Bullying in the Boardroom


Bullying in the Boardroom

Bullying in the Boardroom

Bullying in the boardroom can take a variety of forms, but none of them are acceptable. Yet in an environment where no one is the “boss” it can be difficult to control this behavior. Directors have a variety of tools to use to counter the bully including written policy and parliamentary procedures, among others. Often it requires many simultaneous approaches. But one thing is certain – bullying cannot be tolerated.


By Kevin Smith

I’m finding that my blog posts are feeling more and more negative these days. Just look at today’s title. It’s a bit depressing. However (comma) my desire in this space is to provide help based on a wide range of boards I’ve observed, interacted with and heard from. So, I suppose it’s not actually a benefit for me to simply provide pep talks, and rah-rah speeches here, though I will work on a post that does share all of the great things I see as well.

Now – on to the topic. Bullying in the boardroom.                         

Forms of Bullying

Bullying can take on many forms. Intimidation. Interrupting. Condescending talk. Demeaning jokes at a colleague’s expense, in front of a group or behind their backs. Withholding critical information. Harassment. Side talk. Snide body language. Social isolation (not including someone). There are probably endless examples well beyond what I’ve provided. As a matter of fact, I’d like you to add to my list. Please add the examples that you’ve seen. It’s not only cathartic, but it may help someone else reading this to see and perhaps realize that they are dealing with a bully. (It’s not always black and white.)

No Simple Answers

Movies and TV will have you believe that simply standing up to the bully will cause him or her to back down. This may be true some of the time, but I’ve been witness to times when it doesn’t. Rarely do you get a storybook ending where Prince Humperdink (the bully) gets put in his place with a raised voice and a threat of retribution. It’s usually more complicated than that.

The Outsized Impact of Bullying on Women

The Impact of Bullying on Women

The Effects of Bullying

One thing is for sure, bullies of all kinds and all sorts are detrimental and must be stopped.


  • Shut down discussion that doesn’t go their way
  • Intimidate people from providing perspective
  • Affect the tone and culture of the group
  • Make it difficult to recruit new members
  • Make trust impossible
  • Create an environment where staff have reason to hide things.

Bullies do this and more and worse.

How to Counter a Bully in the Boardroom

You probably know and understand how unique the boardroom dynamic is. Directors are at the top of the hierarchy for the organizations, but there is no hierarchy among the board members. They are equals. This complicates the dynamic. And when someone uses intimidation any bullying tactics, the remedy lies with solely with the peers in the room. It can be extremely difficult to stand up to this behavior. Most of us don’t exhibit these traits and aren’t comfortable using them or leaning into the confrontation and conflict needed to stop it. So, what to do about it?

Written Policy as a Tool

The strategic governance approach that we take here at TEAM Resources relies heavily on written policy in order to establish the clear tone and approach of all things that the board will do. This doesn’t just mean about liquidity targets and ALM investment limitations. This is also policy about how the board behaves and approaches its work. This plays out in things like what the ongoing education for each board member will be, and in how the board will speak with one voice, where no individual director will have any authority over the CEO or staff.

Now, it might be hard to write, “there’s no bullying in the boardroom.” But you can write about the expected tone of respect for all involved people in the organization. It’s an area that everyone thinks ought not need to be said … until it is. By starting at a very foundational level and saying what people generally presume, the board establishes basic ground rules in writing. And when it’s time to put this in writing, the board as a whole has to discuss this and agree upon the terms and terminology. You verbalize what generally goes unsaid and presumed. And ultimately, you have a vote on accepting the policy. Now you have a foundation for when someone is not following the policy. The board then has an agreed upon document. This prevents the need for one, sole courageous sole needing the speak up alone.

(Most of the time when I talk to directors one-on-one about confronting a bully, they tell me that others on the board will discreetly tell them that they agree. This can be frustrating when you want everyone to speak up. Try to be patient. At very least, you are building a coalition against the bad behavior. Standing up to a bully is difficult.)

Majority Rule and Voting as a Tool

But when ratifying policy is not the only time that boards vote. The quorum or the majority works in your favor when countering the bully. Using the voices of the majority when a motion is called can outweigh the bully, particularly when you already know that others on the board are struggling with the problem behavior. Calling for a motion and a vote, if well prepared and knowing the temperature of the room can make the problem more clear. It can call out the elephant in the room.

This approach may need some preparation and planning. The worst thing that can happen is a motion and a vote that comes as a surprise, from out of nowhere. For those who do not like conflict, being put on the spot like this may make them abstain and stay quiet. But when handled thoughtfully, this approach can bring forth a strong, unified front against the bully’s behavior. It may be enough to be a wakeup call, or to make the bully realize that the intimidation won’t work against a group.

Good ‘Ol Roberts Rules of Order

I’m not a fan of Roberts and his rules, in general. They can be archaic and stifling. But parliamentary procedure can be a helpful approach when struggling with a bully. This is best wielded by a confident board chair. These procedures can help to reel in an unruly board member.

Holding Yourself Accountable

It’s very ironic and counterintuitive, but holding yourself accountable is a great tool for countering bullying in the boardroom. By actively asking for constructive criticism, and feedback about your work and behavior is a modeling the behavior that you value. You are setting the example that you have a growth and a learning mindset, that you don’t think you are perfect and that you expect to grow. This approach also verbalizes attitudes for the whole room that often go unsaid, or are whispered in the hallways. Doing this invites and encourages feedback. This can be contagious when encouraged. And again, it makes explicit the expected tone. Now, I’m not suggesting that when you do this the bully will jump right in and ask for feedback. But you are starting a process for buy in on this approach. I could write an entire section on board self-assessments. These too can be helpful, but only if people are willing to vocalize their objections to bullying behavior, which is often the sticking point. If you know TEAM Resources you know we are big proponents of board self-evaluations. The process of accountability is very much related. 

Few Bullies Think They’re Bullies

I have heard of a few occasions where a bully was self-proclaimed as such. But that’s pretty rare. Generally speaking, people don’t think they’re a bully. They may need to have that pointed out to them. That’s rarely easy. I’m not suggesting that anything I’ve proposed above will be simple. It’s just not. And that’s often the reason why the offender gets away with it for so long. But I do know that what I’ve laid out has worked. These are approaches that band people together for a unified voice. You may get through to a person and be the catalyst for positive change. (We can hope, can’t we?) You may be able to back a bully down by neutralizing their tactics through boring procedure. You may be able to force them to see that they are outnumbered and that it’s time to go.

Engagement on the Board (and Committees)

Board Engagement

We can do hard things.

When there’s no boss in a group of peers, and there’s no paycheck tied to performance, how do you maintain engagement on the board (and committees)? Peer directors must hold each other accountable for the work that they do. But the real key is making sure that the work is meaningful and participants understand the impact they are having on the organization to fuel excitement.

By Kevin Smith

It hasn’t come up in a while, but recently at a board training engagement, I heard an old question. “Why do we use the term ‘volunteers’? Doesn’t that make this sound less important?” I’ve been through this debate a hundred times with people trying to name products and services for this audience. If you only say “board” it leaves out the supervisory and other committee members. So “volunteer” is the catch all term. But doesn’t this feel a bit like we’re filling boxes at the food pantry, or building houses with Habitat for Humanity? This is by no means any disparagement to this kind of work. It’s valuable and fulfilling work. But it really is a different kind of volunteering. Food pantry volunteering doesn’t have an oath and legal fiduciary duties.

What does it mean to be a "volunteer" at a credit union?

Sidebar: Unpacking the word “volunteer.”

And why am I bringing this up? Well, I’ve been approached several times recently to talk about how to get unengaged directors and committee members to step up their games. I’m hearing about volunteers that are not coming prepared, not being fully engaged, and worse.

So, what to do? After all, doubling the pay doesn’t have much kick. And there’s not really a boss. (No, the board chair has no more authority than any director.) You can, of course, remove a director, or ask him or her to step down. But let’s be honest, very few want to go this route. This requires a board vote that can be awkward.

There are rarely quick fixes. Here’s what we recommend you try:

Outline the expectations for the position in writing.

Make sure there are clear repercussions for not being engaged. This is a cultural issue. When the expectations are clear and written down it’s easier to hold each other accountable. And this doesn’t have to be confrontational or in front of the group. It’s usually up to the board chair to take on difficult conversations, but it doesn’t have to be. Have this discussion one on one. Empathize with the person. Find out if there are circumstances that are causing the disengagement and how the board can assist. But ask about and confront the situation from a place of caring. This helps to avoid anyone becoming defensive and angry.

Utilize board self-evaluations.

Self-evaluations set a tone that the board should always be improving, learning, and that you need to hold each other accountable. Set ground rules for this process: it’s not a “gotcha” session; the focus is improvement; and in general, when one or more directors says that they want to hear how they can improve, others will follow suit.

Be active and vocal about creating the right culture in the board room. 

The culture of a group will be absorbed by the participants. Don’t take anything for granted, and don’t let this be a passive element. Put it on the agenda and talk about it.


  1. You may get what you tolerate.
  2. You have to have hard conversations sometimes. Keep it framed as the good of the credit union and the membership.
  3. The regulators are going to see this and it can be a problem for the credit union.
  4. Recruiting new directors should have a high bar with clearly written expectations. (And sitting directors must be living up to those expectations. No lip service!)

Unengaged volunteers are why the subjects of term limits and paying credit union directors comes up. These are two roundabout attempts at a solution for this problem. Both of these approaches can be problematic and very divisive. Create the culture that you want. It will not happen overnight, but the sooner you start, the sooner you’ll get there.

Aligning your Purpose

Keep Purpose Constant

Remember the little guy!

Organizations driven by a clear purpose enjoy many benefits over those that don’t. Credit unions have this kind of purpose baked into our DNA but often it’s not clear enough, or it doesn’t reach everyone. Aligning towards the purpose of changing people’s lives through is a powerful engine that can move mountains.

By Kevin Smith

Last week I got to do one of my all-time favorite activities. A credit union invited me in to kick off their strategic planning process by talking about purpose. I love talking about this. Tim and I have been talking about organizational purpose for years in our own planning sessions. And we’ve seen dramatic changes when an organization embraces this approach.

It’s all too easy for credit unions to think about their “purpose” in very corporate terms. We take deposits, make loans and help people with their money. (*buzzer sound*) Thanks for playing but that’s not the correct answer (IMHO). A purpose-driven organization is one that has a mission beyond making a profit. It’s a beacon guiding people in all of their decisions and motivating their actions. A clear and worthwhile purpose inspires people giving meaning to their work and lives.

Shoes, Socks and Purpose

Now, this might be a bit harder if you’re selling shoes and socks, but look at Toms and Bombas. They figured it out. But we’re credit union people. This is baked into our DNA, in our history. Too often it gets lost in the day-to-day, in the bank-like nature of how we compete these days. It’s there though, bubbling underneath. It’s time to let it out to do its magic!

The “Good Old Days” and our DNA

Over the course of my years working with credit unions, I’ve had the pleasure of hearing hundreds of stories about the “good old days” of credit unions: children delivering deposits or loan payments to credit unions open on Saturdays at a kitchen table. Some run from converted broom closets on the factory floor. And these credit unions started because a group of people got together to help one another when they couldn’t get a loan elsewhere. This is our driving purpose: to change lives for the better. Doesn’t that sound better than “taking deposits and making loans”?


Leading with purpose has many benefits.

  • Higher staff engagement
  • Lower turnover
  • Better recruiting
  • Higher organizational performance
  • Among others

And get this, research conducted during the pandemic indicated that those living their purpose at work reported:

  • Five times (5X!) higher levels of well-being
  • Being four times as likely to report higher engagement levels
  • 2 ½ times as likely to be free of dementia
  • 52% less likely to have experienced a stroke.

It has health benefits to boot!

Leading with a purpose that is higher than profit drives engagement. You have to pay people enough, for sure. But pay raises aren’t enough to drive engagement and give meaning to their lives. If you communicate how the credit union changes lives and connect people to how their roles move the needle towards changing more lives, they will be sparked to do more. It’s jet fuel.

This was all true before Covid but recent research (see links below) has shown that the pandemic has caused broad swaths of the working population to reconsider what they do and why. People are now more determined to have their work have positive impact and meaning. This is our “in” for getting the right people who share our passion.

Credit union leaders:

You have access to this. But are you doing enough with it? Creating this kind of culture is messy. There’s no straight line or timelines. It has to be constant and it starts with demonstrating what drives you and simple conversations. All. The. Time! There’s no room for lip service, for “do what I say, not what I do.” You have to walk the walk and people will follow you.

Mind The Gap

Make sure your purpose is clear everywhere!

Here’s your next caveat leaders: Don’t fool yourself into thinking that you’re already doing this enough. The McKinseyresearch says that 85% of leadership feel like they’re living their purpose at work. But only 15% of frontline employees say that’s true. Just because everyone around you says it doesn’t mean it’s happening everywhere. Mind the Gap. Close the gap. Communicate and follow through.


This is why many of us are in the credit union movement. But we need to make sure it’s true for every person in every corner of the organization. This is our true differentiator.Do Infinite Good

Here are all of my sources:

There are lots more too! I dare you to Google it. (Kevin)

Positive Friction in the Boardroom: Sand Before You Paint


Creative Friction in the Boardroom

Sand Before you Paint: Creative Friction in the Boardroom

Being “too polite” in the boardroom makes for great collegiality and esprit de corps, but can hold back the overall effectiveness of the group and therefore the organization. With a little bit of intention and some thoughtful approaches you can have a positive friction in the boardroom that that leads to higher performance. Reaching that “healthy” level can be a bit of a tightrope walk.

By Kevin Smith

How polite are your boardroom conversations and your board interactions? If yours is like virtually all credit union boards that I’ve me, the answer is “extremely polite.” Politeness is certainly a virtue, particularly in a world that seems to have less and less of it. But can a group be too polite? If you’ve read anything I’ve ever written you’ll know that I’m “leading the witness.”

In the article, “The Board’s New Innovation Imperative,” Linda A. Hill and George Davis make the argument that politeness can be a liability for boards, particularly those that claim to be trying to push their organizations ahead, to innovate and remain relevant. I’m on their side on this one. But we need to be careful with these ideas and parse them out a bit.

Creative Abrasion

Hill and Davis use the term “creative abrasion.” Their description of it is this, “[…]the ability to develop a marketplace of ideas not from a single flash of insight but from a series of sparks generated through rigorous discourse and debate.” I’m restoring an old cedar trunk of my grandfather’s and there’s a lot of sanding going. It’s preparation for the new, right? And I agree that this is necessary abrasion to get to the new, the valuable and the “not the same way we’ve always done it.” It’s creative tension.

There’s a lot to be said for decorum in meetings, but they can become overly deferential, where politeness, and not being willing to step on anyone’s toes (or feelings) gets in the way of generative group work. These are efforts to avoid conflict, which can stifle growing ideas. Hill and Davis suggest that truly innovative boards can learn to “tolerate come chaos” in their work.

Treat it as a Skill

The key to that is of course how the group goes about learning this skill. For some it comes naturally for others it can be a true phobia. Getting to this level requires some up-front discussion. One or two directors can’t simply push this approach without getting some buy-in. First, acknowledge this as a goal. Put it in the context of aiming for higher performance and better results for your stakeholders. By talking about it up front everyone hears the strategy and goal. Second, set the ground rules. Friction or a bit of chaos in the board room is not a license or an excuse for rudeness and disrespect. Create a clear distinction between disagreeing or challenging ideas and personal attacks.

This is never personal, but always about the best for the organization. For those uncomfortable with conflict, this discussion of expectations will help them to lean-in and work in this framework.

A Word or Two About Personalities

Introverts, Extroverts & Ambiverts

In a best case scenario, your board will comprise an equal number of introverts, extraverts and ambiverts. At worst you have all of one extreme or the other. (Ambiverts get a well-deserved pass here.) There’s been a great deal written in the last few years about these traits, their benefits and how to harness them. But this doesn’t happen passively or by accident. It takes some work. Extraversion has traditionally been more valued and rewarded. Introverts can tend to stay quieter thus appearing less engaged (which is untrue). As an introvert myself, I recognize my own need to lean in and prepare myself for the necessary engagement.

How can we make this work better in a boardroom with creative abrasion:

  • Introverts – you know we don’t like to be put on the spot and do like to prepare our responses. Do your prep work so that you’re ready. Add in some acknowledgement so that you don’t seem simply passive. For example, if some mouthy extravert already made your point, speak up and let the group know that you agree. (You don’t need to repeat the whole spiel.)
  • Extraverts – you know you need to speak to think, so keep this in mind. Make a little space for the quieter ones.
  • Board chair – know your people and their tendencies. Acknowledge them and push for balance. Set up your introverts by giving them a heads-up for dynamic conversation topics and give them time to prepare.

Remember, this trait is mostly about energy. How you get it and how you spend it.


But let’s open up our thinking further. The introversion/extraversion spectrum is not about avoiding or engaging in creative conflict. There is another personality trait that covers this. It’s called Accommodation. It too is a spectrum with the ends being opposite each other: challengers on one side who thrive on conflict and adapters on the other who avoid it at all costs. Those in between are negotiators. Here again it’s helpful to know the personalities in your group and where they fall on this spectrum.

Those on the adapter side are inclined towards harmony in order to “keep the peace.” Again, discussing this up front will set the stage for success by setting the tone and the expectation.

Thoughtful Implementation

As Hill and Davis suggest, this is a culture to be intentionally built. It will not happen by accident. The result is a group that will generate more, and higher quality ideas and approaches. It is the death of groupthink. It is founded on trust.

Footnote – the two personality traits discussed above are based on the work of P.T. Costa, Jr. and R.R. McCrae and the Five Factor model. This model has very high standing in academia with extremely high predictability and replicability. The remaining three traits are: Need for Stability, Originality, and Consolidation. It is a tremendously valuable approach to understanding team members and building trust. Please reach out if you’d like more information. ksmith@forteamresources.com )

Let’s Write it Down! Transparency and Accountability in the Board Room

Written governance policy is the pathway to accountability, transparency and higher performance for credit union boards. Too often boards will have productive discussion and agreement on an approach only to leave it with the conversation hanging in the air, soon to dissipate.  

By Kevin Smith

Directors – are you writing stuff down? Ok, more specifically – your governance policy? Or is it de facto policy that floats around in the culture and in the air of the board room, to be absorbed by participants? You talked about it and everyone agreed … and that’s where it ended.

We promote strategic governance by way of written policy. Determine the rules of the road with pen and paper. Establish the direction and the limitations. Write ‘em down.

Are You Covering Everything?

Yes, many of you have a lot of great governance policies. But are they complete? Have you covered all of necessary territory?

Many boards I know don’t have a board education policy. Rather they have an “expectation” and don’t feel the need to write it down because everyone “gets it.” How do you know they “get it”? Are you sure everyone has the same understanding? How do you enforce this? What if someone doesn’t fulfill this unwritten obligation?

I recently spoke to a CEO who had never had a formal evaluation and never had any written goals or targets. This is pretty extreme, and it’s unusual. It speaks to the level that people are willing to accept boardroom discussion and agreement as the end of the road, without written documentation.

What about a policy that defines communication between the board and staff members? I’ve seen offhand comments made by a board member to a staff person magically turn into policy, simply because it was a board member who said it. How does this idea fit into the “stay out of the weeds” philosophy? (It doesn’t.) It’s only clear, though, if it’s in black and white and agreed to and signed by the board. Do you have a policy that outlines clear expectations for the board’s unity of voice, and how individual directors should behave and communicate in the organization? This codifies the chain of command.

There are lots of examples and those above are important governance issues, clearly. What I’m suggesting is a way to clarify issues, amplify performance and simplify the process. But “Kevin,” you say, “you just told us to add more to what we have, to write more policy. How is that simplifying?” I’m telling you that this pays off and simplifies things pretty quickly. 

Worth the Effort

Yes, this does require discussion up front, then a little wordsmithing for a short policy. But once that’s done it will eliminate gray areas, remove awkward accountability issues (that are often swept under the rug) and in the long run, speed up all of your efforts. Like all things worthwhile in the world, it’s a little bit complex and requires some effort and nuance.

You may be thinking, “We have everything written down. Why is he bringing this up?” If that’s the case, kudos to you and your board. You can take this as proof that you are keeping up with best practices. But all too often I encounter directors and boards, who, when pushed for detail, are missing some key policies, who don’t have everything written down.

Having things written is the key to:

  • Clarity
  • Transparency
  • Accountability

And these lead to higher performance, efficient onboarding, and a great board culture.

I’ll get down off of my soapbox now. But you know that I only do all of this because I care about you, right? I want to help make things easier and better for you. I love my CU peeps.

Are You Holding Your Credit Union Back? A Directors’ Guide to Stepping Up Your Game & Staying Relevant

Your job as a board member is to push forward, not to hold back. Credit union board members may not always have a good sense of how their behavior impacts the credit union itself, often in extremely negative ways. Lack of awareness of the industry and of self can be at play here. Even with the best of intentions, sometimes boards are a drag on the organization without knowing it, creating the environment for catastrophic results.

By Kevin Smith

I know … I know. I’m coming out of the gates here with a negative perspective. I tried to put a positive spin on this but I decided that I didn’t want to beat around the bush on this.

Of course, you need to hear the immediate caveat: NO, not ALL boards are like this. But there are enough that are, that make me feel the need to call attention to this. And my flair for the dramatic says that this headline might just make you indignant enough to stop and question, “He CAN’T mean me, can he? … or can he?” Before you dismiss me, I want you to think long and hard about this. If you’re unsure at all – start asking around, immediately!He can't mean me.

Some boards and/or individual directors are simply not stepping up to do enough work to be helpful to the credit union. They are governing as though it’s 1985 or 1975 or … worse. Sometimes the amount of effort is barely enough to count as fiduciary oversight, let alone cutting-edge strategic thinking. Here are some things to ask yourself about your own service and your board as a whole:

How well do you know the numbers?

The financials in this industry are critical for understanding how things are going. You know, your fiduciary duty of oversight. They’re also complex. I recently wrote about learning these so well that you don’t have to pay much attention to them. If you don’t know these well enough, are you voting on things that you don’t fully grasp? Also to consider – if you don’t know them well enough, are you requiring your CEO or someone else in the organization to spend valuable time reviewing and explaining the fundamentals?

How well do you know the industry?

Many board members I’ve encountered THINK they know everything they need to know, but aren’t really up to date with the 21st Century in financial services. It’s difficult for CU staffers to keep up and they’re in this 40+ hours a week. What are you doing to catch-up. Here’s the dreaded scenario I hear from senior executives: “It took me months to educate and convince the board that XX is a good idea. Now we’re playing catch up in our area/market.” Most of what I see in the context are cases of boards who don’t know what they don’t know. It’s a lack of awareness. Heck, I’m in the business and read about this stuff every single day, and I have a very hard time keeping up. How much effort are your board colleagues spending to keep up? Don’t throw the “I’m just a volunteer” card at me. This is real work. The credit union’s viability is at stake. It’s frustrating for all of us that this industry is as complex as it is now, but that can’t be an excuse for not doing the work. If you don’t know enough about the industry, you are holding the credit union back.

Can you clearly explain the CU’s business model in an elevator pitch? (a minute)

If you answered this with, “We’re like a bank,” or “we take deposits and make loans,” or “we have the best customer service” then I don’t believe you have this firmly in your understanding.

Do you require spending approvals that are relatively low? (“weasel” word alert)

Yes. The word “relatively” is a weasel word here. I can’t give you one number that’s right for every credit union. There are a range of critical variables. But do you and your colleagues have the intenstinal fortitude to ask your CEO this question and be open to really hearing an honest answer: “Is our spending aproval policy at the right level, or is it too low?” Too often what I hear is a number that’s too low.

(*Right now, some of you think that I’m backing only the CEOs, and being paid off to spout off like this. I’m not. You’ll have to trust me.)

You’re thinking: “that’s my oversight role. I need to know what’s being spent and how.” But what I really see most of the time is well-intentioned directors who dig in here to feel like they’re adding value, protecting members’ money, and having control. If fact, what’s going on is friction for the CEO’s attempts at momentum.

Let me ask you this: Generally speaking, how does a CEO benefit by spending more money except for it adding value to the organization on the whole? If anything, a CEO spending recklessly or wastefully is going to hurt the CU’s financials and ratios, making the CEO look bad. Unless, of course, spending the money will create a wise return. The response I usually get is, “We want to make sure that the members’ money is well spent, and isn’t being used on anything too risky.”

Do you hold your board colleagues accountable? (And Vice Versa)

“Accountable for what?” you ask. For:

… when they come to meetings unprepared?

… when they ask questions that are in the weeds?

…when they show that they haven’t done the professional development/learning that they should (or that they said they would).

… when … (fill in your own comment)

Enabling bad behavior does not push your organization forward. It holds it back.

Now many of you reading this are going to believe that you’ve just read something that confirms that you’re part of the best-est credit union in the country. You answered all of my questions and are convinced that you do all of the right things and none of the wrong things. But … how do you know? Are you sure? Do outside sources confirm your suspicions? Or are you just answering with your gut? I challenge you to get feedback and be open to all answers, challenging and not. Be willing to confront issues and hard responses, all in the interest of serving your members and pushing your credit union forward. It’s not personal. We’re all flawed human beings who can work together and achieve great things. This is about making an effort to do better and to be “people helping people.”

I spend a great deal of time talking to CEOs, board members, senior staff members about these kinds of educational issues for boards. At conferences I have sidebar conversations with dedicated members of the movement who are troubled by what they witness. I take phone calls, and respond to emails on this. I spend time training, speaking with and listening to these groups. Enough of this to know that this is a significant issue.

Look for the Helpers: Some Guidance to Directors for Working with your Liaisons

More and more, credit union boards of directors have a staff member who helps with the board’s work. The complexities of the organization require this. This person may go by many different titles and have myriad responsibilities. It’s important for directors to know and understand how this help should (and shouldn’t) work. These “helpers” can make a huge difference in the productivity of the board, and likewise should have a thorough education about governance and the boundaries of the position.

By Kevin Smith

Mr. Rogers always said, “Look for the helpers.” This post is dedicated to him and to the spirit of helping that is at the heart of the CU movement, albeit in a very focused way here.

Recently, I was invited to do a Q&A session for CUES with their Board Liaison community. Straight off the bat, kudos to CUES for recognizing this as a distinct audience in CU world that has specific training and education needs. It’s a growing audience that is hungry for information and eager to be of service. It was a great session and I hope to help further and be involved.

That session made me reflective about the development of this position in CUs and the interactions between them and the board. In my 16 years in the movement, this group has clearly grown. It wasn’t uncommon (and still isn’t, really) that the “liaison” was the CEO themself or it is an “other duty as assigned” for someone in HR for example. But more and more, the liaison role is bigger role. The growth in complexity of credit unions and the demands on board members suggests that this kind of support to the board is becoming an imperative.

Things to Consider

Now … all that I’ve suggested above leads me to some conclusions:

  • There will be growing pains.
    Many job hats.

    Liaisons to the board wear many different hats.

  • A new kind of position will mean a learning curve for both the staff person and the directors.
  • Establishing clear rules and boundaries will be very important (and you probably won’t get it right the first try).
  • Board liaisons wear a great many hats.

For Directors to Keep in Mind

  • Respect the difficulty of a position which requires that many hats.
  • The liaison is not there to do board work, but to support board work.
  • For example:
    • An acceptable request: research board portal products and provide comparisons.
    • An unacceptable request: write a board job description and create an onboarding packet for new board members.
  • Be reasonable in your requests. This is not a personal errand runner.
  • Consider the training/education needs and budget for this position. They should understand board roles, issues and governance as well as you do in order to support the board. They also have a thousand other things to know and understand on the operational side of things.

For Liaisons to Keep in Mind

  • You can make a remarkable difference in how productive your board is with your support.
  • Be careful to keep the boundaries clear between your role and the board’s role.
  • Learning about your board members will help you anticipate their needs and keep things easier for both you and them.
  • Overcommunicate: you live this stuff full-time. Board members do not.
  • Learn as much as you can about board work and roles, including board governance. This will help you anticipate director needs.

Over the years, I have a collaborated with dozens of board liaisons, some talented enough to be running the United Nations. For one offsite retreat that I was facilitating, not only were board members attending, but also a great number of senior staff members, and being over the weekend in the summer, significant others and family members would be there as well. Before I left to travel to the event, I received document that included everyone’s name, role, email, cell number, and the names of their attending guests. It was incredibly helpful, but above and beyond in my opinion. Then when I thought I couldn’t be more impressed, I found out that she had taken note of the favorite drinks and snacks of most of the attendees and made sure that they were available during the retreat. Over the top!

But I’m focusing on the minutia here – beyond all of that, she had a tremendous understanding of board governance and the roles of the directors, and had the ability to anticipate needs and questions that would arise and have things at her fingertips to keep things moving and frictionless.

Oil in the “Well-oiled Machine” … Ghost in the Machine … or Both!

I’m hesitant about the metaphor here, but a great liaison is the oil in a “well-oiled machine.” And I’d like to make sure that they are recognized for their value. I want to make sure that they have the resources they need and the training that they deserve. This is beyond restocking the coffee in the board room. And believe me when I say that I’ve planned and hosted enough board/volunteer conferences in my time to know that this audience drinks A LOT of coffee.

I’d love to hear from the liaison audience here, because I’m sure there are things that I missed. Give us a shout and let us know what you think. The board members need to hear from you. 

Cheers to the “Helpers”! Let’s enable them to be support for our own higher levels of productivity.

Board Members and Staff Surveys: Yes, get them AND be careful!

The staff survey is a long-standing, valuable way to get feedback about the organization for all involved, top to bottom. Board members should absolutely pay close attention to them, but they should also be very careful with them. They can be misleading.

By Kevin Smith

Board members are you getting the full value that the CU can get from the staff survey? Are you getting the results and do you know what’s being done as a result of the information? The value of staff surveys can be tremendous, for all involved. If you’re not using them, you’re missing out. But simply running a survey every year and “using” a survey to its full effectiveness are two very different things. Often, in the TEAM Resources experience, the board is not seeing the full value of this resource; they could be getting significantly more out of them. Boards must make sure they know what they’re looking at and how to understand the context of the survey so that they interpret the results correctly. It’s trickier than it sounds.

Value to Staff

  • Being heard
  • Being part of transparent two-way communication
  • Building a trusting environment

Staff members may or may not appreciate the survey. It depends. If there’s an annual survey but then no one ever hears about the results, then much of the value is gone. The board and management may be getting some great insights, but that’s one-sided value. There’s much more value if everyone hears about what the results are and, most importantly what action is happening as a result of information in the survey. (No this is not a knee jerk reaction to say that if the staff complains about stuff in the survey they automatically get what they want.) It does mean that, at an absolute bare minimum, the staff needs to know by clear communication and acknowledgement, that they have been heard by the board and senior management. And when the staff sees something, any kind of action, that comes as a result of the survey, it signals that the leadership is paying attention to some details. (You’d be surprised at how often this doesn’t happen.)

Real Scenario I’ve seen – We finally got around to the staff survey. We fully intended to share the results with everyone and to talk about the results. Then we got the results and they were really yucky. Someone then decided that we could no longer share them. They got buried.

Value to the Board and Sr. Management

  • Insights into the culture of the organization, good, mediocre and bad
  • Feedback that the board uses for their oversight of the CEO – among many other feedback options

Board Usage of the Survey Results

In general, I see the staff survey used by boards of directors as part of the governance feedback mechanism. That’s a great thing. Boards that have a wide range of feedback tools that are regular and easy to interpret are more likely to stay at the strategic level and less likely to micromanage or spend too much time “in the weeds.” This is one of many feedback tools the board needs.

And very commonly, board members use the staff survey as a CEO oversight tool. The responses provide a temperature gauge of the climate within the organization. Are the employees content? Do they find meaning and purpose in their work? Do employees feel like they are making an impact, moving the needle towards the stated goals? Are their roles clear? Are their operational and emotional needs met? Are they gruntled or disgruntled? All of which reflects on the CEO to whom you’ve delegated operational authority.  

Warning to Board Looking at Survey Results

Given the board’s distance from the staff in general, it’s important for directors to know how to look at staff survey results. This means that board members will need to get some context to the survey. There are many factors that can affect these results that the board will need to have a handle on.

For example: A new CEO (or new Sr. management member) … will cause some vibrations. This could be good shake up or simply time for settling in. If you hired a new CEO to make overdue changes, you can bet the survey results are going to be affected as well. But consider carefully the timing and the context to understand how they may affect the survey results.

The board may also need to take note of homogenous results. It may be counterintuitive but “Everything’s great” survey results may need some drill-down. Yes, it’s very easy see that kind of result, smile and move on. However (comma) in some organizations, particularly small ones, no matter how anonymous the claim of the survey is, there is sometimes a serious reluctance for employees to express their concerns honestly. Individuals fear that their comments will be transparent.

Sometimes this slips out when a director has a one on one conversation with a staff member that starts out casually. This is dangerous territory and the board should tread carefully. Anecdotal evidence is not a trend. Staff members grabbing the ears of board members is not a healthy communication method. But it may just reveal that there is not a safe enough environment for people to be honest about what’s going on. Which means it may be time to start asking questions.

*Sigh* Nothing is simple, is it?

Now What?

  • Surveys are valuable.
  • The board sets the tone at the top.
  • Consider results carefully.
  • Communicate widely and through the appropriate channels.
  • Make sure people feel heard.
  • Take heart when people tell the whole, ugly truth. It can show that they care about what happens to the organization.
  • Be willing to listen, and really
  • Foster transparency, dialogue and culture of safely and support.

Learn the Numbers so Well that you Can Spend Less Time with Them

Credit union board members have to have a very good handle on the organization’s financials. This is often so time consuming that it takes away from valuable time that could be spent on important strategic initiatives/goals. Learning the numbers well enough to get past this is a valuable place that many take years to reach … while others may never get there at all. This holds the credit union back.  

By Kevin Smith

We in the credit union industry do love our ratios, don’t we? It’s a way to make better sense of raw numbers and an attempt to get closer to an “apples to apples” comparison that is of value for strategic or oversight purposes. Now we need to learn and know this stuff well enough that we can spend dramatically less time with it. Sounds a bit contradictory, right?

Problem: What we’ve seen across the country is that new, and relatively new, directors don’t have a reasonable handle on the ratios and financials for a significant amount of time. We measure that in years often, not weeks or even months. (The dirty little secret is that there are also long serving directors who don’t know this stuff well enough.) I remember way back when I joined the CU movement at CUNA, learning them myself. It took some time for this English major. I don’t hold this against the volunteers, but it has very real ramifications for many credit unions.

Context: Too often, board meetings are spending valuable time on reviewing the financials. This is a problem for a variety of reasons. For one, this is backwards-facing information. The financials are looking in the rear-view mirror and asking “how did we do?” This is necessary and is, of course, part of the fiduciary duty of the directors to keep track of. But what I see and hear is that this is requiring CEOs, CFOs and others to spend inordinate amounts of time reviewing these numbers, explaining them, teaching about them … mostly during the board meetings.

Also, board members – stop and think about this: How much time is your CEO, CFO or Chief-Whomever, spending preparing for these meetings? How much time are they spending teaching these things to directors. Remember this when it’s salary review time. You’re having your highest paid executives teach remedial financials to the board. Couldn’t this time be better spent?

Another significant angle to this is the fact that this is all valuable board meeting time that could be focused on strategic items, and planning for the beautiful future, for the things that you’d like to get to, the members you’d like to help. Let’s face it; things don’t typically happen very quickly in the credit union world. Can this be part of the reason why? We’re sucking our valuable time into a less valuable part of the agenda? Nobody wants to have 6-hour board meetings every month, right? The reality is that the board meets for a couple of hours a month and that limited resource should be used very wisely.

One more thing to consider here: Perhaps you want to chime in and tell me that you DON’T, in fact, spend that much time learning financials during the board meeting, and that your crew doesn’t have to ask much about these and that they DO know the ratios. Let me ask again – are you sure there’s true understanding among the board? Or are some directors simply nodding and smiling because they don’t want to admit what they’re not sure about? There are plenty of credit union executives who confide in us, off the record, that their directors are struggling with their understanding.

Solution: Now we’re back to my weird premise. The responsibility for directors to learn the ratios and financials SOOOO well, that they don’t need to spend much time with them. This means treating this like the skill that it is, and the learning curve that is honest and real. It means getting over our own egos and putting in the work. Admitting what we do and don’t know and solving that in a way that doesn’t take up others’ valuable time.

Think back to when you were first learning a sport, an instrument, a language, driving (driving is a really good one). Heck, this might even be back to basic addition. There was practice that you did, over and over in order to master the rudiments. Now you have them so locked in that you can do a lot without much effort and you get a lot of information in the blink of an eye. Heuristics – “a mental shortcut that allows an individual to make a decision, pass judgment, or solve a problem quickly and with minimal mental effort.” 

My goal with credit union financials, from a board member’s perspective, is to be able to squint at a chart and be able to get as much information as I need in order to know whether I need to start asking more questions.

Board members – you have a duty. You are serving the credit union (as a volunteer, I know), and this requires work. It doesn’t have to be onerous. In fact, I want to tell you that making sure you know the ratios well enough to spend less time with them, is an investment that yields great dividends. It saves time, focuses efforts towards the strategic, aka the more rewarding work.

Shameless plug TEAM Resources offers resources for learning this information. Most recently we build the Doorways to Success Series: Financial Mastery. See more about it here. Board members love it, but so do CEOs and CFOs who now have time for important work since their boards have adopted it.

Thanks for listening.
Have a nice day.

Credit Union CEO Salaries: Wading into Turbulent Waters and Pulling the Board Members with Us

As the credit union industry changes rapidly and increases in complexity, board members need to make sure they are keeping up with industry trends and standards. If they don’t, they risk their credit union becoming irrelevant and disappearing. One area that this is increasingly a problem is CEO salaries. Board members are often out of step with industry norms and expectations on CEO salaries, and that gap could become a detriment to their credit union.

By Kevin Smith and Tim Harrington

Here’s the scene: a young, first-time CEO stepping up to her new job, accepting a lower than desired/expected base salary. She rationalizes this as okay because she is a first-time CEO and is very happy to have the shot at the leadership role. After a couple of years, and some dramatically positive results for the credit union, the new CEO asks the board to revisit the salary only to have the board shut her down or offer a token “bump” in salary that is not aligned with the competitive realities of the marketplace, and certainly not aligned with the bottom line value provided by the CEO. The frustrated CEO is looking for ways to communicate with the board and get the value aligned … but that’s not going well.

We’re seeing this enough to call it a pattern.

Credit Union CEO Salary Discussion

Credit Union CEO Salary Discussion

This isn’t just happening with new CEOs trying to elevate their base salary to industry standards, it is also happening with long-time CEOs who are frustrated watching their base salary continue to fall behind the market. We are often asked to weigh-in about credit union CEO salary issues, sometimes by the board, sometimes by the CEO. To be clear, at TEAM Resources, we are NOT compensation experts. This does not fit into the consulting services we offer. But we are often pulled into this from a board/CEO communications and philosophical /theoretical/governance point of view. That’s the point of view we’ll present from here.

The reason we decided to write on this is that we have suddenly seen and uptick in these issues. CEOs and Boards at odds over what the CEO should be earning.

The CEO Pay Patterns

The general gist of all of the discussions is this: CEOs are concerned that their board of directors is out of touch with how to handle CEO pay. The boards are concerned that their CEO is expecting too much in salary or other compensation and is not appreciative of the board’s effort to compensate them fairly. Beyond that, the conversation takes a few somewhat nuanced but predictable patterns.

In each recent situation we have encountered, the CEO has made the following clear: They are thrilled to have the position. They are loyal to the credit union and don’t want to move. But they hit this compensation wall regularly enough that they are likely to seek another position.

There are a number of factors that regularly show up for this, sometimes in combinations:

  • The CEO is aware of the increasing complexity of the credit union and demands on the CEO. Technology, competitive and regulatory demands have all ratcheted-up in the last several years.
  • The board has typically given the CEO a certain annual increase that coincides with the annual increase given to the staff.
  • The CEO is aware – from peers, on-line CEO forums and trade-group salary surveys –what he or she should be earning, and comparing that to what they are currently earning.
  • The CEO is uncomfortable taking this information to the board…until the disparity becomes big enough that something must be done. By this time, there is also pent-up frustration.
  • Directors tend to support a base salary compensation calculation that reflects whatever industry they came from. If they work for the county, they propose a system like the county’s. If they came from the nearby manufacturing plant, they propose a system like the manufacturing plant’s. The problem is, few directors come from the financial services sector and are simply not aware how compensation is being calculated in THIS INDUSTRY.
  • Sometimes, the board is made up of members who never made a salary anywhere near what the new CEO is making and simply can’t see paying someone even more than they are already making.

Sadly, what has happened a few times is that the CEO reluctantly seeks employment elsewhere. And the board gets sticker-shock when they see what the new CEO candidates are expecting as their salary requirements.

What Should Board Members Do?

The simple answer is learn. It can be disorienting to see the salary expectations if your career background is very different from that of the credit union. But your role as a board member requires that you understand the industry. Comparing credit union salaries to your own background is often an apples-to-oranges comparison. If you can’t make that mental separation and consider your board service from the required fiduciary role, you are not the right board member for the credit union. It’s as simple as that.

Ask the right questions during the compensation process. Are you asking yourself, “I never made anywhere near that much money in a year. How can I vote for that?” or are you asking, “is this what’s right for our credit union, and our members?” Obviously, we’d like to see you asking the latter question.

Establish a Consistent System

What we still see is the board meeting toward the end of the year and saying, “Well, what do you think we should do about the CEO’s pay for the coming year?” This leads to arguments and heated discussions. It leads to inconsistency and arbitrary increases. We suggest you establish a Compensation Calculation System and put it into policy. This system could include third-party salary consultants, it could include references to the trade association salary surveys. Whatever you do, make sure you know what market salaries are doing, set up a system you can follow each year so that you don’t have to reinvent the process every year-end, and know what it will take to retain the talent you have.

Talent War for Leadership Positions

One of the greatest challenges in the next decade will be attracting and retaining talented people… and that starts with the CEO. There is a fierce competition for leadership talent within the financial services realm and certainly within the credit union movement. When you find a good CEO, do everything you can to retain him or her and reward them appropriately. If you don’t, well, what’s that old saying? “Penny wise and pound foolish.” You may have saved a few dollars by not keeping the current CEO appropriately paid. But then you will need to hire a new CEO, with all those costs and a new, higher salary. This is where that Sticker Shock comes in.

We believe that sometimes the board has the expectation that hiring a very young CEO is both a long-term plan (to avoid going through this process again any time soon) and a way to keep the salary lower. Youth is not a rationale for cost savings where the CEO is concerned.

There are plenty of ways to approach the compensation issue, with different methods of determining base salary incentives and bonus structure. Board awareness and interest, and leaving behind outmoded approaches and mindsets is needed in the modern arena. Taking an approach like this is also encouraging the best for the credit union’s sustainability. (I read a fantastic Filene.org report from 2012 by Mike Higgins Jr. “Improving Peer Group Analysis for Credit Unions” that tackles benchmarking in a way that promotes member value and not simply backward looking ‘profit.’ I recommend it highly. No, it’s not out of date.)

Perhaps we’ve thrown a live grenade into a conversation. It’s not the first time.

It may appear that we’ve come out unabashedly on the side of the CEOs here without “both-sidesing” the topic. We don’t think so. If you know us at all you know that we have spent our credit union careers  primarily educating, supporting, and researching the best interests of credit union volunteers. We believe in them … in you. This is part of that effort.

Certainly, there CAN be CEOs who aren’t earning what they’re getting or those who are asking for more than they’re worth. (Don’t we have that everywhere, in everything?) Don’t throw that at us, please. This requires a more nuanced examination. And no, we don’t think CEOs get to write their own ticket no matter the circumstances.

What we DO believe is that this is a significant issue in our industry and that board members need to make sure their heads are not in the sand. We DO believe that without some recognition of this as an issue, credit unions are going to suffer and some of them are going to lose great talent, or end up with leadership that is mediocre enough to make the credit union go away. That’s not hyperbole.

As always – we welcome your thoughts and comments.

Oh yeah … Happy Holidays!! We’re counting on 2021 being a helluva lot better. Aren’t you?

–  Tim and Kevin

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