Cultivate the CEO/Chair Partnership

By Kelly Schmit The relationship between a credit union CEO and its board chairperson is too important to be left to chance. With proper care and nurturing, this vital partnership can be strengthened to help the organization reach its full potential now and into the future. Les Wallace, Ph.D., president of Signature Resources, Inc., is a noted consultant in the areas of leadership, governance, management and personal success. He believes, “The #1 responsibility of a board of directors is to help the CEO be as successful as possible.” To that end, he recommends improvement in three key areas:

1. Business communications. Many CEOs and board chairs have friendly or social relationships that extend beyond the credit union, which can blur lines of communication. “CEOs don’t like getting informal feedback and suggestions on the golf course or over a drink. They would prefer dealing with business in a business setting,” Wallace has observed.  He recommends the book Crucial Conversations as an excellent resource for improving interactions.
2. CEO formal assessment process. Wallace is surprised at the number of organizations that do not provide formal annual feedback to their CEO. He recommends taking the evaluation process a step further to also provide a half-year assessment. This is a standard at high performing organizations to make sure expectations for the year are being met while there is time to fine-tune their tactics as needed.
3. Board self assessment. To make sure they are providing good support to the CEO, the board should be evaluating itself periodically. One element is making sure the board is focused on strategy, rather than getting bogged down in operations. Credit unions have plenty of managers to oversee day-to-day functions; the board and top executives alone are responsible for strategy and vision.

What’s next on the governance horizon? Many industries are starting to explore the issue of term limits and age limits for board members. Board governance experts feel it is simply not a best practice to have the same chair and board members for decades. “Refreshing the board,” as Wallace refers to it, will position a credit union for its next generation of challenges and opportunities. He suggests credit unions profile the boards they will need in five years to meet the challenges ahead, and start realigning now to secure their legacy. Kelly Schmit is a marketing coordinator at CUES. The CEO-board relationship and governance will be key topics of discussion during CUES Symposium 2016: A CEO/Chairman Exchange, slated for Jan. 31-Feb. 4 in Maui, Hawaii. CEOs and board chairs must attend this event together.