Developing effective board/CEO relationships sets up credit unions for success, says John Hirabayashi, CEO at $2.7 billion asset Community First Credit Union of Florida in Jacksonville.
Achieving that goal takes significant effort, he says.
The success of the relationship falls largely on the CEO, says Theresa Trimble, CEO at FRB Federal Credit Union in Washington, D.C. She has seen both sides, serving on the board of the $127 million asset credit union before becoming CEO.
“Directors have a huge responsibility,” she says. “It’s an important role, and yet they’re unpaid, this isn’t their only job, and they may have only passing knowledge of finance. It makes for an interesting dynamic.”
With that in mind, Trimble says the CEO and board need clear, shared expectations of each role. At the same time, CEOs must keep in mind that expectations can change depending on factors such as field of membership, asset size, and technological advances.
Through it all, Trimble reminds CEOs that:
Trust is essential.
CEOs need to converse with board members, not set edicts.
Have a shared purpose and values. A credit union’s purpose, values, mission, and beliefs “frame how we treat one another and how we operate,” Hirabayashi says. “When you bring on a new board member, you show them your purpose and values and ask, ‘How does this sound to you?’ If it’s a good fit for them, it’s a good cultural fit for the organization.”
Keep board committees to a minimum. Board members shouldn’t get too far into the details of credit union operations. Community First only has executive and audit committees, using ad hoc committees or task forces when needed.
Develop an effective board meeting agenda. Fill board meetings with topics directors care about. Community First places many items on consent agendas, only diving deeper into a topic when a director wants to discuss it further. The credit union also sets aside 30 minutes of every meeting to discuss a strategic issue.
Prioritize strategic planning. Rather than having one board planning session per year, Community First makes strategic planning a year-round process. The credit union revisits the strategic plan and priorities from January through April, meets with the board of directors in April, holds strategic implementation sessions in late spring, and conducts strategic sprints, budgeting, and ongoing implementation from July through December.
Engage the board by surveying them about how they feel about the direction of the credit union and exploring a strategic topic each month. Administer a governance assessment to evaluate how the board is operating, and budget for educational and networking opportunities.
Build and sustain a quality board. Rather than holding open elections for new board members, Hirabayashi prefers nomination committees that appoint skilled people to fill open seats. Credit unions can also implement term limits to prevent directors from staying on the board too long. A diverse community advisory council can also keep the board fresh, advocating for the credit union and acting as a sounding board in the community.
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