As your credit union’s business model changes, so must board governance.
While the board continues to represent the credit union’s members, the following list from CUNA’s 2012-2013 Credit Union Environmental Scan describes fresh norms that allow your board to grow with your credit union:
►All eyes are on the board. Your markets, regulators, and members are paying close attention to corporate governance. These stakeholders want to be sure the board is safeguarding each stakeholder’s investment in the success and ongoing viability of your credit union.
Simply put, your members are counting on you.
►Participation from day one. Although not directly applicable to credit unions, the Sarbanes-Oxley Act of 2002 sets the tone for corporate governance.
Involvement has become a principal component of service on the board. Regardless of tenure, each board member has equal voting power and is expected to contribute to overall board performance.
►Trading ideas and insights. Boards that actively discuss strategies, results, and direction help promote members’ long-term interests.
Today’s board needs to be actively involved in deliberations and decisions.
►All directors must be heard. While the board chairman may call the meeting to order, ask for votes, and adjourn the meeting, all directors should take an active role in meetings.
The chairman should ask quiet board members about their thoughts and opinions and keep the board focused on strategy. The chairman also might want to appoint different directors to facilitate discussion during board meetings. This is an excellent way to allow all directors to practice hands-on leadership.
►A two-way street. The board hires the CEO to lead and manage the credit union. But the CEO relies on the board for strategic direction as the board relies on the CEO for execution.
The board understands that the CEO must implement strategy, and the CEO understands the board must ensure the credit union’s value is enhanced for all members’ benefit.
►Board/executive sessions. Boards should conduct a full board-executive session about twice each year to have open discussions and provide guidance to the CEO.
During these executive sessions, two board members should give the CEO feedback that the entire board has developed and signed off on.
►Self-evaluation. An effective way to develop as a board—and as individual board members—is to set group and individual expectations and measure results.
Four areas to measure include the board’s:
Many evaluation methods and models exist. Some are as straightforward as a monthly checklist, and others are as involved as an outside audit. Find and implement a system that’s the best fit for your board.