Charting a New Direction

The roles of leadership in today’s credit unions are changing; specifically, there’s an important new way to think about key board leaders.

The ideal role of board treasurer was a recent topic of conversation on CUES Net™, the CUES-members-only listserve. Without identifying which CUES members were having the conversation, the CUES Net moderator asked for my input, and posted my thoughts back to the list. My thoughts stirred a bit of controversy, and I thought to myself, “Well, good.  Let’s have this discussion.  Let’s talk about the changing roles of leadership in today’s credit union.”

In this article—as I did in my comments to CUES Net—I’m going to challenge assumptions about the role of board treasurer—and the other officers. Get ready.

I’ve never been one to shy away from a good old-fashioned give and take, and I think it’s time that we all push ourselves to go beyond the status quo when we think of the board officer positions that are leading our movement into the future.

I’ve written and spoken in recent years about the nine key challenges facing the credit union of the future. (Read about them in my article). To be certain, you and your colleagues are facing a lot more challenges today than you were a decade or more ago when many of you signed up as board members.

So, if the world around you has changed, and continues to do so at a rapid pace, shouldn’t some of our assumptions and approaches to leadership be open to change, too? I think so, and I’m encouraging you to revisit some long-standing assumptions you have about board leadership.

Assumption #1: Boards should never “manage” anything.

I love asking board retreat participants if boards should manage. The vast majority of board members (and nearly all CEOs) gasp and respond with a resounding and unequivocal, “no.” So, I continue prodding, asking: “Are there no circumstances under which a board should manage?” I get silence—and blank stares. “None?” I ask.

Ultimately, I’ll have one brave individual who will posit that: “Boards should manage their one employee—the CEO.” Another brave soul may offer, “Boards should manage themselves.” And this becomes my opportunity—they are correct!

If a credit union board should be responsible for managing its own operations, then it would be logical to consider your chair as your board manager-in-chief. He or she is responsible for the overall, effective functioning of your credit union’s board. Beyond crafting and facilitating your meetings in partnership with the CEO, your chair should ensure that your board is building a healthy governance structure and practices. (Of course, we recommend an active governance committee as an important partner in this endeavor, too.)

But, these are just the nuts and the bolts part of the job. The real key to what the board chair does is in fostering and then managing the right culture for your credit union board. Be sure that you and your colleagues appoint a chair who can inspire and engage your board members—one who sets and models high ethical standards, from both personal and professional points of view.

It’s also important that he or she work well with the credit union’s CEO—fostering a constructive partnership between the board and senior management.

Assumption #2: The vice chair’s job is boring.

Much like the vice president of the United States, the position of vice chair used to be pretty boring. But it doesn’t need to be. What if you reframed the vice chair role as your board learner-in-chief?

Yes, of course, this means your vice chair should be learning everything he or she can about the role of the chair should the vice chair be needed in that role some day. It is, after all, the vice chair’s role to be “at the ready” at all times. This means your vice chair should be ready to fill in for short-term absences and the potential long-term replacement of your chair.

But being the board learner-in-chief can mean so much more. And it should. To meet the challenges before you, you and your colleagues need to be constantly learning and growing. (Read coverage of my CUES Webinar, “Fostering a Culture of Board Learning,”when you log in as a member of the Center for Credit Union Board Excellence—or email cues@cues.org for a 30-day free trial.)

There is no one better suited to lead this charge toward adopting the culture of a “learning board” than your vice chair. He or she should already be in full learning mode and can be a catalyst to encourage you and your colleagues to actively pursue learning on an ongoing basis.

Lastly, you can consider charging your vice chair with special projects or initiatives like being a public spokesperson at key events, coordinating board retreats, designing better board meetings, strengthening the strategic planning process, or even a successor CEO search.

The vice chair position lends a level of credibility to these initiatives, which is important, while allowing your chair to keep his or her eye on the overall management of your board.

Assumption #3: The board secretary’s job is to take minutes. (That is, the secretary’s role is even more boring and inconsequential than the vice chair’s!)

This is perhaps my favorite board officer position to discuss. I always ask this very simple question: “What is the role of the board secretary?” And there are usually one of two answers given. The first is this: “To take the minutes.” And the second: “To edit and approve the minutes taken by the staff.”

Really? That’s it? Boring…

But no–that’s not it! For a little inspiration, we needn’t look far.

In the corporate sector, the board secretary has a very, very important role. He or she is, as enumerated by the Canadian Society of Corporate Secretaries, responsible for ensuring the integrity of the governance framework, the efficient administration of the company, compliance with statutory and regulatory requirements, and implementing decisions made by the board of directors.

There. How does that sound? Boring? I don’t think so. Now, that’s a job I’d like to have as a volunteer board member. It goes pretty far beyond taking minutes, doesn’t it?

Make no mistake. You are helping to lead an organization every bit as complicated or sophisticated as a corporation. While a credit union’s structure may be different from its for-profit competitors, the stakes are just as high. And some could argue that the complexities you face as a credit union—with members’ interests and a mission to balance—place even greater demands on your governance structure, policies and practices.

Consider your board secretary your board builder-in-chief (or, better yet—your chief governance officer), working hand in hand with your chair to build a stronger board. Your board secretary should be tasked with seeing that your board adheres to organizational policies, as well as national regulations.

He or she should also oversee board nominations and a robust onboarding process by chairing the credit union’s governance and nominations committee. And this committee, too, can be charged with working with the chair to build engaging board and committee meetings to effectively carry out the board’s work.

Assumption #4: You have to be a numbers person to be the treasurer.

At last we come to the source of the controversy that sparked this article. In my response to CUES Net, I suggested that it is the role of the contemporary credit union treasurer to help fellow board members effectively translate complex financial reports and data into comprehensible and insightful information that can effectively support strategic decision-making at the board level.

There was some concern raised that perhaps what I was suggesting was that board members (i.e., the treasurer) might have more experience in the financial realm than the credit union’s CFO.

I wasn’t. I was actually trying to make the opposite point.

If your credit union board is like most, it’s not made up of financial whizzes and MBAs. It’s made up of everyday people like you and me, representing the membership and, for whom their financial literacy and acumen may have been developed through their service on the credit union board.

And if they’re like me, perhaps their eyes glaze over when they see 26 Excel spreadsheets coming their way.

I see an effective treasurer working with the CFO and his or her staff—poring over those Excel spreadsheets—to ensure the board receives clearly discernible reports, dashboards, bar charts and graphs, all in an attempt to clarify and deliver the complex financial reports in a manner that everyone on your board can genuinely understand.

My colleague shared a story recently that made perfect sense to me. She said that the best treasurer she ever saw was a marketing guy. Yes, you read that correctly. A marketing guy. He didn’t want the job, but no one else would take it. He was the last guy standing. And what made him good at the job (indeed, great at the job) was that he didn’t fully understand the numbers at first, and he kept asking for clarification until he did. And, he was good at communications and visuals, so that was a plus. The joke around the boardroom was that if Jeff could understand the financial reports, anyone could.

And they were right. He had them “translated” into a form he could genuinely understand. This helped Jeff—and everyone else on his board!

How crystal clear are your financial reports? Can your new board members truly understand them? Or are you still presenting 26 Excel spreadsheets (in the form in which the staff tends to understand them) to your board members and expecting them to read them like a CPA?

Assumption #5: Everyone deserves a chance to be chair.

Don’t simply adopt an automatic ascension plan for the board member who “hasn’t had a chance to be the chair yet.” Many credit unions have a practically automatic process whereby directors begin as a regular board member, then become the secretary, then move to treasurer through to vice chair and right on up to chair.

Not everyone is cut out to be chair. Automatic ascension provides little to no wiggle room concerning needing a particular person to be chair because he or she has a particular skill set or capability; due to big changes being on the horizon for the CU; or because the board needs to focus in a new direction. Choose the right candidate for the right time, not simply because it’s his or her “turn.”

Assumption #6: You’ll know what to do when the time comes.

One of the most important leadership assumptions I can help you challenge is that you will know what to do when the time comes. This relates directly to the notion that you should always have in place a leadership succession plan—and I’m not talking about a CEO succession plan (although I think you should always have one of those in place, too!).

Your board and its officers are some of your most important strategic assets. Treat them accordingly. Plan ahead for changes in board leadership—both the kind that can be anticipated and those that cannot.

I’m not talking about drawing up a 10-page, detailed plan. I’m talking about outlining the basics, including: who will serve as board officers on an interim basis; what roles certain committee(s) will play; and how the credit union’s CEO may be impacted. Be sure any succession plans are in line with your credit union’s bylaws, which may provide some direction on these issues.

Above all, be open to even the idea of change. Here’s an example to explain what I mean.

I spent the better part of a recent training arguing the merits of having a board secretary play an increased role within the organization. Really? I could hardly believe it—here was someone before me, arguing against a more engaged, more robust role for a board officer. Arguing against a board volunteer filling a key need within the credit union. Why? Because the secretary was so busy reading and approving all of those meeting minutes? I hardly think so.

What’s the downside? I wondered. Imagine the upside …

Michael Daigneault, CCD, is CEO of Quantum Governance L3C, Vienna, Va., CUES’ strategic provider for governance services. Daigneault has more than 30 years of experience in the field of governance, management, strategy, planning and facilitation, and served as an Executive in Residence at CUES Governance Leadership Institute™. Quantum Governance fields more engagements in the credit union community than in any other, more than 40 percent of its total client projects.