy development and boost oversight of strategy execution.
Boards must make discussing strategy a priority at every meeting, and robust board engagement with strategy takes time. The NACD reported, however, that over half of the directors they surveyed felt that there was not adequate time for in-depth strategy discussion at board meetings. Effective and well-designed, regularly refreshed CEO dashboards are a focus for our clients. They can help directors stay briefed between meetings and allow directors to track strategy implementation between meetings. Directors arrive at meetings prepared for thoughtful engagement.
For credit unions, like public companies, technology is very often critical to strategy. Yet, the NACD found that only about 50% of the directors surveyed discussed the technology investment needed to support strategy at their meetings. Additionally, only 38% felt they had sufficient metrics to assess the progress of technology-related strategies. Cyber security is critical to credit unions and public companies alike. Yet practically all of the NACD respondents felt challenged in gaining adequate knowledge to oversee cybersecurity issues. Even the directors who are most knowledgeable in this area are finding the quickly and continuously changing nature of cyber threats difficult to monitor. Imagine the difficulty of a director without such a background.
Rigorous strategic decision-making depends on the quality of director knowledge and experience. Many credit unions, however, find that the skill level does not meet current demands and that adjustments are needed. Every credit union’s situation is different, and many know what needs to be done but are unsure how to execute these changes effectively and with a process that is fair, criteria-based and strategic. Enhanced director skill levels combined with a focus on continuous learning, strengthens the board’s culture and its ability to oversee the credit union’s business and contribute to enhancing member products and services on an ongoing basis.