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.
- No turnover on the board – Why? Lack of desire for change? Lack of recruiting? Difficulty in recruiting? Contentment with the status quo?
- Heavy turnover on the board – Again, why?
- 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.)
- 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?
- 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.
- 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.)
- 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.
- 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?