The best boards ask the best questions.
That’s because they know asking probing questions leads to good ideas, says Jeff Rendel, president of Rising Above Enterprises. He addressed the CUNA National Credit Union Roundtable for Board Leadership Friday in Las Vegas.
Board questions should focus mainly on “central ideas,” which serve as the credit union’s foundation, Rendel says. “Strategy derives from these ideas, and plans for execution are developed by the CEO and her team. For directors—and to remain strategic in thinking—focus on whether the ideas are sound, driven by trends, and capable of execution.”
Some examples of central ideas and related questions board members should ask the CEO:
• A differentiated member experience. How do you measure the member experience? What have you learned and what have you changed? What’s on the horizon for the next level of member experience, and what investments will be required?
• Strong lines of business. What products drive most of our revenue? Are there products we offer that haven’t met their potential with members? Are there products we should offer, discontinue, or reprice?
• Noninterest income. Where is our net interest margin headed? How do we manage our margins and interest-rate risk? How much do we rely on noninterest income, and how will that change in the future?
• Efficiencies. Where is the credit union efficient, and where are greater levels of efficiency required? What investments are required to build efficiency in our processes? How do we measure efficiency, and what results do we expect?
• Strong workforce. What culture is necessary for the credit union to make strategic progress? Do we have that culture? How are developing our next generation of managers and executives? Do we offer competitive compensation?
Board members should require the CEO to provide quarterly updates on the plans, progress, and results for these central ideas, Rendel says, and conduct occasional “deep dives” that discuss strategic factors behind the ideas.
“You need to ask what’s in it for the members?” he says. “Ensure that you address the near-term member experience while managing long-term value.”
Bill Merrick is deputy editor of Credit Union Magazine. Follow him on Twitter via @CUMagazine.