According to Les Wallace, Ph.D., president of Signature Resources, Inc. and facilitator of CUES’ 2014 Board Chair Development Seminar, any board can be a high-performing, strategic force. He offers these touchstones you can use as a starting point to gauge your board’s current effectiveness.
The basics: Wallace suggests you cover the basics first, and make sure your house is in order.
- Your CU’s financial health should be stable, with ample operating reserve.
- Your strategic plan should provide compass points for future transformation and impact.
- Your bylaws, policies, and procedures should be reviewed on a two- to three-year cycle.
- The board’s makeup should mirror the geographic and demographic footprint of your credit union.
Competent boards share these traits, according to Wallace:
- They have board job descriptions that identify required leadership competencies; they use nominations, interviews, and screening to confirm a potential member’s qualifications.
- They understand limits on service are healthy, and have no emeritus status board members.
- They have a governance leadership succession program in place, developing future leaders one to three years out.
- They remove for cause members who fail the board—who aren’t involved, or who have attendance or conduct issues. Bylaws back these expectations up.
Strategic boards embrace these qualities:
- The strategic plan in place looks three to five years out, and is refreshed annually.
- When it comes to meeting agendas, strategy is king. Discussions consist of approximately 15 percent fiduciary, 15 percent regulatory, and 50 percent to 70 percent strategic topics.
- They consider inclusive input from constituent leaders on the strategic plan—including past board members, focus groups of customers by segment, community leaders and board chairs in their market area—and external subject matter experts.
Once a year, Wallace recommended, boards should conduct a member feedback survey, asking what they can do to add more value. “It doesn’t even need to be statistically significant,” he said. “You need discovery, and that’s what these are good for.”
Wallace also suggested hiring a board coach, and going through a formal self-assessment process. Coaching frequency ranges among boards—some only meet with their coach every two years or so, while others have a coach available anytime to run things past as they come up. “You just have to see what works best for your board,” said Wallace.
Leisa Goodman is a CUES marketing specialist.
Apply it to your Board Room:
- Is your board missing any of Wallace’s “basics”? How could you remedy this?
- Would you rate your board as competent or strategic, according to Wallace’s descriptions?
- How does your board currently evaluate its performance? How regularly do you do this?
You may also be interested in reading, “Rate Your Board: How Well Does it Perform?” from the CUES Skybox blog.
To learn more about governance best practices, attend CUES Director Development Seminar, slated for Sept. 17-19, 2014 in Williamsburg, Va.