The Problem With Consensus

When boards have a culture of consensus, the problem with consensus is that directors can use it as a weapon, to shut down things that they don’t like. In general, we like to have agreement and consensus, but too much of a good thing can go bad. Healthy boards know how to disagree and move on.

By Kevin Smith

Can consensus be a bad thing? That’s a loaded rhetorical question. Of course, it can. You read the title of the article. So, as I lead into my thoughts hear, take a moment to think about your board’s, your committee’s culture. Do you have consensus in general? Are your votes mostly unanimous? Always unanimous? The follow up then is – if there is disagreement, do you try to “work thought it” before you have a vote? Doing so is making efforts towards consensus. Mostly that’s a good thing. But let’s examine how that can go sideways.

The Problem with Consensus: Anecdote Time

The Problem with Consensus

Not long ago I was doing some governance work with a board. At a break, the chair pulled me aside to have a quiet conversation. He told me that he was struggling to communicate with an individual board member who was objecting to an issue. (I don’t want to color the discussion by identifying the topic, but it was a very significant issue.) As the chair told it, the rest of the board had agreed on the path forward but one director was a holdout. This director had flat out rejected the data to support the issue, but the rest of the board had accepted it. The first approach was to add additional research to convince the holdout of what the board (and management team) was promoting. This was unsuccessful. I asked the chair if he had called for a vote. He said, “no.” It was clear from the lead up discussions where the dissenting director stood. And his further response was, “we like to have everyone on the same page. We work on consensus.”  

Unwarranted Veto Power

In effect, this one director had absolute veto power. The board was not going to move forward until they had consensus. And one director had dug in their heels and put a stop to something they didn’t like, despite the fact that the rest of the board wanted to move forward. One director was (is) holding the board hostage because of the “culture” of the board.

The Power of Culture

My suggestion to the chair was to hold a vote and move on. It sounded awfully easy to me as an outsider. “Sometimes you’re on the losing end of a vote,” I thought. Big whoop. But I forced myself to consider this more carefully and reflect on how powerful “culture” can be in all settings. To suggest simply upending what was probably decades of established culture in the board room, would not be as simple as the way I had tossed it out.

While acknowledging how powerful culture can be, I stand by the idea that the right answer is hold the vote and move on. It just may take a few more steps to get to that. But I hope you can see how big the problem with consensus can be. Now imagine a step further: if a board has trouble with a single holdout, how would they deal with a contentious 5-4 situation? Would they be traumatized?

What to Do About It?

If you’ve kept up with what I write about in this space, you’ll know that I’m a big fan of arguments in the boardroom. Easy for me to say, I know. But when directors are able to have disagreements about positions and talk it out, in general that means there is enough trust in the room to air these discussions. This is a good starting point. Many boards I know struggle with this basic level. There is no back and forth discussion, and it’s always total agreement. This is just as bad as extreme contention. So consider pushing back gently on ideas and issues (that you feel strongly about). The room can/will get used to debate.

But in the anecdote above, at least one director clearly didn’t have any problem with pushing back. In this case, I would suggest that the chair be willing to call attention to this and have a discussion about it. It may not be easy to say, “we’d like to have consensus on this, but it’s too important to be held back for long. We will vote if necessary. What are your thoughts on this?” But it’s necessary.

Small Steps

Now that you’ve thought about the culture of your board – consider what small steps you might take in each board meeting that will get everyone used to hearty discussion, that will increase trust in each other (so that you can argue and come away positive colleagues). You might even bring this up as a topic of conversation – Do we have too much consensus? Are we in danger of having one person highjack an issue? Are we willing to take a contentious vote? My first sentence would be, “I’m giving all of you permission and encouragement to push back on me.” If you never have this, you need time to get used to it. Start now.  

Carefully Consider Your Nominations and Re-Nominations


It’s more important these days for boards to give a critical eye to every director that is that is up for re-nomination. Too often this is treated as inevitable rather than a privilege to be earned. Too often boards don’t express candor to underperforming directors. Creating a checklist of expectations establishes transparency  that pushes towards higher performance.

by Kevin Smith

Succession Planning
So … the NCUA has new proposed rules about the board’s involvement in succession planning. (You do know that, right?) They’re concerned that the board’s relative lack of involvement is undermining the futures of some credit unions. As a last resort from lack of plans, some merge away. We’re not big fans of that.

Succession planning is about preparing to have the right people in place for the future of the organization. That includes discussion of the directors currently in their positions now. We are here today, friends, to talk about incumbents and the re-nomination process. And we’re here to suggest that re-nomination isn’t or shouldn’t be the result of simply asking the incumbent if they want to run again. Re-nomination should be tied to criteria about the board member’s performance over their term.

Recently, Tim created the “Incumbent Director Re-nomination Checklist” that you see here. It came out of his desire to see board members holding each other accountable and setting a transparent process that outlines the responsibilities of directors who want to be renominated for another term. In 18 questions Tim has created a comprehensive review of the incumbent’s performance. This checklist is to be filled out by all other board members. The checklist sets a (fairly minimal) standard for directors to live up to.

The Fatal Flaw of our Checklist
This is tricky territory we acknowledge. And we’re here to head off your criticisms from the get-go. This checklist clearly has a fatal flaw. Pause for a minute and consider what you think that flaw is. (I’m happy to wait.)

OK, did you think of something?

So, in my opinion, the fatal flaw is the fact that most directors won’t be candid enough in their responses in the checklist to make it work. Directors won’t be truthful enough in their ratings. They aren’t candid enough with underperforming directors as it is. What makes us think that a checklist is going to change that? That is my very real fear. But that’s no reason not the have the checklist anyway. I’m here to argue that having the checklist is still worthwhile and that it will nudge progress in the right direction. Simply by adopting the checklist, by having a discussion about using it and agreeing to take it on begins setting a tone about the requirements and need to hit them. When the first re-nominations come around on the calendar after you’ve adopted these, you’ll have to have that reminder conversation about the expectations that the board agreed to. That is already progress. Now, if you go through all of this and directors are still overly soft on incumbents, it’s not ideal. But it’s a starting point for another conversation.

So … that was the fatal flaw that you came up with, right? Oh, it wasn’t? Well then, I’m going to need you to write your own version in the comments below. Tim and I think this is a good idea and it’s relatively new. But if you see issues here, tell us. We like to think things through and hear from you.

The Other Complaint You’re Waiting to Lob at Us
I know you’re just chomping at the bit to let us know your other concern about this checklist approach. (This is going to circle right back to the new succession planning regs.) It’s something along the lines of, “we have a hard enough time trying to recruit directors, and now you want us to make it harder for the ones we have to stay in place?!” We hear you and know the recruiting struggles that boards are having, but the answer is still “yes.” Recruiting and succession planning is more important than ever (see the NCUA letter linked above). The fact that it’s difficult is not an excuse to lower the bar of qualifications and expectations of effort.

Setting the Tone
All of this is about setting the tone of the board and creating clear expectations for performance. Boards have no bosses and have to hold each other accountable. From our vantage point working with boards all over the country, there are not enough candid conversations about performance and not enough accountability. Directors are too easy on colleagues who are not doing their duty. We are a polite, well-meaning crowd that doesn’t like confrontation. It doesn’t have to be difficult. It doesn’t have to be mean-spirited. It does have to be honest and transparent. This is based on trust and candor. A simple checklist can move you in that direction. Download it. Share it with your crew. Have a conversation. Let us know how it goes.

Redefine “Efficiency”

Redefine "Efficiency"

Many fall into the trap of chasing efficiency too hard and to the overall detriment of the organization. This is often enabled by the board. Efficiency does not mean running at the edge of collapse. Board members can be asking questions to encourage the productive health of the team rather than chasing a ratio as low as it will go. It’s time to redefine “efficiency.”

By Kevin Smith

Resources, human and money, are limited, never endless. I’m making sure you know that I know that before we get into this topic.

What I Often See

I’ve worked with organizations that have staffing strategy that run the razors edge of collapse, almost as a strategy. They would brag about how “efficient” they were and how low the efficiency ratio was. This looks really great to the board, right? I’m guilty of that thinking sometimes. But when I talk to boards, I remind them that this is not a ratio that you can chase to zero. Sometimes your level of perceived “efficiency” is keeping the organization from doing what you’d like it to do.

I’ll tell you what’s actually happening in some of these places that are bragging about how lean they run. Work is piling up on people in a way that will become unsustainable. This is generally from the middle of the organization down. It’s bad enough that people will burn out and potentially leave, but there are even greater harms that come with this. I’ve been in meeting rooms where there was open discussion about strategies to deal with “breaking points” for workloads. The open conversation was, “We know that this is too much for you, but leadership will not approve any new hires. We’ve asked. The only way to change this is for something to go horribly wrong.” Those in the middle often end up as the scapegoats when something inevitably does collapse.

What I’m describing is a very toxic environment. Certainly not all scenarios are this extreme, but consider where you might be on the spectrum from overstaffed to critically understaffed. Do you really know where you stand? Do you know if you’re getting the right inputs to have a good sense of this?

Yes, keeping costs down helps the bottom line. But focusing too hard on expense control may prevent you from having the capacity to add income, or services

Questions for the Board to Ask*

  • What are we not able to get to that would be great?
  • What’s on your wish list?
  • What are the current fires to put out?

*These questions require a high level of trust between the board and the CEO. When you ask these, your CEO can’t be afraid that these are next month’s “to-do list” or list of admonishments as missed goals.

Yes, It’s Tough Out There Now

Some of you are thinking – “I can’t even hire enough people to get to a bare minimum right now. Why are you talking to me about ‘buffer’?” Some of our clients are in this boat, and I understand the frustration. But looking at this issue from your scarcity perspective can be equally valuable. The hiring issues will change and end, and probably pretty soon. What can happen though, is organizations can get so used to the crisis mode of running leaner than ideal that you lose sight of what it means to have adequate resources. When you run from fire to fire for long enough, when that starts to taper off it feels like space. In reality you’ve just gone from really terrible to pretty bad, and that feels like progress. It’s easy to lose your perspective about what “ideal” looks like after extreme scarcity.

If – for two years you’ve been running at 75% with open positions and people out sick, at a chaos level,
Then –  when things ease up and you get to 90%, it feels like cushion because you are no longer in “frantic” mode.
But – this is not the same as being staffed adequately, where people have the time and energy to be innovative, and to get at new and bigger things.

Questions for Me to Ask of Boards

  • How much emphasis do you put on the efficiency ratio?
  • Is lower always better to the boar and leadership?
  • How does the CEO talk about efficiency and staffing? Is it predictable?
  • Is there enough trust between the board and the CEO, and between the CEO and the staff to have honest conversations about where things stand and where they should be?
  • If you answered “yes” to the question above, how do you know? What’s your evidence?

This is Important!

This is an important topic for boards to have a good handle on (even if you’re understaffed right now). The critical risk is that efforts to run so lean usually mean that the credit union is not getting to projects that that a new, innovative and that cause growth.

I’m asking you to make sure your approaches are not in a rut, or on autopilot. Ask new and different questions (always at the strategic level). One of those is about efficiency. Does the discussion about this always go the same way? It is time to shake things up a bit?

For those of you wondering out there, yes, there are credit unions that are bloated and that need trimming and to understand how to “right-size.” It’s a complicated world with lots of paths. But this is a topic for another day.

Diversity Gains on the Board

Diversity Gains On the BoardBy Kevin Smith

“Companies appear to be discovering that a big talent pool of nonwhite people and women for board seats does, in fact, exist. Some, like Dr. Hammond, have been hiding in plain sight.”
Board Diversity Increased in 2021. Some Ask What Took So Long
Peter Eavis, New York Times, January 3, 2022

Board succession planning and recruitment has been a hot topic for a while now. This isn’t my first blog post about it and I’ve been talking about it at trade conferences and in individual credit unions more in the last couple of years. It’s heartening to see diversity gains on the board highlighted in this news story as accomplished, not just a talking point and an “elusive” goal. This is tremendously valuable to the board’s role and it can be done. But … and I hope you know this … it’s work. It doesn’t just fall in the collective lap of the board.

Do the Work

I’m not going to rehash the value of diversity here. It’s at the point where I’m going to take that as a given. However, in the same breath, I know that there are those out there who aren’t convinced. There is no doubt that’s true, because I have been part of the debate and an observer in the room while it happens.

If you’re not convinced about the value, do the work. A Google search will yield weeks’ worth of reading from qualified researchers.

Buy In

Not long ago a director insisted to me that diversity is ALWAYS secondary to the qualifications of the candidate. That was his reason for pushing back on diversity efforts from his colleagues. Never once came the acknowledgement that there can and should be both qualifications and diversity. And the “qualifications-first” argument feels very disingenuous. I’ve worked with thousands of board members. One of the conversation sparks that I use in training rooms is to ask long tenured board members how long their learning curve was when first joining. This is typically measured in years. I ask those senior directors to tell the rookies in the room what they wished they’d learned first or faster. There is plenty to talk about! In fact, the majority of the directors I know don’t come from a background in financial services, credit unions, or the like. They ALL have plenty to learn as quickly as possible. So, at a basic level, those “qualifications” we’re looking for are critical thinking skills, curiosity and the desire to learn (with maybe a few more sprinkled in as well).

How to Achieve Diversity Gains on the Board

I tend to say this a lot: It’s simple, but not necessarily easy.

  • Start with what you have. Write down what you want. Examine the gaps. Fill the gaps.
  • With 7-9 board members you may never get to perfect, and that’s okay. Push for always just a bit better.
  • Create an evergreen list of candidates. Require that every board member add a name to the list every year. (C’mon. One per year! Doable!) Names may come and go.
  • You don’t have to look for existing members (though it doesn’t hurt). You can look for people in the community that show the leadership and qualities that you want and go talk to them. Figure out how to make them members when the time comes. Identify the most impressive people you can find. Set the bar high.
  • Change your mindset. No longer can we look to friends who look and act just like us from down the hall to fill the seat. It’s important. Do the work.
  • Sell it!


I hear from plenty of board members who lament the fact that people don’t have the time, don’t have the interest, don’t have the [fill in the blank], yadda yadda yadda. Then I ask them, “why do you do this?” They brighten and tell me all of the passionate reasons why they serve. Board recruitment means selling the job and giving candidates the WIIFM (What’s in it for me?). It’s not an understatement to say that you can change people’s lives! Yes, people are busy, but if you give them the right reasons, they will share your passion. Anything else is a copout.

A Variety of Ages Also Counts as Diversity

My colleague, TEAM Resources founder, Tim Harrington pushes for young professionals to join credit union boards. I couldn’t agree more. They come with a fresh perspective; they’re steeped in technology that some of us with graying hair are still learning. And it can be pretty easy to give them their WIIFM. The resume item, “board member of a financial services provider” yields results to someone looking to advance. And think of the connections the rest of the tenured board and senior leaders at the credit union can provide for an up and coming professional. Sell it, baby!

I’m encouraged by the article I posted above. Likewise, I’m encouraged by the discussions I’ve been part of and the growing acknowledgement of the value of diversity. But I’m eager to see more results, more diversity gains on the board. You can do it. It’s worth it. Let Tim and me know how we can help.

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. )

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.

© Copyright 2022 - Site design by Sprout Studio in Madison, WI