The CEO’s Annual Review in a Crisis

Credit union directors face a daunting challenge this year as you consider the annual review of your credit union’s CEO. Many or all of your standard metrics will need to be thrown out and replaced with criteria that is specific to the context of the year.

By Tim Harrington and Kevin Smith

CEO Annual Review

CEO Annual Review

One of the significant functions of the board of directors is to perform the annual review of your CEO. Many of you will face this soon, before the end of the year. So what emoji adequately captures your thoughts on getting ready for that? Confusion, fright, thoughtful, scared, face-palm, nausea, challenge? It’s all of the above, right?

The most likely scenario is that whatever you set up last year as part of the strategic plan for 2020 you need to fully or mostly throw aside and you will have to start over.

At TEAM Resources we have been working on this issue. We found it challenging as well. We have done research about what other industries are doing. Do you know what we found? Very little, many are stumped, and what advice IS out there is impossibly vague. Not helpful.

Consider this: Your CEO may have worked harder than ever before this year. In previous years, a less-than-stellar CEO in a good economy may have reached numbers that meant a very large bonus. This year, despite all of the hard work from a great leader, the credit union might lose some money. Thanks to his/her hard work, the credit union not only still exists, but the loss of money could have been a bloodbath, but it’s not. Is it fair to not reward this because the organization “lost” money? (We’re facing a Gilligan’s Island moment, believe it or not: “If not for the courage of the fearless crew, the Minnow would be lost, the Minnow would be lost.”)

At the same time, you will have to consider how much the credit union is struggling, or whether there have been layoffs or furloughs in the face of the pandemic. This may not be the time to be handing out bonuses despite how hard your CEO worked, and how much they rose to the leadership challenges throw their way.

So, What Annual Review Criteria Do You Look For This Year?

Now is the time to reflect on your values as a credit union and as a board. Review all that has happened. What were the notable things that happened that are in line with the clear values of the organization? Things like:

  • Members helped;
  • Staff health and wellbeing preserved … or notably inspired;
  • Difficult decisions made under duress that helped; or
  • Innovative products created;

Or … the opposite of all of this. What if the CEO didn’t rise to the crisis leadership challenge? This cannot be glossed over either. But judging that on outdated financial targets/projections is not the way to assess that.

Part of what you can do is let these values guide you and your discussion throughout the process. But what we want to caution you about is turning this review into a purely subjective response.

Considerations of the CEO Assessment     

Boards also need to consider are the implications to not getting this annual review right.

There are significant downsides of not being able to reward the efforts, recognize the dedication, loyalty & achievement. This is true in any year, but may be more so in a year of crisis.

How do you handle this? Like all good complex questions, the answer is “it depends.” You will need to ask your CEO for different kinds of information that aren’t on your standard metric reporting. Ask for measurements of things that did happen this year that were in line with your values and goals for the credit union.

Can you compare to expectations, or to peer? Well … maybe, but both of those options require some significant analysis of the context to make them realistic and valuable.

Want more detail on this topic?

We have created a webinar on this topic to dig in further. We invite you to have a look: for more information.

or you can order it now for $199:

The Board Chair’s Guide to Zoom Meetings

Let me guess … your board meeting has gone digital and virtual, right? Lucky guess or what?!

Credit Union Board Chairs – Let’s talk about that move to virtual. Let’s talk about what that means for you and how things need to change.

Let’s be clear. This move is not like moving to a different meeting room while your board room gets painted. This isn’t a simple change of physical space. The meetings will need to be managed differently and more carefully.

As you probably already know, it’s going to take a while for everyone to get used to this. Be patient but not so much so that you let things fall through the cracks. Discussion may be clunky as only one person can speak at a time. This tends to make people stay more silent than usual. That may be a welcome relief from Chatty-Charlie but your quieter board members are likely to go invisible altogether. That’s not acceptable.

Communication Breakdown: Is it always the same?

First, you’re going to need to manage the group in a more calculated way with more overt rules to keep things running smoothly. This means communication and more communication, and then a bit more. Don’t worry about being redundant redundant.

Send as much as you can ahead of time, with regular reminders. (Think how many times you’ve lost the first reminder you got about something and then had to dig for it in your email!)

Overt Instructions

Now, when you start the meeting, give clear instructions about how you will be managing the meeting. Don’t take little things for granted that you would at an in-person meeting.

For example,
“Here’s how we’re going to handle the discussion and agenda for today:

We’ll use raised hands AND voice for making a motion and for a second.

You all have a post-it note next to you. Raise the post-it when you want to jump in about something.”

Taking Advantage of Visual Cues

And here’s a little trick I picked up from L. David Marquet in Leadership is Language:

Rather than asking yes/no questions, like, “does anyone have any objections?” or “Do we all agree?” (These invite simple agreement and groupthink.) Try, “With one hand, give me a zero to five. How confident are you about taking this approach?” (BTW – Marquet’s book is fantastic! I highly recommend it.)

This not only takes advantage of the visual cues, but also gives insight about low or high confidence – always valuable to the conversation. They all may have voted yes, but a person who is a “one” for confidence is far different than the person who gave a “five.” That’s your chance to tease this out and have the right kind of debate.

Make these things clear. And as chair, in this setting, you’ll need to be a bit more active about drawing out voices. You don’t need people to chat, just for the sake of chatting, but you DO need to make sure there’s healthy debate.

And then there’s always the trick of assigning the role of devil’s advocate on a rotating basis.

The “Mores” (Not the Moores)

There should be lots of “mores.”

  • More communication
  • More preparation
  • More done in between meetings
  • More “managing” of the meeting in a calculated way.
  • More managing of any tendency towards silence.
  • More facing hesitance and spotting it and digging in deeper.
  • More talk via phone in between. (Not everything has to be on Zoom video, for crying out lout!)

No. This virtual think did NOT necessarily make your job any easier, I’m afraid. But you’ll find that these are easy things to incorporate and in short order they’ll become customary and help things along. You might even find some things that ARE in fact helping you make some much needed changes in the board dynamic.

10 Critical Elements of a Board’s Role in Crisis Management

by Tim Harrington
1. Take the moral high ground. Do what is right. Stay true to your “Moral Purpose” and its focus towards your members, employees and community.
2. Keep people’s health and safety first.
3. Be proactive. When signs of a crisis arise, start asking the tough questions of each other and of the CEO. Gather additional information as necessary.
4. Be nimble in changing board processes and roles: new committees, virtual meetings, on-line votes, etc.
5. Support the CEO. Ask “what do you need from the board?”
6. Be prepared to temporarily redraw the line between Governance and Operations if necessary. This line is not fixed. In good times it should give the CEO great leeway. But it may shift toward operations in crisis.
7. Keep the full board apprised, not just the chair, executive committee, risk committee, etc.
8. Speed up every process you have. Immediacy is essential.
9. Over-communication is better than under communication.
10. Know that at the center of every catastrophe is the seed opportunity.

How to spot a board in trouble (an incomplete listicle)

By Tim Harrington and Kevin Smith

This is not a comprehensive list. In fact, we’d like to hear from others the things that they’ve seen or what they look for. We’re sure our smart readership has some things to add. This is also not a checklist. We’re not suggesting that once you’ve identified all eight of these you’ve found your troubled board. (Notice that some of these are countervailing.) But these are things that show up regularly and have been present when dealing with troubles.

How to Spot a Board in Trouble, Red Flags

How to Spot a Board in Trouble

  1. No turnover on the board – Why? Lack of desire for change? Lack of recruiting? Difficulty in recruiting? Contentment with the status quo?
  2. Heavy turnover on the board – Again, why?
  3. No diversity on the board – this means you really don’t represent the demographics of your membership. (We doubt your field of membership is made up exclusively of 67-year-old white dudes.)
  4. The CEO attends all committee meetings – Is this the board’s overreliance on the CEO? Or is this the CEOs inability to let go of control?
  5. No executive sessions – This suggests that there is a lack of trust somewhere (or a lack of understanding of executive sessions). See our blog post about this topic.
  6. Same chair for the last 20+ years – This is a red flag about resistance to change. (This could be a chair that has been begging for years for someone else to take the helm, which is also a red flag.)
  7. Four CEOs in the last five years – Not long ago we talked about the “rebound” CEO, which means it’s very possible to have had three CEOs in the last five years and that’s only a bump in the road and not a red flag. But the minute you reach the number “four” this is a giant red flag.
  8. All of the board members are from the single SEG sponsor (even though the CU has had a community charter for years). Do we have to explain this one? See #6.

Some of you are going to disagree. We’re fine with that.
Some of you are going to point out a piece of anecdotal evidence that contradicts what we’ve said above. We’re also fine with that, and we still strongly make our claim despite your story.

Let’s duke it out and talk about it.

Yes. Context is everything. These are red flags that cause us to explore, and ask more questions.

Any questions? Any answers? Anyone want a mint?


On the Board Improvement Highway, The Onramp and the Offramp are Equally Important

Onboarding and offboarding of directors is crucial for boards with an Infinite mindset and goal for improvement. Often onboarding gets lip service and a little attention while offboarding is virtually unheard of. These steps help create a positive governance culture and a higher performing board. Presenting comprehensive information with support, and asking the right questions are the ways to unlock the power of these.

By Kevin Smith

Board Improvement Highway

Board Improvement Highway

It’s a simple metaphor. Really. Credit union board service is a highway journey for which we must have an onramp and an offramp. But here’s the deal – too many credit unions, boards and directors only pay attention to the “highway” part of that. Some pay cursory attention to the onramp and MOST ignore the offramp completely. To extend this metaphor (reductio ad absurdum) to the ridiculous, it’s as if the board-mobile slows down a little bit, barely long enough for you to get in, but only opens the door for you to drop and roll on the way out. Sheesh! All to the detriment of the board. (In the next episode – is your board-mobile a 1972 Cadillac, a 1986 Chevy Chevette or a 2020 Tesla?!) Read more

Governance During Crisis: Some Thoughts on Board Leadership Amidst the Coronavirus Outbreak

Please have a look at the article that we wrote for Credit Union Times:


Shared vs. Classical Leadership & Challenges in Governance

Shared leadership is what credit union board members should practice but it’s rarely an idea that individuals coming into board service have a strong history with or understanding of. Intentionally opening up this as a discussion and reviewing expectations can be a tremendous asset towards effectiveness.

Recently, as part of my regular nerdy reading, I came across this distinction between Shared and ClassicalLeadership as drawn out by Nemerowicz and Rosi, in Education for Leadership and Social Responsibility (1997). I came of age really only knowing the classical definition of leadership as they’re presented here.

Shared vs. Classical Leadership

Nemerowicz and Rosi, Education for Leadership and Social Responsibility (1997), London, U.K.: Falmer Press

It was in the context of Herbert Thompson’s dissertation, Governance as Stewardship (2015), that the significance of this distinction for credit union board members became more apparent to me. Thompson notes, “In many cases, new board members, come to their first nonprofit governance experience with only a classical leadership understanding and cursory practice with operational/administrative boards” (43). Thinking back over my years of working with boards, this idea (of shared leadership) has been floating under the surface, and been mostly presumed but unsaid. This is a concept that is important to note and should be called out, brought to the surface and addressed more matter-of-factly. Read more

On the Rebound: Challenges in Hiring a CEO

On the Rebound: Challenges in Hiring a CEO

One of the most valuable and challenging actions a board can take is to hire a new CEO. Many credit union boards face replacing long-serving CEO who came up through the ranks from when the organization was much smaller. In this environment with a relative lack of experience the board may end up with a “rebound” CEO who isn’t a good fit and doesn’t last.

By Kevin Smith

There’s a scenario that I’ve come across a couple of times this year in credit unions, and I’ve heard of others. It seems to be a trend or at least a microtrend.

Here’s the scenario: A credit union has a long serving CEO, someone who often started at an entry level position and rose through the ranks to become the Chief Executive. After many years, or decades at the helm, the CEO retires. Nothing novel here (though the mere talk of it is enough to make some board members and board chairs start to sweat). And indeed, the board and the CU make not just average level efforts at succession, but really do take this seriously in order to make sure that they have the right fit in the next generation leader for their shop and for their members. They work hard at it, get industry research, sometimes hire a headhunter, make all the right phone calls and references, yadda yadda yadda. In other words – they do what they were supposed to do.

But here’s what happens: The new CEO lasts for roughly a year, give or take, and is gone. “What happened,” you ask? The response is often a range of stunned and unclear responses. “It just didn’t work out.” “It wasn’t a good fit.” “We thought we had a good cultural fit but it wasn’t.” Or even, “we don’t know what the heck happened, but it was a train wreck.”

I feel for these boards. I really do. Often, their good faith efforts really should have paid off with a good fit. But they didn’t. It all went sideways.

Read more

That New Car Smell and Invisible Customer Service

That New Car Smell and Invisible Customer Service

Not all customer service needs to be red carpet, or concierge service. Sometimes invisible customer service is the best and what the customer wants. Credit unions may need to consider whether their members need much more than this in general.

By Kevin Smith

That New Car Smell and Invisible Customer Service

Yes. This is my actual car. Pretty, isn’t it?

So, I just bought a new car recently, a 2020 Suburu Outback. And in case you think that this sounds a bit bragg-y, this car is a replacement for a 2006 Minivan with 165K miles, a rebuilt transmission, and in my favorite color (my favorite color = paid for). No, I’m not a new car every year kind of guy. For anyone that knows me this is a “no kidding” moment if there ever was one.

I’ve been reflecting on the experience of buying a new car and how much that’s changed over the years, even before the Minivan. And I’ve been comparing this with my experience working with credit unions as they try to engage with their members and compete with other providers.

Read more

Are Your Board Members and Your CEO too Chummy?

Are Your Board Members and Your CEO too Chummy?

Board members and the board chair can compromise their ability to hold the CEO accountable if their relationship is too close, or too friendly. Directors should reflect on that relationship and how to manage that tight rope walk, managing extremes. By Kevin Smith

Did you have a gut-level, visceral response to my title? I mean, beyond your mocking me for using the word “chummy”? Often when I ask this question, I can see the reaction in the eyes of the audience. There’s usually a couple of noticeable responses in the eyes:                 

     1. Hmmm…I never thought of that before. Let me think about that.
Never thought of that!

                            2. How dare you? That’s an insulting idea.
That's insulting!

                            3. Holy Toledo! That’s us!  
Oops! That's us. Read more

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