The Board and Supervisory Committee Dynamic

Creating A Good Board/Supervisory Committee Dynamic
By Tim Harrington & Kevin Smith

What does it mean to have a healthy relationship or dynamic between the board and the supervisory committee? We suppose that’s probably as unique as your organization and as individual as your members. That means that there’s no one “right” answer to this.

Kevin and I were recently facilitating a two-day governance workshop and this issue came up. We didn’t end up with a great deal of time to talk it through (as we had a litany of items to talk about), but it did get us to thinking about this as an issue.

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Google Research & the Quality Most Important to Team Success

By Tim Harrington & Kevin Smith

So … Google thinks it know what the most important qualities are for team success. Well, of course they do. They’re Google. Don’t they know everything these days? Or at least they know how to find it.

Most of the work done at Google is done in teams. That’s also true for many of us. And of course, it’s hugely important to know how to make sure that teams are as effective as possible. There are entire industries built around figuring this out. Google set out to find the answers (Here’s the original article). Here’s some of what they found.

The most important trait for team success … (drumroll, please) – psychological safety for the team members. The comfort and trust in the team setting to weigh in, to brainstorm without fear, to point out potential problems to superiors without fear of retribution, and ability to act in the best interest of the goal, rather than navigating the personalities (or office politics) of the team.

Here’s how they put it:
Psychological safety: refers to an individual’s perception of the consequences of taking an interpersonal risk or a belief that a team is safe for risk taking in the face of being seen as ignorant, incompetent, negative, or disruptive. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.

But before we go further, just what do they mean by “effective”? That can be a loaded idea, where everyone thinks they understand it, but all of the definitions are different. The researchers measured team effectiveness in four different ways:

  1. Executive evaluation of the team
  2. Team leader evaluation of the team
  3. Team member evaluation of the team
  4. Sales performance against quarterly quota

The Five Most Important Qualities for Team Effectiveness:

Psychological Safety – Team members feel safe to take risks and be vulnerable in front of each other.
Dependability – Team members get things done on time and meet Google’s high bar for excellence.
Structure & Clarity – Team members have clear roles, plans, and goals.
Meaning – Work is personally important to team members.
Impact – Team members think their work matters and creates change.

The researchers also discovered which variables were not significantly connected with team effectiveness at Google:

  • Colocation of teammates (sitting together in the same office)
  • Consensus-driven decision making
  • Extroversion of team members
  • Individual performance of team members
  • Workload size
    (Also very interesting, wouldn’t you agree? Some long held assumptions shot right down here. More on that at a later date.)

The most important qualities reported here line up to us in a nice way with Lencioni’s Five Dysfunctions of a Team, which we’ve found enormously helpful in our work, particularly in the areas of trust and accountability. At the same time, it seems like it’s opening a whole new can of challenging worms.

This idea of psychological safety could be a game-changer for so many organizations. We’ve seen an awful lot of folks who give plenty of lip service to this idea, but who don’t actually follow through on it in a meaningful way for one reason or another. Perhaps because one or more senior people don’t really buy it, or because people didn’t really treat it as that TOP MOST IMPORTANT element that makes a team effective, as Google has found. Many treat it as a nice to have, not a MUST have, or top priority as this research suggests.

In light of this research, will you do a hard look in the mirror to find out if your teams create true psychological safety in order to have a higher level of success and effectiveness? Are you willing to invest in this kind of culture at your organization in order to make this happen? Because that’s what it will take – investment. We’re not talking about cash, but time, energy, and authenticity to create this kind of safe environment. Too often, we see cultures that are defensive and a high level of CYA (i.e. the opposite of psychological safety). A good culture of trust doesn’t just happen overnight; it is fostered and nurtured continuously when senior leadership values it. And now the Google research has reinforced what that can yield. Will this be the year that you make an impact on your culture? I mean … we generally trust Google to have the answers, don’t we?

Credit Union Strategic Governance Basics by TEAM Resources

Hey Credit Union Friends!

We are thrilled to announce the newest publication from TEAM Resources: A Credit Union Guide to Strategic Governance, by Tim Harrington and Kevin Smith. This book has been long in the works, developed around the strategic governance philosophy that Tim and Kevin have been presenting to audiences over the years and now coming in book form. We anticipate the book to be available in December of this year. (It’s at the designers!)

You can preorder the book now and save $. Click here to order! 

In the meantime, to promote the TEAM Resources Strategic Governance approach, TEAM Resources is offering a free webinar on Monday, December 11 (1:00 PM – 1:45 PM CST).

In this webinar Kevin Smith will provide an overview of the TEAM Resources Strategic Governance approach as developed by Tim Harrington, CPA and Kevin Smith. You will get an overview of the evolution of governance issues for credit unions, hear the basic steps of Strategic Governance (i.e. what to do, and what to stop doing), learn how to maintain proper oversight, and develop an approach to maintaining a strategic approach via policy.

To register for this webinar, click here.

And please share this will all of your credit union friends!

Tim and Kevin

You’ve Got the Right to Fight: Healthy dissent in the boardroom leads to better outcomes for your CU.

by Kevin Smith, Publisher, TEAM Resources
(A version of this post was originally published in the July CUNA Directors Newsletter.)

I’m here to start an argument. There. I said it. I mean it.

What I’d like to see is more arguing among credit union board members. What I am seeing is a bit too much harmony for my taste. And no, this isn’t about shadenfreude (no matter how much I like to say that word). This is about board engagement, and avoiding complacency. In general, I’m seeing and hearing about too much complacency.

Now, don’t get me wrong. Harmony on a board of directors is a good thing, to be fostered and cultivated. But if there are only unanimous votes, too much harmony, too much kumbaya … that’s a red flag for me. It usually means there isn’t enough thought going into the discussions and material at hand.

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The Importance of Strategic Planning for Small Credit Unions

The Good, the Mediocre, & the Stopped

by Tim Harrington and Kevin Smith (originally published as an article in

There’s a common belief in credit union land that you have to be over $500 million in assets to survive, some even say $1 billion. We say, “That’s a bunch of hooey!” Small credit unions can survive. But to do so, you must specialize. When your entire credit union is the size of a big bank’s individual branches, you can’t take them head on. So what do you do? Specialize and Thrive!

To do this, small credit unions must place greater importance on their strategic planning efforts. It would be a tremendous benefit to them and to the credit union movement. There are 4234 credit unions in the U.S. under $100 million in assets. That’s out of 5785 total credit unions (as of this posting) or 73% of all credit unions. That’s a lot. (“No kidding,” you say). Read more

The Connection Between Board Diversity & the CEO

by Kevin Smith

The topic of board diversity has been bubbling about the credit union industry for quite a few years now, and with good reason. A healthy, diverse board can have a dramatically positive impact on an organization’s performance. But I recently ran across a new angle to this argument worth considering. There is a recent study that suggests the level of board diversity at the CEOs previous position affects performance at your organization. In other words, if you have a newer CEO, who came from another organization, the diversity of his/her previous board will impact current performance. The more diverse the previous board was, the better the performance. The less diverse … the more likely the CEO is to leave the job within three years.

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Governance Outside of the Bowls

Board Members – What do You Know? And how do You Know You Know? ‘Ya know?

(Better Title: Governance Outside the Bowls)

Tim Harrington and Kevin Smith, TEAM Resources

Yeah, yeah, we all know (or should) … the board of directors has fiduciary duty in the operations of the credit union:

From the federal regulations:

(a) General direction and control of a Federal credit union. The board of directors is responsible for the general direction and control of the affairs of each Federal credit union. While a Federal credit union board of directors may delegate the execution of operational functions to Federal credit union personnel, the ultimate responsibility of each Federal credit union’s board of directors for that Federal credit union’s direction and control is non-delegable.

(3) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in paragraph (d).*

[*These are only excerpts that serve my purpose right now. You should know the full text.]

(Source: )

The board has oversight of the credit union. And the board has to know what’s going on inside the credit union in order to have proper oversight. So where are you getting your information? What do you read that tells you what’s going on? Surely you’re not hanging around in the CEO’s or the CFO’s office watching thrilling data stream across the computer screen. You get information in your packet once a month, right? (Electronically by now, I hope.)

Board governance includes oversight.

And you read these packets. Which means you know. But how do you know, you know?

Layers of policy create the area where the CEO has the authority to execute the strategic plan.

I know. I’m being obtuse. Let’s cut to the chase.

Credit union directors should have a range of feedback/reporting systems in place to ensure proper fiduciary oversight of the credit union. Your information should come from a variety of sources and should line up to paint a consistent picture. At TEAM Resources we call this “governance outside of the bowls.”
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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.

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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.

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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. Read more

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