What are boards doing to take their credit unions above and beyond?
The CUNA Volunteer Leadership Committee explores that question in its latest white paper, “ ‘Next’ Practices for Credit Union Boards,” identifying three interlocking components:
Each area plays into and builds on the others, the white paper explains. A credit union’s community involvement has an impact on the credibility and power of its political advocacy. And a board’s approach to governance can support, or stifle, a credit union’s social and political impact.
Consider these examples of credit unions excelling in each of the three areas.
SEFCU’s social impact
When Michael Castellana bought a lottery ticket years ago, someone asked him what he’d do with the money if he won. He replied that he’d create a foundation to support efforts to break the cycles resulting in hunger, homelessness, domestic violence, and other societal ills.
Soon afterward, he suggested to the credit union board that SEFCU allocate at least 20% of its net income each year—depending on the credit union’s financial results—toward community causes.
“To a person, the board members stood up and said they understood what we were getting into,” he recalls, “and they agreed with it 100%. They also understood that we have to be a top-notch financial institution to be able to do what we were talking about.”
SEFCU’s Community Support Program has benefited more than seven million people by contributing more than $14 million and logging thousands of hours of community service.
“We really are here to change the world,” Castellana says.
Truliant FCU’s advocacy
Strong political advocacy depends on “deeply engaged” board members because “their motives are pure and effective,” says Marc Schaefer, president/CEO of $1.9 billion asset Truliant Federal Credit Union in Winston-Salem, N.C.
As board chair for Truliant Federal, Greg Thrush believes credit unions must take a united voice to Congress. That means board members must understand the need to set aside personal political feelings when they meet with legislators.
“We need to make sure we’re focused on what’s good for credit unions, not on what individuals would like to see government do,” he says.
Thrush points out that North Carolina is a big banking state, and the banks can pour big money into politics. “But we have the votes,” Thrush says. “We remind our political leaders of that constantly by telling them how many of their constituents are our members.”
University FCU’s board evolution
The board of directors at $1.9 billion asset University Federal Credit Union in Austin, Texas, is “evolving to include higher-level thinkers and strong business people,” former board chair Gerald Davis says. “They come from a broader cross-section of the community, and there’s a nice balance of gender and ages.”
The credit union’s directors also are community leaders, and many of them serve on boards of other community organizations.
University Federal President/CEO Tony Budet says credit unions that place faith in their service mission inherently attract top board candidates.
“They don’t want to be part of an organization that just offers the lowest loan rates,” Budet says. “They want to be part of an organization that has a bigger mission—to try to effect change in the community and have an impact on the quality of life here in a variety of ways.”
The transformation at University Federal changes the board’s role in governance—and even how it conducts meetings. Better advance communication has focused discussions, allowing directors to address vital matters that affect the credit union’s growth.
This article initially appeared in Credit Union Directors Newsletter, which provides strategic insights for policy makers. Subscribe now to the print edition or PDF version.