By Michael G. Daigneault and Jennie Boden
The State of Credit Union Governance, 2018 published by CUES and Quantum Governance provides five recommendations based on the data from a five-year survey of credit union leaders. Apply them at your credit union to strengthen your governance policies and practices:
- Prioritize governance excellence at your credit union. If you haven’t been taking governance seriously at your credit union, it’s time to do so. And if you have been, it’s time to kick it up a notch. Whether you’re functioning at Governance 101 or 601, it’s time to find out what Governance 201 or 701 looks like for your credit union.
- Eliminate any perception gaps between your board, supervisory committee and senior staff. If we know one thing, it’s this: Gaps between the board and senior staff will eventually be destructive. We highly recommend a strong, constructive partnership between the board, supervisory committee and the senior staff—all working collectively to govern and lead the credit union. There were so many gaps in perceptions between these positions throughout the report that it surprised even us, and it should definitely concern you.
- Ensure you have a plan for board (and committee) rejuvenation. The longer a board member serves, the more positive his or her perception is. While this may sound like a positive finding, it actually concerns us. Are long-serving board members losing their ability to ask the hard questions? At the same time, the number of potential board members among us—if we look strictly at the census numbers—is shrinking. Ensure that your credit union has a viable plan for leadership continuity. It is one of the most critical responsibilities a board holds.
- Focus on your credit union’s leadership culture. While you may be spending countless hours ensuring that your board members have the requisite training, your committee structure is in place and operating well, and your plan for board rejuvenation is fully up-to-date, don’t forget about building a positive board culture. It takes time and conscious cultivation to ensure a positive outcome here.
- Charter a governance and nominations committee … fast. Over the years, nominations committees have morphed–first into board development committees and now into what is considered governance and nominations committees. If your credit union doesn’t have one, it’s behind the curve, and you need to get one. Fast. Today’s governance and nominations committee is chartered to address board roles and responsibilities, composition, knowledge and learning, and effectiveness and leadership. We believe this recommendation is so important that a sample governance and nominations committee charter is an appendix to the report.
Michael Daigneault, CCD, is founder and CEO of Quantum Governance L3C (www.quantumgovernance.net), Vienna, Va. Jennie Boden serves as the firm’s managing director of strategic relationships and a senior consultant. She has 25 years of experience in the national nonprofit sector and served as the chief staff officer for two nonprofits before coming to Quantum Governance.