Risk management can be tough. By Lisa Hochgraf
I serve on the leadership team (basically, the board) of my church, and I wish I'd had the foresight to stop (or divert) the train of risk that was heading toward a recent fundraiser. My inability to focus on the speeding train once it was rolling, or to get traction on suggesting a shift, was part of why we nearly suffered a loss on the event. What happened, exactly? We hired a local barbecue restaurant to cook at our terrific location--alongside a major U.S. highway through the beautiful upstate New York countryside in September. But to get them on site, we had to guarantee 250 dinners. While we figured that would be pretty easy at such a high traffic location, our team still discussed the risk--if we guaranteed the 250 and it rained, we might owe for some dinners we couldn't sell. Four days before the event I had to confirm our number with the barbecue restaurant. With rain in the forecast, I could have asked the leadership team to think about another available option we hadn't even really considered: Buy a lesser number of dinners and pick them up to sell at the event. This would limit our profit potential if the weather turned out to be fine, but also cut our potential for losses if it poured. It poured. We didn't take a big financial hit because we also had a fantastic music program going on inside a cozy, dry barn nearby, and the sale of tickets for that offset what we didn't sell in chicken dinners. But what if I had stopped (or diverted) the train? Our financial picture would have been much better. It's tricky leading as a volunteer. While I love being on the church board and feel I can contribute a lot, my full-time focus is my work and my family. So too, with credit union volunteers--only the financial stakes CU directors encounter are much, much higher. All this makes me wonder, what tools do you have to help your credit union's directors determine when it's time to pause, wave their arms in the air and start a conversation about changing direction? And, how do you create a board culture that makes it safe to do so? I hope you post some thoughts in the comments. I could use them.
Lisa Hochgraf is a CUES editor.
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