Hit the ground running

For some tasks, the best way to learn is by doing.

That’s especially true for credit union board members, says Nick Etscheid, who was an associate director at $690 million asset Verity Credit Union in Seattle before he was elected to the board in 2020.

The experience prepared him for the responsibilities he’d have as a full board member, as well as how to work effectively with the group. “You can find your voice and learn at the same time,” Etscheid says.

Credit unions are developing associate programs, appointing mentors, and updating training to prepare new board members to contribute as soon as possible after their election. The result is a high-performing board that quickly captures the contributions of new directors without losing speed.

Adding associates

An associate director program can prepare new directors before they’re appointed or elected to the board.

America’s First Federal Credit Union in Birmingham, Ala., started its associate program in 2014 to recruit volunteers who could come to their first board meeting “fully equipped” to assume their duties as directors, says Alan Stabler, executive vice president and chief administrative officer at the $2 billion asset credit union.

“Before we had the associate program, you could look at new board members in meetings and tell they were struggling to keep up,” Stabler says. “It was common during meetings to have new directors using a smartphone to Google acronyms.”

The credit union needs to recruit new board members continually because it uses term limits to gather fresh perspectives.

America’s First Federal typically draws associates from the credit union’s membership. Preferred candidates hold valued roles at community organizations or “benefit partner” businesses that allow the credit union to offer on-site enrollment and financial training.

It appoints up to five associate directors to one-year terms that can be renewed at the annual meeting until a board opening occurs.

Nonvoting role

Associate members attend board meetings in a nonvoting role, participate in annual planning retreats, attend training, and may serve on committees or perform special assignments. They also can contact executives with questions and are encouraged to attend conferences. 

“For all intents and purposes, they are board members in training and are at almost every event that regular board members attend,” Stabler says. “They know our routines and they know us. That’s been the beauty of this program.”

To date, several associates have been elected to the seven-member board while only two associate directors left the program due to scheduling conflicts. Three of the four directors who joined the board in 2020 participated in the associate program, and the fourth received training through service on the supervisory committee.

Strategic win

Applicants for associate director positions typically outnumber openings two to one at Verity. Justin Martin, executive vice president and chief operating officer, says Verity’s nine-member board consists entirely of directors who started as associates.

Martin credits the program with creating a high-performing board.

“They hit the ground running,” Martin says. “They’ve learned how to work with each other and how to have collaborative but pointed conversations. This heightened our board’s ability to guide our strategic direction.”

The associate program started in 2010, driven by older directors who wanted to ensure the “next” board would understand Verity’s legacy of community service while welcoming new ideas. They also wanted to recruit young professionals who could relate to young members.

Verity’s board now includes directors in their 20s, 30s, 40s, and 50s, but none older than 60. 

“These are all working professionals with demanding jobs,” Martin says. “They’re dedicating a significant amount of time and energy because they believe in this credit union.”

Martin notes it’s important to be “purposeful” in onboarding associates to make them feel included. When the program started, executives discovered that details like figuring out where associates sit during board meetings can make a big difference in making them feel comfortable and accepted.

Over time, a few associates have left due to other commitments, but most continue to serve until a board position opens. Openings arise more frequently now, Martin says, because experienced board members feel comfortable handing off their seats to trained associates. 

When there are more associates than board seats, those who are not elected can remain in the associate program. Verity also trains board members through orientation, formal mentoring, training, and committee work. As a result, Martin says, Verity no longer worries about letting good director candidates get away.

NEXT: Avoiding ‘automatic agreement’

Avoiding ‘automatic agreement’

Preparing new board members to contribute prevents them from automatically agreeing to everything, which can happen when they lack knowledge about credit union governance, says Tim Harrington, president of TEAM Resources, which provides board governance training and strategic planning facilitation.

“To have a chance of understanding what you’re getting into, it helps to have a good orientation and mentorship program,” Harrington says. “Otherwise, you sit and either make a fool of yourself by asking questions to which you should know the answer or you’re silent, trying to understand what it is we’re doing here.”

Harrington says when a credit union has a knowledgeable board, directors feel confident asking questions while expressing a healthy level of disagreement and dissent.

He suggests credit unions offer both an associate or “apprentice” program and a mentorship program to prepare directors for strategic governance. Mentorship programs generally designate an experienced director as a mentor, although emeritus directors can also be effective mentors.

“The idea of mentorship is to make a director as effective as possible as quickly as possible in modern board governance,” Harrington says. Mentors should be skilled communicators who are willing to hold a monthly post-meeting debrief during the first six months, and then remain available for questions as needed.

Harrington favors a standardized program for orientation and training, which makes it easy to monitor. Training should prepare directors to help credit unions change as quickly as their members and the marketplace.

Topics should include key regulations, bylaws, governance policies, codes of conduct, and the credit union’s history, purpose, and strategic plan.

“Boards have to ensure the credit union is nimble and renews itself quickly,” Harrington says. “You want board members to be effective as soon as possible—other than saying the occasional ‘aye’—so they can contribute.”

Shared wisdom

Piedmont Advantage Credit Union in Winston-Salem, N.C., uses an emeritus program created in 2012 to continue to tap the talents of recently retired board members while helping new directors appreciate the organization’s history and culture, says Dion Williams, president/CEO of the $414 million asset credit union. This informal mentorship is developing into a formal process that will acclimate new directors as they join the board, one or two at a time.

“Bringing on new voices can add diversity and new energy to the organization,” Williams says. “However, one or two new directors does not constitute a majority, and that transition can be difficult if he or she tries to do too much too fast.”

When combined with its associate program, Williams says using emeritus directors as mentors enables Piedmont Advantage to recruit and train board members who become as dedicated, effective, and passionate as the long-term volunteers they replace. One result is efficient meetings that rarely exceed 90 minutes and stay focused on financial reports, the financial outlook, and strategic initiatives.

An informal mentorship at Piedmont Advantage paired Chairman Emeritus Jim Taylor, a 53-year board veteran who retired from service in 2020 after 30 years as chairman, with Tom Mekis, who joined the board in 2007 and now serves as chairman.

Both Taylor and Mekis began their professional careers working for divisions of Piedmont Airlines, the credit union’s original sponsor company. Taylor retired as president/CEO of the Piedmont Aviation division while Mekis eventually left Piedmont Airlines to work for an airplane financing and leasing business.

Taylor says his conversations with Mekis often focused on the importance of serving members with integrity and honor. They also mulled over the “traps” that caused past failures and practices that lead to success.

“In mentoring someone, you’ve got to do it before you can teach it, and you’ve got to be the example,” Taylor says. “You can talk until you’re blue in the face but if you don’t show it in your life and live it, it’s not going to do much good.”

Mekis aims to carry on Taylor’s inclusive leadership style, which fosters productive discussions by encouraging people to ask questions and share concerns. “Doing what you say you’re going to do and listening to others are key,” Mekis says.

To carry on that culture, Mekis plans to take associate members to lunch for informal discussions once pandemic restrictions are lifted. This parallels the full board’s tradition of going to dinner before or after meetings.

Volunteer ‘life cycle’

Williams notes that Piedmont Advantage structures the onboarding process to capture the contributions of directors at every stage of the “volunteer life cycle.”

“There is a smooth entry, then the rigors of being a full voting director, and then a dignified exit in which the director can still contribute by way of assisting the next generation,” Williams says.

CEOs and directors alike note that creating thoughtful programs that prepare new directors to serve is a win-win scenario at every level of the credit union.

“Who benefits the most? Our membership,” Martin says. “They have leadership that truly represents them and is ready to go to work for them right away.”

 

This article appeared in the Summer 2021 issue of Credit Union Magazine. Subscribe here.