Over the years, I’ve noticed considerable growth in how credit union boards operate. They’ve become more involved in strategy and self-governing—and thus, more relevant. Their forward-looking viewpoints position them as strategic partners with their CEOs.
Below are four ways to deepen your board’s relevance and continue its positive development:
1. Understand your business. Conventionally, directors occupied the boardroom. Today, they visit operations, attend conferences, and develop relationships with operating executives. This deepens their understanding of how you serve members.
An education plan is helpful. Attending conferences helps directors better understand operations or industry issues. Dedicated time with C-level executives is useful to understand a day in the life of business development, lending, and operations. With a strategic view of how your credit union earns revenue and profit, directors can experience strategy in action, supporting CEOs and executives in their decisions.
2. Build for the future. “Let’s stop building for this year’s results and focus on the next decade,” said another CEO during a strategic planning session.
The purpose of this off-site meeting was to discuss and plan for the most challenging issues rather than listen to formal presentations. The board agreed and focused the discussion on what the credit union should be for its members.
What if your next planning session was focused less on numbers and more on ideas? What if your first question was, “What do we need to be for our members?” The discussions, ideas, and answers you discover could give CEOs the guidance they need to build a strategic and operating plan that delivers on your board’s vision.
3. Connect with your CEO. Well-honed boards recognize the value of good communication with their CEO and devote a lot of time to it. How boards support, challenge, and relate to their CEOs is a gauge of value to the CEO. Often, CEOs need to visit with their boards to discuss strategic thoughts or gain assurance they’re moving the credit union forward consistent with the board’s vision.
Encourage your CEO to draw on your board’s collective experience. Your board may more deeply understand the history and nuances of your credit union and field of membership. Make it easy for your CEO to expand his or her partnership with your board.
Meet with your CEO as a board and as individuals. The intent is beyond discussing tactics; the purpose is to mutually increase the commitment to and from your CEO.
4. Succeed with board turnover. A Harvard Business Review article—“How Much Board Turnover is Best?”—describes how S&P 500 companies performed with respect to board turnover. The most successful companies had moderate turnover (about one new board member each year). Interestingly, the least successful companies had no turnover.
Board turnover isn’t a target to reach and isn’t the only driver of performance. But, an acceptable amount of turnover is a tool that steers performance over time. Recruitment, term limits, and re-election are always conversation starters. And most boards agree that new members and ideas are welcome, if not desired.
Is there a member of your board who's willing to step down? Could your board recruit or appoint a new member who adds immediate value? Perhaps a strategic plan for your board could include strategies to seek new members as a way to continue adding value to your credit union.
Management thinker and expert Jim Collins describes “Level 5 Leadership” as building enduring greatness. In a nutshell, the good of the credit union should drive all conversations. Consider some of these board leadership concepts as you build a credit union to serve generations of members.
This article initially appeared in Credit Union Directors Newsletter, which provides strategic insights for policy makers. Subscribers can choose to receive the print edition or PDF version.