Monday, January 12, 2009

Is your Board Bored?

In the age of social networking, dynamic web interactions, and transparent business practices credit unions have one thing that can lift them above the rest. Something that should be just as dynamic as the credit union's interaction with its members, and just as important.

What is it?

It's board of directors.

The purpose of the board of directors is to represent the membership's interests. The board is (ideally) made up of people from within the credit union's membership, voted in by the membership, and that represent that membership's needs and wants.

Unfortunately, many credit unions have let the importance of a representative board of directors slide into apathy.

Today, board leadership and its role in the operation of a credit union need to be more apparent and clear to our membership than ever before. Members need to know who is on their board, what they stand for, and they need to be aware that they can apply to be on, and vote on who is on, the board.

What better way to differentiate yourself from the profit driven, stockholder-pleasing banks than to make your members aware of, and encourage their participation with, your board of directors.

How are you getting the word out and encouraging your members to be involved with your board?


Matt, the Credit Union Warrior said...

Touchy subject for sure. Why touchy? Well, for me it's partly because you are exactly right. Bored Boards do not inspire executives, do not encourage innovation, and aren't doing their positions justice.

But they do volunteer their time. They do get elected by membership. And, often, they have dedicated decades of service to the movement.

So, on one hand you want to inject some life into the democratic process, and on the other you want to respect the volunteer service of the existing board. The harder I push for member involvement in the process, the more it looks like I'm trying to get rid of an existing Board member. That's not a wise career move.

To me, the solution may be term limits. That said, I don't know of many credit unions who have members kicking down the doors for a chance to serve on the Board. Though this may present a challenge, it does help justify marketing this as an opportunity for member opposed to a way to oust a sitting board member.

Caleb Chang said...

I think this very thing is something that many credit unions neglect. As your mentioned an elected board is a CU's differentiation and should definitely have some more weight.

Here's a silly thought. Why not have potential board members make themselves available on Twitter or have a fun campaign/election process like Young & Free? If done properly, at the very least, it would be more engaging.

p.s. Good use of a homophone, Andy.

Jimmy Marks said...

What I wonder is this: do members want that degree of transparency? Especially since more banking is being done remotely.

You now have the member who (potentially) may never set foot in a branch. They apply online, deposit online or through direct deposit, monitor online or by phone, withdraw at ATMs and use PFM sites to figure out how to manage their money. Are members so concerned about the output/outgoing nature of their board?

Maybe I'm cynical. I know some of the folks on the board at my CU, and they're swell people, but I usually assume most people don't care about that relationship.

Andy said...


It's definitely a touch subject. Just to be clear, I would never push to get rid of a board member just to get rid of an existing board member.

I feel like credit unions need to make their membership more aware of the board, what they do, where they stand. I think we owe that to our members.

If that leads some of them to apply for an open board seat, and they're voted in over a long time board member, so be it.

If it leads only to a more aware membership, one that might be more willing to voice opinions to the existing board, so be it.

I don't think there's a perfect answer, whatever works to get the members' voices heard by the board, and the board's voices back to the members. If that brings some members to the table that would like to run for the board, all the better.


Have you heard about the "One Member, One Vote" campaign?
The site looks like its in a hibernation of sorts right now, but when it launched (David Inverarity showed it to us at BCBNE last year)they had interviews with each person running for the board about issues that face the credit union. The members could then vote. I can't remember if the ballot was fully online, or if they had to mail it.

Anyway, cool stuff.

@Jimmy Marks

I think You're right that a good section of membership wouldn't care, no matter what you did. There is a group that doesn't want that transparency. They want money to go in, money to come out, and their statement to balance at the end of the month.

I don't think that has much to do with remote banking. The people that care, will care, and those that do not, will not, regardless of their banking channel.

I also believe that there are people that do care, and people that would care, but don't know. You're never going to have your membership all running for the board at once, which is a good thing. Heck, you'll never have your entire membership, or a majority, even talking to your board of directors at all. But, its the people that do want to talk, the ones that do care, and the few that would be willing to step up and volunteer that we should be trying to reach. They are the ones that will talk to you about what they want/need and, if you meet those wants/needs, the ones that will talk to their friends and family about their credit union.

Anonymous said...

I agree with the idea of getting the word out to members about board postions, and trying to encourage qualified canditates to appyly for those spots.

But, I may say that the proposal of ideas comes primarily from the CEO and/or the EVP. They are responsible for presenting ideas to the board and then discussing the posibilities of those ideas with them. It is then ultimately up to the board of Directors whether or not to approve funding for any projects that are approved.

The boards primary responsibility to ensure the credit union is being run in a sound and secure manner. Although they may have ideas that are presented at board meetings they rely very heavily upon senior management to verify weather or not those ideas are justifiable in terms of cost and return.

Credits unions that lack ideas may lack an enthusiastic management team. After all it is the managers that need to inspire the bored board; not the other way around.

Matt, the Credit Union Warrior said...

@anonymous That's a chicken/egg argument. While I agree that CU management needs to inspire the bored board, the relationship between boards and the CEO requires that inspiration is a two-way street. If management, led by the CEO, is not getting the job done, it is the board's responsibility (the CEO's "boss") to make sure that trend is reversed. Likewise, the CEO is responsible for making sure the right talent has been assembled to get the job done. Thus, both the Board AND management are responsible for preventing Board boredom.

Thankfully, my credit union has an engaged management team AND an engaged Board. I hope that's the case for most CU's.

Anonymous said...

We do a strategic planning every year with all the board members and all of the staff. It is conducted by some at the league level. But it is amazing the ideas that come out of that one annual session from all around. We all agree on what ideas are feesible and the use the rest of the year to acheive them. Its great!