Cyberattacks, financial crises, hurricanes, and health pandemics. While they look substantially different, each is a crisis. When one happens, credit unions must be ready to respond appropriately.

Russell Country Federal Credit Union in Great Falls, Mont., has entered crisis management mode multiple times over the years in response to Y2K, the 2008 financial crisis, and cyberattacks.

But the coronavirus (COVID-19) pandemic has proven to be the most challenging crisis the $76 million asset credit union has faced so far.

“None of the previous events threatened human life and the economy like COVID-19. While an ‘easier’ crisis such as Y2K has a theoretical end date, there is no known end date for COVID-19,” says Bryan Fox, a board member at the credit union since 1981. “This all makes COVID-19 a game changer.”

The multidimensional crisis means credit unions and boards must gather information and make decisions that address the health response piece—how to continue serving members while ensuring their safety and that of staff.

They also need to make business and financial decisions that will allow the credit union to continue providing products and services to meet stressed members’ financial needs, such as new loan products, loan deferrals, or waived fees.

“In any crisis, individuals must come together in a synchronized and integrated fashion to achieve common objectives and goals,” Fox says. “The COVID-19 pandemic has tested our board’s agility and flexibility. It forced us to quickly cast out old paradigms, think outside the box, and adopt creative solutions while keeping everyone informed.”

Identifying solutions and effective decision-making are the critical tasks boards must carry out during any crisis.

Boards are an integral resource when leadership shifts into crisis management mode.

Before the crisis

It’s often difficult to know exactly how a crisis will hit and what impact it will have. But that doesn’t mean boards can’t take steps to prepare before a crisis occurs.

Tony Ferris, CEO of Rochdale Paragon Group, encourages credit union leadership and boards to engage in “proactive preparation.” This includes predefining the objectives surrounding a crisis, such as gaining a general idea of how to continue to serve members, protect staff, and assist in the community.

“Have those dialogues about what you will and won’t do under certain situations,” Ferris says.

He notes it’s beneficial to involve the board in tabletop exercises, which can be used to determine the board’s role and expectations during a crisis.

Ferris says these types of exercises allow the credit union to be more organized when a crisis strikes and enable the board and leadership to respond more quickly and effectively.

“The time to respond to a crisis is long before one exists,” says Ted Henifin, board member at $3.1 billion asset Langley Federal Credit Union in Newport News, Va. “Policy development, trust building, and defining roles and responsibilities are hard work, but it must be done outside of a crisis."

NEXT: Response during a crisis