Tag Archive for: #boardagenda

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You Can’t Do Things Differently Without Doing Things Differently

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Credit unions as an industry have had to lean in towards rapid change and evolution over the last decade, exacerbated by the pandemic. Boards of directors are starting to (finally) acknowledge the need to try to lean in to these changes. Yet, despite these good intentions, often the lean in turns to lip service when they fail to actually “do things” differently in the boardroom.

By Kevin Smith

There certainly aren’t a lot of silver linings from the pandemic. As a matter of fact, I don’t even like presenting it in this light. But one angle that I think we can all agree on is that credit unions, who aren’t known for their speed in change, found out that they could pivot on a dime when they had to. It was fabulous to see worried credit union leaders and their staffs adapt and figure things out pretty quickly. It’s my hope that we all embrace this as a new skill set and keep flexing that muscle. Indeed, many have.

In that light, we also saw some slow to move boards have their eyes thrown wide at the steps necessary to keep working towards the credit union’s purpose. Directors faced the unsettling predicament and supported their leadership and staff as they made fairly radical moves to keep the organization open and serving members who desperately needed their help. Most rose to the challenge and it was fantastic to watch (stressful as it was).

I Worry About Lip Service (and everything else)

Now when I worry (and I do worry), it’s about falling back into old patterns, inertia and complacency. Mostly what I notice from directors is significant embracing of the language of change, particularly when they talk about their leadership and the operations. But what I’m seeing less is boards leaning in themselves to changing their patterns and approaches in the board room and in their governance work.  

It’s not exactly lip service to embracing change that I see. Board members seem very genuinely supportive of the need for faster evolution and development at the operational level. Though it looks a lot more like lip service in regard to changing at the governance level. The two need to happen in synchrony to be most effective.

Snark Alert

Hence the snarky title of this post: You can’t do things differently, if you don’t do things differently.

  • Does your monthly agenda basically a template reused month to month?
  • Do your board meetings have a very predictable flow?
  • Are the same people talkative (or quiet) without fail?
  • Has your board packet had the same format for, oh, over a decade?

These may be red flags that the board is in a rut.

*(Here’s a fun, or maybe terrible, exercise: Challenge the senior leadership to do the funniest skit possible, while performing as the board of directors. This “court jester” approach will reveal any predictability and stereotypes that bubble to the surface. Warning: you may need thick skin for this, but it will certainly be educational.)

Yeahbuts

Naturally I come prepared for the Yeahbuts.

  • “Yeah, but it took us a long time to develop this approach and it works really well.”
  • “Yeah, but we have a lot of work to do and this is efficient.”
  • “Yeah, but the regulators are expecting xyz.”
  • “Yeah, but you’re suggesting change for change’s sake.”
  • “Yeah, but all of this change is going to cause a lot of extra work for the board and the staff.”

I’m not suggesting reinvention every month, or change for change’s sake only. I am suggesting that the entire board look carefully at what they do, question it, and evaluate it in light of the changes the world has made around you. Make sure that anything that fits the category of “this is the way we’ve always done it” gets careful examination for relevance.

Suggestions for Inspection

  • The board agenda: are there interesting discussions, not just monthly updates?
  • Once a year (or as needed), make a determined effort to refine an element of the board packet that makes it easier. [Some of you may need a full revamp. This is more effort. Tackle it. Others may be able to do a regular tweak.]
  • Board chairs: review the personalities in the room. Find out how to change the dynamics of predictable discussions. (Have a one-on-one chat with all directors and ask them for help.)

Support for the Change-Hesitant

Not everyone embraces change. Some actively push back against it. But the adage holds true: “The only constant is change.” So, I encourage directors to have a discussion to really understand how you may be doing things differently to support the change in the operations. You will need to support and understand those who are resistant and help them face the approach with strength. It’s worth it.

What Does ChatGPT Know About Credit Union Boards? (And Do You Want to Know?)

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I asked ChatGPT what is the biggest failing of credit union boards of directors. It spit out a very interesting (dare I say “thought”-ful?) list. A healthy director and board will consider these potential failings with a hard look in the mirror.

By Kevin Smith

ChatGPT

What does ChatGPT know about credit union boards of directors?

I’m generally not a bleeding-edge adopter of technology. But I’m no Luddite either. My preferred category is fast-follower. So, this whole AI, large language model of machine learning thing has finally gotten my attention. (Given it’s prevalence in the media, it’s no wonder.) And I decided to try it out. What’s this got to do with credit union boards of directors, you say? Well, let’s see.

I decided to find out what ChatGPT had to say about something I felt I knew something about: credit union boards, so that I could evaluate the response. And the prompt that I chose was this:

What is the biggest failing of credit union boards of directors?

And here is ChatGPT’s Response to the prompt:

While credit unions generally operate with a member-centric focus and strive to fulfill their mission of serving their members, they are not exempt from potential challenges and failings. One of the most significant failings that credit union boards of directors might encounter is a lack of diversity and inclusion. Here are some aspects to consider:

  1. Lack of Diversity on the Board: Credit union boards may suffer from homogeneity in terms of demographics, professional backgrounds, and experiences. This lack of diversity can limit the board’s ability to consider different perspectives and adequately represent the diverse needs of their membership.
  2. Insufficient Expertise and Skills: Sometimes, credit union boards might lack specific expertise, such as financial, technology, or marketing knowledge, which are crucial for making informed decisions and staying competitive in the financial industry.
  3. Limited Understanding of Membership Needs: If the board is not adequately connected to the credit union’s membership or lacks insight into their evolving needs, it may lead to misaligned strategies and services that do not effectively address member concerns.
  4. Ineffective Governance and Oversight: Boards that do not have clear governance structures or fail to provide proper oversight might face challenges in ensuring financial stability, managing risks, or maintaining compliance with regulations.
  5. Resistance to Change: In rapidly evolving markets, credit unions must adapt to new technologies and member preferences. If the board is resistant to change or slow to respond to shifts in the financial industry, the credit union’s ability to remain competitive and relevant could be compromised.
  6. Inadequate Succession Planning: A failure to plan for board member succession can lead to a lack of continuity in leadership and a loss of institutional knowledge. Effective succession planning ensures a smooth transition and fosters a long-term vision.
  7. Weak Communication and Engagement: Boards that do not actively engage with their members and fail to communicate transparently may lead to dissatisfaction among members and weaken the credit union’s sense of community.

It’s important to note that not all credit unions will experience these challenges, and many credit union boards effectively address and overcome these potential failings. By promoting diversity, fostering a culture of continuous learning, engaging with members, and maintaining strong governance practices, credit union boards can improve their ability to serve their members and fulfill their mission effectively. Regular assessments, training, and ongoing self-evaluation can also help boards identify areas for improvement and ensure they are meeting the evolving needs of their members.

End of ChatGPT and back to Kevin. 

Keep in Mind

Keep in mind that what ChatGPT does is “scrape” the interweb-tubes for its information, which means that what you see above is information that came from humans at some point.

What do you think? What do I think?

What do you think of this list of “failings?” Does it resonate with you? With your board? With your experience of the credit union movement?

What I think is that people in our industry don’t like to dwell on the negative for fear of being seen as pessimistic. But a lot of what is said above, is also said in hallways outside of conference rooms, or in one-one-one conversations. And I agree with most all of what’s in that list … to one degree or another.

Before You Get Defensive

Now before you start drafting a salty comment or email to me about how your board isn’t like that and isn’t failing, etc., please take a breath. I make a clear caveat quite often: This list of failings that I agree with represents a broad generalization about boards in the credit union movement as a whole. Notice very carefully the final paragraph from the results, starting “It’s important to note that not all credit unions ….” Isn’t that interesting how ChatGPT has its very own caveat about this not being true of every organization? I’m giving it some added style points for that flourish as I wasn’t expecting that.

What Do We Do With This?

Every board would be prudent to review this list and put it on an agenda for discussion. (This would be a great topic to bandy back and forth on your board portal.) Every board should reflect in an honest way about where they stand on all of these issues. It’s very important to acknowledge that it can be very difficult to see your own failings, to have anything but a rosy view of how your board is doing. No one ever says, “Yes, it’s me. I’m resistant to change.” But it is very clear that credit union boards can be prone to this issue. What’s worse, is when there’s one board member with this problem that is holding back the full board but no one will confront them on it.

This requires candor. It requires trust. It requires a full-fledged desire to do what’s best for the credit union. And it’s very worthwhile.

So, thank you to ChatGPT for this interesting exercise. Now … what do you think? As always, we’d like hear your thoughts.

Protect Your Board Meeting Time & Agenda Like a Mama Bear!

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The time at the board meeting should be carefully thought out and protected as the limited and valuable resource that it is. Boards that meet once a month for about two hours need that time focused on the most strategic and the most valuable items. Not on operational details, updates and review (rear view mirror) items. 

by Kevin Smith

That’s right! Like a mama bear protecting her cubs. That’s how fierce you should protect your board meeting time and agenda. Modern credit union boards that I work with generally meet for a couple of hours once a month. That’s not a lot of time. Boards need to use that time very wisely. It’s a scarce resource. The idea that things have become more complex is so commonplace that it’s an overwhelming cliche now. But it’s true, which makes the need to protect the agenda and the time all the more critical. Don’t let “busy work” get in the way of “important work” and discussion at the highest level.  

What Happens a Lot

When we survey boards about board time use (“Do you focus on what’s important and strategic?”), we get a regular “oh, yeah, sure we do.” But what we observe, and what the one-on-one conversations tell us is about the amount of time spent on the trivial, the operational, or on the distractions. We witness it first hand often enough, too often. There’s a lot of good intention here. But also a lot of slippery slopes about what’s important. 

Many board meetings are taken up with updates on projects, or extensive reviews of last month’s or last quarter’s numbers. There’s time spent reviewing policies and updating them. All of this is required by the board, and it’s necessary work. But does it need to happen during the limited time of the board meeting? (Pssst… the answer is “no” unless there are concerns or discussion needed.) CEOs and CFOs spend an awful lot of time giving verbal updates during board meetings, taking up valuable time for strategic discussion. (See below.) 

Often, board members aren’t as prepared as they should be for meetings. This results in people needing to rehash or explain things, taking up valuable time for strategic discussion. 

What Should Happen

First things first: adopt the consent agenda if you haven’t already. It seems like most have done this. It’s a huge time saver and it keeps things focused. However (comma) this only works if everyone does the preparation and the pre-reading. If members aren’t fully prepared for the consent agenda, then in reality you are just skipping things. You must hold each other accountable for coming prepared. 

Do as many pragmatic things as possible in between board meetings. Use your board portal and electronic tools as much as possible. (Again, hold each other accountable for doing this.) There’s a lot of review that directors do via the portal electronically before the board meeting. 

Have the CEO and any other staff members giving an update record these updates via video. (No, don’t have them write these updates because it will take them too long and you’ll doze off while reading them.) Make sure that you communicate to them that these videos should be casual, that they don’t have to be rehearsed or take too long. This should be the same thing they’d do in the meeting, just done ahead of time. Board members MUST review these and send their questions before the board meeting. (Accountability!) 

Structure your agenda so that the strategic discussions come early and have time allotted for them. There’s nothing worse than having several updates, or pragmatic issues “run long” and take up the time of a strategic discussion and cut it short (so that the meeting can be done “on time.” 😕 )

What Isn’t Going to Happen

Things aren’t going to get easier. They’re not going to get less complex. They aren’t going to suddenly take less time. But you CAN protect the meeting time and the agenda for the best work. 

If this all sounds like a lot of work or too much work, I’m not going to mince words: then this isn’t the right job for you. (Yes, it’s a job, even if it doesn’t pay anything.) Credit union board work is harder and more complex than it used to be, requiring the right kind of skill, focus, and, yes, time. We can not expect things to be like they were in the “good old days.” 

Let’s face it – strategic discussion is the most rewarding work of the board. You can structure things so that they’re as efficient as possible. You can hold each other accountable for doing the work in the best time and place. And you can improve the performance of the board. We all need to aim high. It’s a fabulous job worth doing. Our members need us. 

P.S. 

Check out the interesting results from last month’s poll about Boards Behaving Badly! It was interesting to see how spread out the results were. None of these personalities seems significantly more pervasive than the rest. As of this writing we had 96 respondents. Go ahead and keep adding to it! Make sure you check as many as you need and click the “Show Results” button on the bottom. 

As always, we encourage you to leave comments. 

Dedicated to YOUR Success . . .

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