By Ray Birch
MADISON, Wis.—Credit union boards are tasked with a vital mission: to govern the institution in service of its members. But according to governance expert Dr. Amy Hillman, many boards may be neglecting an equally important responsibility—governing themselves.
“Most credit union boards are filled with incredibly well-intentioned people who care deeply about their members and communities,” said Hillman, a professor and seasoned board governance authority. “But the question too few are asking is, Are we holding ourselves to the same standards of oversight and accountability that we expect of our management teams?”
Hillman’s message comes at a critical time for the credit union movement. As the financial services landscape rapidly evolves, the ability of credit union boards to adapt, innovate, and lead with foresight depends increasingly on how well they understand their own strengths—and their blind spots.
A Missing Mirror
"Governance of the credit union is the board’s first duty," said Hillman, a professor at Arizona State University. “But self-governance is an integral part of that."
Hillman, who recently authored a Filene research brief titled “Credit Union Boards, Govern Thyself,” warned that without structured self-evaluation, boards risk becoming stagnant, overly comfortable, or resistant to needed change.
What makes board self-governance so difficult? Partly, Hillman said, it's because there’s no one else to ask the hard questions.
“There’s really no one who’s going to say, ‘Are we governing ourselves well?’ if it’s not the board chair and the board itself. They sit at the very top of the organization—so if they aren’t self-reflective, important housecleaning can go undone,” she explained.
The Cost Of Complacency
Hillman emphasized that the time to address board performance isn’t when cracks begin to show, but before issues emerge.
“When governance is going well, it’s easy to forget to evaluate your own effectiveness,” she said. “It’s only when something breaks down that the importance of those preventative steps becomes painfully clear. And by then, in some cases, it’s too late.”
While she stopped short of saying most boards are neglecting their duties, Hillman cited compelling data: Only about 25% of credit unions have board term limits, and only 26% conduct annual evaluations of their board’s skills and effectiveness, based on a survey conducted about 18 months ago.
“This isn’t about catching boards doing things wrong,” she added. “It’s about asking: Can we do better?”
The Building Blocks Of Better Governance
So, what does good board self-governance look like?
Hillman described several practices that high-performing boards tend to adopt:
- Strategic Alignment: Asking, What competencies, experiences, and member perspectives do we need on our board to meet the credit union’s future goals?
- Skills Matrix & Self-Assessment: Developing a matrix of desired board attributes and having each director assess themselves annually—identifying areas for growth and setting personal development goals.
- Director Development: Investing in education and training so that board members continue to grow, bringing more to the table each year.
- Term Limits: Instituting structured term limits to ensure fresh perspectives. “Research shows board member performance peaks around seven to eight years,” Hillman noted. “Without term limits, it becomes psychologically harder to challenge past decisions, which can lead to resistance to change.”
A Culture Shift
Hillman acknowledged that board self-governance often feels like a luxury—something that falls low on the agenda amid pressing financial and operational concerns. But she argued it should be viewed as a core duty, not an afterthought.
“Being strategic partners to the credit union means investing the same rigor in your board that you would expect from your executive team,” she said.
While no exact figures exist on how many credit unions truly excel at governing themselves, Hillman’s aim is not to criticize, but to spark introspection.
“Most boards are governing their credit unions with care and commitment,” she said. “But self-governance? That’s where the opportunity lies.”