CUs Search for the Next Generation of Board Members
Use your CU’s brand as a tool to recruit new directors.
The typical credit union board member is a 61‐year‐old white male who has served on the board for well over a decade—and has a good chance of doing so for many years to come.
As valuable as this director may be, few credit unions have a reliable system for attracting the next generation of board members, according to a white paper commissioned by CUNA’s Community Credit Union Committee.
“Effective Credit Union Board Succession Planning: New Demand” asks, “If credit unions do not successfully find this next generation of board members how will the industry effectively compete in the future?”
The white paper suggests 10 recommendations for better board succession planning.
1. Identify board diversity goals
Start with a “skills and experience” matrix. This will allow you to evaluate current and desired skills and pinpoint areas of strength and weakness.
Review and update the matrix regularly, taking into account your credit union’s life cycle. A credit union in growth mode, for instance, will require different skills and experience from board members than a credit union that is in contraction.
In addition to hard skills, try to capture elements such as flexibility and the ability to work with others. Consider aiming for a range of ages, ethnicities, backgrounds, and gender.
2. Develop an ‘evergreen’ list
Don’t wait until you have a board need. Instead, maintain an evolving and constant list of potential candidates.
Involve credit union staff in your search—branch managers can be particularly good sources for pinpointing potential board members.
Also include nominating committee members, the board of directors, and the CEO.
3. Widen your search
In many credit unions, the search for new board members is limited to acquaintances and colleagues of the current board. This practice tends to result in a new board that looks a lot like the old one.
It and can also mean that new board members have allegiances that make it difficult for them to question the status quo.
Look for ways to tap into the broader community through business and service organizations, referral agencies, and advertising.
4. Create a CEO/board partnership
Board members and the CEO must create an atmosphere where information is shared, assumptions are questioned, and divergent views are aired.
Creating a CEO/board partnership is critical to ensuring future board members can work well with the full board and the CEO.
5. Create an associate director program
A well‐run associate director program can greatly aid board succession planning efforts. This program can be viewed as a proving ground for future board members in a low‐cost, low‐risk context.
6. Institutionalize board succession planning
There’s no denying the value of long‐term board members. Their strong institutional knowledge and commitment to the credit union are valuable and much appreciated.
But it’s important to balance longevity with the benefits of new perspectives and fresh energy. Consider implementing written policies (term limits, associate directors, etc.) to ensure a rigorous board succession planning process.
As credit union stewards, board members have a unique responsibility to put effective succession planning processes in place.
7. (Re)consider term limits
Term limits aren’t commonplace in credit unions today. Some reasons for this are legal while others are strategic.
But term limits can play a positive role in the health of the credit union’s board. Talk to credit union peers using term limits to discuss the efficacy of this approach at your credit union.
8. Use the CU brand as a recruiting tool
A strong brand will help drive potential volunteers to the credit union. If your credit union isn’t widely recognized locally, chances are you haven’t effectively communicated the unique and inspiring value you represent.
Develop tactics to brandish your image more aggressively. There’s no denying the power of potential volunteers coming to your credit union due to its well‐respected place in the community.
9. Implement director self‐evaluation
Board self‐evaluations allow you to create an objective conversation around board performance issues. These types of conversations don’t typically exist because most boards lack information about their performance.
And, perhaps most difficult of all, you must be willing to remove members from the board who don’t meet performance goals.
10. Require continuing education
Although increased board diversity combined with professional expertise and experience will help you create a better board, these traits aren’t enough. Board members will only gain and maintain needed knowledge and proficiency with ongoing education.
Continuing education policies aren’t just “feel good” measures—they correlate strongly with good governance. “Effective Credit Union Board Succession Planning” reports that all credit unions ranked in the top 10% of governance had continuing education policies in place, compared to only 11% among those in the bottom 10%.