Last month I spoke at the CUES Executive Summit in Colorado Springs. This conference was attended by some of the most dedicated and intelligent directors and senior leaders we have met in the credit union world. I’d like to share with you some of the valuable content delivered, as well as some of the important questions that people were asking.

Revisit the mission of your credit union
All future decisions within your credit union should start with your mission. What is the purpose of your credit union? Why are you on the board? What are your beliefs? This exercise in thinking is not just about words. The mission of your credit union will affect all future decisions, including your strategies for the future, your talent decisions and the people you recruit to your board. We need to recruit the best brains in both our management teams and boards who will stimulate important conversations and ask the right questions.

What does it mean to be a good board member?
Asking the right questions, being engaged, listening to members, ensuring that the right data is being collected and assessed, preparing for meetings, approving policies and ensuring that your actions reflect the mission statement of your credit union are all important. Are you getting the right quarterly data and does your board have a dashboard that can track progress on all key strategic drivers? Are you heads up on current trends in governance and regulation, such as the “Whistleblower” regulation in Dodd Frank and what implications will eventually trickle down to credit unions. Credit unions are not immune to national policies that are focused on banks for today. These new regulations may be coming to your neighborhood in the near future. Most importantly, are you executing independent business judgment?

What are the jobs of the credit union director?
Most directors can answer this question with the following response: plan, direct, control the credit union, protect the member and oversee management. However, our point of view is a little more focused on the two main roles of directors of publicly traded companies: Validate Strategy and Validate Succession Planning. These two weighty jobs require both courage and engagement.

  • Validate Strategy – There are no 10-year plans anymore. Providing oversight for continuous two-year planning cycles is the job of the board. Understanding member satisfaction and monitoring financial metrics is the oversight that is needed to ensure the safety and soundness of your credit union.
  • Validate Succession Planning – Contingency planning is a must. Taking an inward look at your credit union and board’s succession plan can be challenging, but essential to your job as a director. These are healthy conversations that require courage and delicacy. Do you have people who represent the voice of your members on your board? Do you have directors who understand technology? When evaluating candidates, do you establish board criteria based upon where your credit union will be in five years and what skills will be required then? Succession planning also includes a review of committee charters, and setting criteria for service as well as training for board members. One meeting per month may not be enough anymore to fulfill the fiduciary duties of serving as a board member. We predict that as board service for public companies has become more time consuming, so will serving as a credit union board member – despite your volunteer status. Setting criteria for attendance, so that people show up regularly and are engaged, will ensure the best possible minds being brought to the boardroom.

Duty of Loyalty Assessment
Duty of loyalty involves asking the right questions. If need be, you can bring in independent consultants to assist in this process. Do you review your ethics policies on an annual basis? Are you providing special loans to children of board members? Are there things you see that don’t feel right? Reviewing your Ethics Policy annually can wash out these issues. Dealing with these often sensitive decisions, can prevent future NCUA actions.

Board Assessments and On boarding Process for New Directors
Board assessments do not have to be punitive or personal. When you ask questions like, do you receive your board materials in a timely fashion, how are your conversations at the board level – they do not single out individuals. They provide an important context for improvement in board processes and effectiveness. Qualitative comments may reveal anecdotal comments such as John Doe falls asleep at meetings. However, with a skilled independent person administering the survey, comments can be vetted and individual conversations can take place afterwards to allow for improvement and dignity.

The board assessment process should be driven by the Governance Committee. This committee can also focus on the education and training of younger board members — and the establishment of board mentors. With increased regulation and increased personal liability, if 30% of your board is an underperforming asset class, or if two or three people are carrying the other ten people on your board, creating a process to address this is an important role of the Governance Committee. Beginning this discussion process and then having an independent third party present it, can be extremely helpful. Often an additional Emeritus Status can be created on the board. When a young person comes on the board, do you set criteria and standards to ensure that they truly understand what Duty of Care really means. Do you provide training for them so that they can come up to speed within a one-year learning period and be held accountable to standards established?

I ended my presentation by encouraging participants to continue to learn. And most importantly, board members and CEOs have an important obligation to share this learning within their organizations, boards and senior leadership teams to develop creative and innovative strategies to meet the current global technological, demographic and regulatory transformations taking place at a rapid pace.

Stuart R. Levine is Chairman and CEO of Stuart Levine & Associates LLC, a strategy, leadership and governance consulting firm. For more information, please call 516-465-0800 or visit