Take Responsibility for Your Financial Literacy

Take Responsibility for Your Financial Literacy

(This post is also available in the March 2017 edition of the CUNA Directors’ Newsletter.)

Regulators hold volunteers accountable for understanding key measures and ratios that indicate a CU’s health.

Picture this scenario: 

It’s time for the annual exit interview with credit union regulators. You’ve been told they finished your regulatory exam and have requested the entire board’s presence. If this development hasn’t already alerted you to an issue, the six regulators awaiting you in the board room does.

You look around the board room and see anxiety in the CEO’s face, urgency in the regulators’ faces, and a bit of confusion and concern in your fellow directors’ faces.

Houston, we have a problem: Your credit union is losing money. Your net worth ratio is taking a plunge, and you’re losing assets. “And,” they say, “it’s your fault.”

A Book Review: Transformational Governance: How Boards Achieve Extraordinary Change. By Beth Gazley & Katha Kissman

Guest Post by Kevin Smith, Publisher, TEAM Resources

“If you truly want to understand something, try to change it.” Kurt Lewin, often referred to as the father of modern Social Psychology.

If you’re anything like me (and I assume that you are), then you have too many books piling up literally and virtually, too many articles saved, too many emails with links to information that you’re supposed to keep up with these days. Sometimes I feel like I’m drowning in it. So I shouldn’t have been surprised when I stumbled across Transformational Governance: How Boards Achieve Extraordinary Change by Beth Gazley and Katha Kissman a full year and a half after it came out. But I’m sure glad that I found it. (Full disclosure: I hired Katha Kissman to speak at a CUNA Volunteer event several
years ago. She’s cool, yo.)

The Governance Spectrum: Balance Between Too Strong & Too Weak

(From the forthcoming TEAM Resources publication: A Basic Credit Union Governance Guide for Credit Unions, by Tim Harrington and Kevin Smith)

In our experiences, there is a range of board member behavior, from too weak to too strong. This represents the Governance Spectrum. The left side of the spectrum represents boards that are too strong, too involved and not making the best use of their time. On the right are boards that are too weak. They have abdicated their responsibility and their authority. What you want to strive for is a balance of oversight and forward thinking. This is a tightrope to walk sometimes, looking for the Goldilocks moment where your actions are “just right.”

Governance Spectrum
Governance Spectrum

(Click the image above to download a copy of the Governance Spectrum for your own use.)

Mind the Gap: Communicating the Strategic Plan

We’re headlong into planning and budgeting season, and after reviewing a few plans, a couple of things have occurred to me about communicating the strategic plan.

mindthegap
Communicating the Strategic Plan

Have you ever noticed that no one ever has a new strategic planning document that simply says, “Just keep doing what we’re doing. Things are going great”? And rightly so, I guess. I mean, you don’t hold planning sessions to envision what you’re already doing. But too often credit unions get caught up in the concept of the planning session and the idea that this is the one place where we come up with new, different, and forward thinking. We all want to be innovative and feel like visionaries. And no doubt our industry is dealing with dramatic change and an environment that often feels like quicksand shifting beneath our feet.

My point is that there are often a couple of large gaps between the plan and the people that derail the process.

Board Leadership: Preparing the Chair

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In a recent survey of nonprofits, 51% of board chairs said they “did nothing specific to prepare” for the role of chair. That’s a pretty staggering number. The survey “Voices of Board Chairs” from the Alliance for Nonprofit Management reported on the experience of 635 nonprofit board chairs from across the United States. throneOf course, this survey isn’t specific to credit union boards and chairs, but we fit in the nonprofit area. And the results of this report align with what I see anecdotally across the credit union industry.

What About Us?! Supervisory Committees: The Stepchildren of the Credit Union World

Guest Post: Kevin Smith, Publisher/Consultant, TEAM Resources

Supervisory Committees & Training
Supervisory Committee & Training

There’s no lack of training opportunities for credit union volunteers, from the exotic to the pragmatic. But if you look carefully at the training, you’ll see that it’s generally not as inclusive as the word “volunteer” is supposed to imply. (Volunteer = directors, ALCO members, credit committee members, supervisory committees, etc.) Those training options are almost always designed for board members/directors. And don’t get me wrong; I don’t begrudge them the opportunities, even in the nice locations, so long as there’s good training on hand, not just sightseeing.

Governance & Mergers … or Mergers & Governance

shhh image
Shhh

D’oh! I just said the “M” word. Shhhhhh! We don’t want to talk about that. The leadership in the credit union movement treats merger talk as verboten. You don’t see much on conference agendas, or on webinars. And I get it – talking about it might come across as endorsing it, and there’s a school of thought that says that more credit unions are better for the industry.

Well…it’s no secret that there are a LOT of credit union mergers. According to the NCUA, there were 234 mergers in 2015, which actually represents a slow down of late.

The Role of the Board Chair

The Role of the Board Chair

Recently I had the chance to spend some time with a great group of board members at that National Association of Credit Union Chairmen (NACUC) – Leadership Development Seminar. One of the things we talked about was the role of the board chair. I thought this well worth putting down on *paper* as it were.

The role of the chairperson is multi-faceted, complex, and often changing within the context of the organization’s dynamic. Unfortunately, there’s no perfect set of “rules.” But there are some guidelines. Here are our “tips” on navigating the position successfully:

Board Chair
Board Chair

Roles:

Facilitator – The board chair must draw together the individual directors into a team, working together on behalf of the membership and the credit union. To do that, s/he must wrangle individual personalities, draw out conversation from some, and rein it in from others. Having a solid understanding of the personalities of each director … and the CEO helps the chair keep things on track, moving forward, and civil.

Leader – Wait! Isn’t being a leader at odds with being a facilitator? Isn’t this a contradiction? No. There are times when the job is pure facilitation and times when it is leadership and setting direction. A skilled leader will know which is which and be able to handle both without perceptions of contradiction.

How to Make the CEOs Job More Difficult Than It Has to Be

Guest Post by TEAM Resources Publisher, Kevin Smith

Nobody disputes the fact that credit union CEOs have tough jobs. There are millions things to keep up with in a challenging environment; technologies, economics, regulations, leadership, staff issues and development … oh yea and “managing” a board of directors made up of volunteers who Untitled(generally) don’t have backgrounds in financials institutions. The not-for-profit, cooperative model with a volunteer board of directors is part of what makes credit unions so very awesome, right?

So, why do so many CEOs make their own jobs more difficult when it comes to the board?

“Just what am I getting at?” you ask. Well, I’ll tell you, and thanks for asking.

Two Areas to Evaluate Before Nominating a Board Member for Reelection

(Incumbent, Schmincubment! Show me your worth!)

by Tim Harrington

“Sadly, boards are more likely to replace a CEO than oust one of its troublesome board members.” Beverly Behan, Public Companies Board Consultant

Let’s let that quote sink in for a minute. With too much frequency incumbent board members are up for re-election in (often) uncontested elections, despite the fact that the board member may be lacking in skills, harboring a grudge that is toxic to the boardroom, or he/she has for whatever reason become the Achilles heel of the board and the organization.

Kicked outWhy is that?

Often it’s out of simply conflict avoidance. But “politeness” is not a good reason to undermine the effectiveness of an organization. Remember – directors have duties of care, loyalty and obedience for the best interests of the credit union. This sometimes requires difficult conversations and confronting issues head on.

But that doesn’t mean it’s easy.