Ultimately, risk governance ensures credit unions’ long-term sustainability, according to governance experts Jeff Rendel, president of Rising Above Enterprises, and Scott Butterfield, principal at Your Credit Union Partner.
They suggest employing four risk governance best practices to protect both the credit union and members:
1. Communicate
Engage staff from across the organization to understand the importance of risk management and their role in protecting the credit union and members.
Frequent intradepartmental communication keeps information flowing, allowing credit unions to respond to changes in their environment.
2. Focus on the practical
While risk governance leaders must understand the intricacies of the field, a disproportionate focus on the academic side of risk can lead to missed opportunities or harm due to the inability to respond to risks in a timely manner.
3. Engage the board
Board members bring an outside perspective to the credit union. They’re perfectly positioned to ask questions that challenge the status quo and push credit union leaders to take calculated risks that result in improved value and benefits to members.
Board members, leaders, and staff should aim to think like their members. Engage members regularly through market research and focus groups to ensure you take their perspectives and experiences into account when making decisions about products and services.
Keep your unique credit union and membership at the forefront of your decisions.
“If you’ve seen one credit union, you’ve seen one credit union,” Rendel says, citing how no two credit unions are alike. “You can apply certain industry metrics to gauge success, but leadership and board members need to stay focused on the unique needs of the community they’re serving.”
Credit Union Magazine’s Summer 2023 issue highlights the lending outlook for the rest of the year, how credit unions leverage fintech companies to boost digital lending, the power of lending partnerships, common Bank Secrecy Act violations, and the shift board members must make when becoming chair.
