More than ever, credit unions need active, engaged, knowledgeable directors to set a sound strategic course for the organization.

But how do you ensure you have the best people possible in your boardroom?

Optimizing board quality is one of three key responsibilities directors should own, along with governing for long-term sustainability and providing members a systematic voice in the direction of the credit union, says Jeff Rendel, a financial services strategy consultant and former executive.

Improving the composition of the board involves not just bringing in fresh perspectives and skill sets, but also determining when current directors no longer warrant a seat at the table, says Rendel.

“Dynamic participation is a stipulation of governance,” says Rendel, of Rising Above Enterprises.

Yet statistics show most credit unions don’t formalize that mandate, according to the Filene Research Institute. Among credit union boards:

• 35% don’t have a procedure for terminating an ineffective director.
• 37% don’t believe they have an effective leadership development process.
• 61% don’t have a formal board/director evaluation process.

Work to rectify any shortcomings in those areas at your credit union, Rendel advises. Instituting a self-evaluation process that holds underproductive board members accountable and defines needs for development opportunities can pay dividends quickly.

Many credit unions fall victim to overloading a board with too many similar thinkers, Rendel says. That’s an even more distinct possibility at credit unions with roots in a single sponsor, because often the credit union recruits board members who have worked at the same company for decades and have adopted the same philosophies.

To vary the knowledge bases and skills of the board, determine what professional acumen and demographic representation you lack in the room. Perhaps you would benefit from adding an attorney, or someone with real estate experience or a human resources or marketing background. Also consider whether the age, racial, or gender makeup of your board matches that of your membership.

To identify candidates, tap into current directors’ professional and personal networks, and enlist your marketing department to target market to individuals in your membership with those skills. Develop a subcommittee to evaluate the candidates and make a recommendation to the board.

Create or bolster an onboarding process for new directors that features training and networking activities, and encourage board members to develop expertise in a specific area of interest, such as investments or member business lending.

►Governing for sustainability. Set long-term goals but take risks within that framework, advises Rendel, who showed attendees a slide representing the traits of “10x” organizations—those that perform 10 times better than the competition.

• Legacy takes priority. Long-term interests must trump short-term concerns. Practice “productive paranoia,” Rendel advises, by keeping your focus on existential threats and opportunities rather than perceived daily concerns.

• 20-mile march objectives. Emphasize the value of consistency in pursuit of a goal, as explorer Roald Amundson did by insisting that his team march 20 miles daily in their quest to become the first to reach the South Pole. “What can we do every day without fail, regardless of the economic hurdles we face?” Rendel asks.

• Measured progress, measured transformation. Define a quantifiable, strategic growth focus, such as dedicating 70% of your resources toward core markets, 20% toward adjacent markets, and 10% toward transformative markets. “Ask of your management team, ‘Are we capitalizing on our core markets first?’” Rendel says.

• Innovation as habit. Adopt a mindset of “empirical creativity,” Rendel says. Select options that offer the greatest chance of success.

Aim for your board to fulfill the “Challenger” model of governance by bringing in new ideas and holding management accountable to goals and paths the credit union has decided upon.

Discover opportunities in challenges, Ask a lot of “What’s next?” and “What works better?” questions. Blend intuition with empirical support and and innovative mindset. Engage in robust discourse instead of striving for quick consensus.

►Provide members a systematic voice. In a cooperative, nonprofit, democratically governed organization, perhaps no duty is as crucial and foundational as offering representative leadership for your membership.

Many directors regard themselves as being a voice for the member, and act on that responsibility by engaging with them in dialogue, representing their needs, and following through on pledges.

But don’t let this happen only by scattershot or serendipitous exchanges. Consider it your duty to formalize channels through which members can express their concerns and ambitions for the credit union, and point out business opportunities.

“Do you, as a board, have a strategic way to receive member input and consider it?” Rendel asks.

Formal channels for communication between members and the board include:

• Surveys, perhaps with a small-scale incentive for participation;
• Focus groups, which your marketing department can orchestrate;
• "Town hall" conversations at the annual meeting;
• A “suggestion box” or hotline for complaints.

On the flip side, as a guiding principle directors should regularly ask each other, is the credit union delivering full value to its members? Measuring and reporting to members affirmative evidence of that success is vital.

Demonstrate that you serve as their ally by:

• Grading your credit union’s pricing against the competition;
• Enacting loyalty rewards (customarily based on products per member statistics);
• Providing products and services that meet members’ needs;
• Championing operational efficiency;
• Embracing community partnerships; and
• Reinforcing positive brand image.