Embrace strategic expansion
Tomorrow’s directors will be activists to anticipate and prepare for uncertain futures.
How will boards need to broaden their approach to governance?
What advice will help them achieve their vision?
Credit Union Magazine posed those questions to three board members: Eric Day, $1.4 billion asset Credit Union of Southern California, Anaheim; Paul Sippl, $1.6 billion asset Fox Communities Credit Union, Appleton, Wis.; and Nhu Yeargin, $2.6 billion asset Langley Federal Credit Union, Newport News, Va.
How will board members manage their responsibilities?
Day: Directors will need to be much more involved in politics and learn to advocate for the system. If we don’t get good at telling our story, the banks will.
We have lost some of our best advocates due to the growing number of retirements and consolidations. Board members will need to step up and fill the void. They must learn to explain the credit union difference, why we exist, and the economic benefits we provide to members and our communities.
Yeargin: Forward-thinking directors will complement management and move beyond the regular-level mandates such as governance, audit, and compensation. Boards will need to be highly involved in strategic expansion while managing risks effectively.
‘Never stop learning. Stay curious and stay current.’
What other changes should board members prepare for?
Day: I don’t believe the directors’ day-to-day roles will change that much from today. A director’s role has never been to run the business. Their role is to understand the business and what makes it thrive. Their role is to hold management accountable.
Yeargin: Directors will be more deeply involved in setting strategy due to the ever-changing environment. Directors need to understand the current state of the industry, including the financial environment, technology challenges, and economic conditions of their market.
They must grasp the current state of their institution, including but not limited to financial performance, technology infrastructure, and market competitiveness. Directors may need to be more business development champions than they are today.
What other advice can you share?
Day: Never stop learning. Stay curious and stay current. Read books on business and leadership, and read financial and trade publications.
Take advantage of education courses. All of these will make you a better board member.
Most important, never forget why you serve on the board: To improve the lives of your member-owners. If you don’t get that part right, none of the rest matters.
Sippl: Know how members view your organization. How easy are you making it for your member to do business with you?
Social media will continue to evolve. Board members have to stay in sync with social media to find out what their members are thinking.
Yeargin: Understand that mission sustainability is your primary responsibility. Directors must be able to work effectively, both as members of a team and as individual contributors.
Move beyond rubber-stamping of management strategy to thinking and acting as an activist to anticipate and prepare for uncertain futures. Management strategy needs to evolve to board and mission strategy.
Raising the level of CEO accountability is essential for the enterprise to thrive in the future. Directors must be “all in” because the future of the organization and their stakeholders depends on it.
►More technology and strategy on the horizon for board members in part I.