Broaden your board
Intentional development plans keep board members training on track with director demands.
When determining board members’ development needs, Mina Worthington goes straight to the source, asking each director at Solarity Credit Union, Yakima, Wash., to identify their strengths and weaknesses.
“We were wrestling with how individualized to make our development because we all come from different experience levels,” says Worthington, president/CEO at the $832 million asset credit union. “We now have a baseline of where each board member evaluates themselves in the different development areas we came up with in strategic planning.”
- Customized development scorecards offer “gentle accountability” to improve board members’ ability to serve.
- Intentional development and gap analyses allow credit unions to tailor training and development to directors.
- Board focus: Effective board development must evolve with the changing world.
The next step is to match required training with specific directors. In some cases, Solarity’s internal training team may develop courses to address specific topics. Worthington sets aside time at each board meeting to “expand our thought or give feedback on an area,” she says.
Solarity brings in experts in areas such as diversity, equity, and inclusion (DEI) to address emerging topics. The credit union actively recruits people with a growth mindset at every level of the credit union, including the board.
“Lifelong learners who are willing to learn and push themselves all the time are the only ones who fit on our board,” says Merrilou Harris, who joined Solarity’s board as an associate director in 2016, became a director in 2017, and now serves as board vice chair and governance committee chair.
The learning curve for credit union directors is getting steeper every year. Credit union executives and directors alike say there’s no cutting corners on board development to create a tighter timeline. Instead, they recommend setting clear expectations, offering varied resources, and tailoring development plans to individual needs.
The goal is to have new directors make meaningful contributions as soon as possible while keeping experienced directors from settling for outmoded ideas, says Kevin Smith, consultant/publisher at TEAM Resources and co-author of “A Credit Union Guide to Strategic Governance.”
“We can’t expect new directors to sit on their hands and not have input while they learn over the course of years of service,” says Smith, who advises adopting a formal, written development plan.
An effective development plan abandons outdated ideas, such as assuming directors absorb all essential information at meetings or that training only occurs once a year at a conference. Instead, directors need ongoing access to information to understand the competitive environment and “just-in-time training” to address current issues.
“It can’t be an ‘absorbed culture,’ ad hoc, or verbal,” Smith says. “It’s got to be codified to hold people accountable.”
He says the plan should, at a minimum, address the five categories CUNA’s Credit Union Board Certification Program uses: safety and soundness, strategic planning, governance, CEO oversight, and board operations and development.
NEXT: A development scorecard
A development scorecard
An onboarding plan prepares Solarity’s nonvoting associate directors for election to the full board. The credit union assigns a “board buddy” to guide associate directors as they attend asset/liability committee (ALCO) meetings, board meetings, and social events.
Director and associate director scorecards keep track of training programs that are customized with each directors’ input. Education occurs during meetings, financial literacy courses, conferences, and CUNA’s Volunteer Achievement Program.
This approach worked well for Harris, an educator who appreciated having a year “just to learn” and ask “dumb questions” that sometimes revealed that more experienced directors also needed the answers.
Attending conferences side by side with other directors allowed her to discuss the coursework with them afterward. Taking part in social gatherings together eased those conversations.
“I was drinking from a fire hydrant the first year,” Harris said. “I’ve taken advantage of everything that I could.”
Solarity’s scorecard offered “gentle accountability” that reminded Harris she needed to attend more ALCO meetings, which are recorded to accommodate scheduling conflicts. Support from other directors and the executive team kept her focused on being ready to serve.
Attending the strategic retreat led by an outside facilitator prepared her to tackle tough issues.
“That boosted my own training and feeling of confidence,” Harris says.
Changing patterns in volunteer experience and longevity impact board development. When a 50-year director resigned in 2020 at $263 million asset First Alliance Credit Union, Stewartville, Minn., the average tenure for its seven directors dropped from 12 years to five, says President/CEO Michael Rosek.
First Alliance hired a consultant to find the right equation for its board succession plan that now guides director recruitment and development. The consultant polled current directors to learn their expected board tenure and the type of expertise they wanted new directors to have to enhance board performance.
“We asked, ‘What’s the ideal makeup of a board?’” Rosek says.
That input, combined with a commitment to diversity, shapes board recruitment. The goal, he says, is to be intentional at every step as First Alliance recruits “lifelong learners” and allows them to acquire the knowledge needed to be effective directors.
First Alliance added a nonvoting associate director position to the board to give the “next” director a head start through attending meetings and participating in advocacy and education. A written program guides ongoing board development, which relies on educational resources offered through the Minnesota Credit Union Network, CUNA, and other resources.
Rosek notes it’s important to further the professional development of the executive administrator who coordinates board meetings and supports directors’ development. Attending a CUNA conference for board liaisons and tapping other resources prepared the executive administrator to offer solutions when the pandemic limited face-to-face interaction.
NEXT: Gap analysis
SchoolsFirst Federal Credit Union in Santa Ana, Calif., offers a multifaceted development program for directors. Shelly Berryman, vice president of board and committee relations at the $26 billion asset credit union, says the program includes:
- A robust orientation process that matches new volunteers with an experienced mentor who can help them acclimate to the history, culture, and events that have shaped the credit union. The program is entwined with SchoolsFirst Federal’s Advisory Councils and President’s Forum, where new volunteers often begin their service.
- An associate director role that allows appointed members to gain exposure to meetings and discussions while learning about the time commitment and responsibilities for board members.
- A quarterly training program that addresses SchoolsFirst Federal’s internal and external training requirements. Berryman notes credit unions with assets of $10 billion or more face added development requirements from the NCUA Office of National Examinations and Supervision and the Consumer Financial Protection Bureau.
- A requirement that every director attend at least one conference related to the credit union movement or complete online courses from an accredited resource.
- An annual Saturday session offered to all volunteers to address current and future projects, examine topics such as DEI, and foster small group interaction. The board also holds an annual strategic planning session.
Board Chair Greg Marchant is an educator, which strengthens his belief in the importance of tailoring training to meet the needs of specific directors. Marchant began serving on SchoolsFirst Federal’s President’s Forum in 1998 and joined other committees before becoming a director in 2005.
The credit union uses gap analysis to identify individual training needs and offer development options to fill knowledge gaps.
“All of us learn at different paces and from different styles,” Marchant says. “Having the flexibility to choose courses from accredited partners or selecting breakout sessions that fill my individual knowledge gaps is extremely helpful.”
He also appreciates interacting with SchoolsFirst Federal’s team.
“Connecting with those who serve on the front line and hearing the heartfelt stories of how we help our members always ignites my passion and reminds me that the work we do day in and day out is so important,” Marchant says.
Berryman subscribes to various publications that she scans daily for articles, materials, and training resources, which are shared with directors via an online learning management system that serves as the board’s development portal.
Some topics require an added level of time and attention, she says. For example, directors can earn a cybersecurity certification through an online program.
When the pandemic hit, the board added a monthly update to each meeting to hear from every senior leader about COVID-19’s impact.
NEXT: Distilling vital information
Distilling vital information
Almost two-thirds of the population in Washington, Oregon, and Idaho expect credit unions to solve their financial needs in the most efficient way, says Troy Stang, president/CEO of the Northwest Credit Union Association (NWCUA).
State leagues such as NWCUA focus significant resources on helping directors keep their credit unions financially fit and focused on meeting those needs.
A decade ago, credit unions in the three Northwestern states served 30% of the area’s combined population, Stang notes. Today, more than 170 credit unions serve 8.1 million members representing 60% of the population.
“It’s a beautiful thing, but it’s come about much faster than I ever imagined,” he says.
That pace of change means directors must tap development resources to:
- Understand the external environment, including your credit union’s roots, its evolving field of membership, community needs, and the broader marketplace.
- Stay current with the internal demands of running an efficient cooperative, including assessing risk, practicing enterprise risk management, understanding cybersecurity, and ensuring the credit union has the right priorities.
“Directors must be able to dissect those complicated verticals of risk, competitiveness, financials, and employment issues a CEO deals with,” Stang says. “How can we distill those issues down with the proper mechanism to develop those volunteers coming into the board room?”
NWCUA has developed a robust online board resource center that distills resources for directors in nine categories:
- Director recruitment and onboarding.
- Strategic planning.
- CEO and board compensation.
- CEO succession planning.
- Regulatory framework and requirements.
- Current topics.
- Industry events for directors.
- Board effectiveness.
- Supervisory committee members.
Stang believes development will become even more essential as board tenures shift from multiple decades to a single decade or less.
Bringing new directors up to speed quickly will determine whether the board is equipped to focus on the right issues.
Credit unions that seek to help directors keep up with members’ changing world will need to continually refine their approach. Smith notes the development and operational tactics that allow your credit union to thrive today won’t likely create success in the future.
That means directors should always expect the equivalent of “learn something new” to appear on their personalized development plan.
“It’s time to embrace volatility,” Smith says, “and make it work for you.”