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Your Board Approved a Strategy. Now What?

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   by That One Consultant You Hired and Then Ignored

Congratulations. The retreat was excellent. The facilitator was engaging. The catering was better than last year. Someone brought a whiteboard marker that actually worked, which felt like a sign. You debated the difference between a mission and a vision for forty-five minutes, landed somewhere everyone could live with, and produced a strategic plan that is ambitious, realistic, member-focused, and aligned with the credit union’s core values.

You took a group photo.

You went home.

And now it is four months later and someone at the board table has asked how the strategic plan is going, and the CEO has said “well” and moved to the next agenda item, and the board has moved with them, because the strategic plan is in a binder somewhere and the quarterly financials are right here and they are also well, more or less, and there is a lot on the agenda tonight.

This is not a story about a bad strategic plan. This is a story about what happens to good strategic plans when the board confuses approving a strategy with governing one.

The Binder Problem

Strategic plans love binders. Binders are where strategic plans go to be important without being inconvenient. A binder communicates seriousness. It has tabs. It has page numbers. It was printed on nice paper, possibly at a copy shop, possibly by a staff member who has quietly resented this task for eight years.

The binder sits on a shelf. The shelf is in a room. The room is at the credit union. The plan is technically accessible at all times. This is often the last thing that happens to it.

The failure mode here is not negligence. It is a category error. Boards that produce a strategic plan and then wait to hear how it went have mistaken strategic approval for strategic governance. Approval is a moment. Governance is a continuous process. One of them requires a vote. The other requires showing up for the next thirty-six months and asking uncomfortable questions at regular intervals.

The board’s job does not end when the motion carries. It begins there.

What “Monitoring” Actually Means

Most boards receive strategic plan updates in the form of a management report that arrives quarterly in the board packet, usually buried between the financial statements and a committee report that nobody has read in three years. The update is generally optimistic. It contains phrases like “on track,” “progressing as planned,” and “continued momentum.” It does not contain the phrase “we are behind and here is why.”

This is not necessarily dishonesty. It is the natural behavior of a management team reporting to a board that has not told them what it wants to know. If the board has never defined what strategic success looks like in measurable terms — if it has never said “by September we expect X, and here is how we’ll know if we have it” — then management will report what it has, which is activity. Activity is not strategy. Activity is what organizations do while strategy either happens or doesn’t.

Effective strategic monitoring starts before the monitoring does. It starts at the retreat, or immediately after, when the board and CEO agree on the specific indicators that will tell them whether the strategy is working. Not “we will grow membership” but “we will grow membership by 3.5% with net new members disproportionately from the 25-40 age segment by December.” Not “we will improve member experience” but “our member satisfaction score will reach 87 by Q3, and here is the survey that will measure it.”

Vague strategies produce vague progress reports. Vague progress reports produce unanimous board votes to continue. Unanimous board votes to continue are not governance. They are theater.

The Accountability Gap

Here is the thing about strategic plans that nobody says out loud at the retreat: the board approved the plan, but the CEO is responsible for executing it. That is the right division of labor. That is also the source of a persistent accountability gap that most boards quietly decide not to think about.

The gap works like this. The board approves a strategy that includes, say, a digital transformation initiative that will modernize the credit union’s technology infrastructure, improve member-facing services, and position the institution competitively for the next decade. Everyone is excited about this. It is in the plan. It has a timeline.

Eighteen months later, the initiative is behind schedule, over budget, and the vendor relationship has become complicated in ways that the CEO is managing. The board has received three quarterly reports describing the situation as “progressing.” Nobody has lied. Nobody has said “everything is fine.” They have said “progressing,” which is the strategic planning equivalent of “it’s complicated” — technically true, substantively uninformative, and carefully calibrated to not require a board conversation that anyone is eager to have.

The board’s job in this scenario is to notice. To ask. To say: our last three quarterly reports have described this initiative as progressing, and I would like to know specifically what progressing means, what the original timeline was, where we are against it, what the variance costs, and what management’s plan is for the remainder of the initiative.

Not because the board wants to manage the initiative. It does not. That is the CEO’s job. Because the board approved the strategy, which means the board is accountable to the membership for whether that strategy is working, which means the board needs enough information to make that determination, which means the board has to ask.

The board that never asks inconvenient questions about strategic execution is not a supportive board. It is an absent one.

What a Functioning Strategic Governance Process Actually Looks Like

It is not complicated. It is just consistent, which turns out to be harder.

The board and CEO agree, before the retreat ends or immediately after, on a strategic dashboard: the four to eight indicators that will tell them whether the strategy is on track. These indicators are specific, measurable, and tied to the actual goals in the plan — not proxies, not activity metrics, not things that always go up.

The dashboard appears on every board agenda. Not buried in the packet. On the agenda, at the front, before the financial statements, while everyone is awake and paying attention. It takes ten minutes. It surfaces what is on track and what is not. It creates a standing expectation that strategic progress is a governance conversation, not a management report.

When something is off track, the board asks what happened, what management is doing about it, and what the board needs to decide or provide to support the response. When something is on track, the board notes it and moves on. The point is not to celebrate or interrogate. The point is to maintain the board’s visibility into whether the strategy it approved is actually happening in the organization it governs.

Once a year — usually at the annual retreat — the board steps back from the dashboard and asks a larger question: does this strategy still make sense? Have the competitive environment, regulatory landscape, membership demographics, or economic conditions changed in ways that require us to revisit the plan? Is the strategy we approved eighteen months ago still the right strategy for the next eighteen months?

That conversation is the board at its most valuable — not approving management’s work, not monitoring management’s execution, but doing the thing that only the board can do, which is bringing an independent perspective to whether the organization is going in the right direction.

The binder is a prop. The retreat is a beginning. The strategy is a commitment the board made on behalf of its members to govern the institution in a specific direction, with specific priorities, toward specific outcomes.

The vote was the easy part.

The hard part is the next thirty-six months of board meetings, during which the board will be tempted, repeatedly, to receive a progress report, note that things are progressing, and move on.

That temptation is the thing to govern.

#boardgovernance #creditunionboards #strategicplanning #strategyexecution #CEOoversight #boardaccountability #governancematters #creditunions

 

What Your CEO Isn’t Telling the Board (And Why That’s the Board’s Fault)

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by That One Consultant You Hired and Then Ignored

There is a number from the 2025 PwC survey of more than 500 executives that deserves more attention than it has received.

Nearly one-third of executives said management could be more transparent with the board about key risks and challenges.

Read that again slowly.

This is not a survey of board members complaining about their CEOs. This is a survey of executives — the people doing the managing — saying that the people they report to are not getting the full picture. One in three. Volunteering this information. Anonymously, which is the only reason anyone says anything honest about their board.

The standard response to this finding is to treat it as a management problem. Management needs to communicate better. Management needs to be more forthcoming. Management should take a course, read a book, attend a session at the directors conference where a consultant — probably this one — explains the importance of transparency.

This is the wrong response.

The question worth asking is not why management isn’t being more transparent. The question is what the board has done to make transparency feel like a bad idea.

The Environment Problem

Organizations get the information flow they deserve. Not the information flow they ask for. Not the information flow they put in the board packet request template. The one they deserve, based on the environment they have built over years of responding — or not responding — to the things management tells them.

Boards rarely receive bad news because they have trained their CEOs, through years of consistent feedback, not to bring it.

The training is never explicit. No board chair has ever said, in an open meeting, “please do not tell us about problems, we find it uncomfortable.” What boards say, consistently, through their behavior, is something more like: when you bring us good news, the meeting goes smoothly and everyone goes home on time. When you bring us bad news, someone asks a pointed question that you cannot fully answer, someone else expresses concern in a way that feels like doubt, the chair follows up with you privately in a tone that suggests this should not have happened, and the whole thing takes forty-five minutes longer than it needed to.

The CEO is not slow. The CEO has noticed.

What Managing Up Actually Looks Like

Managing up is the practice of presenting information to your superiors in a way that manages their reaction rather than informs their judgment. It is not lying. It is framing. It is calibration. It is the art of telling the truth in a way that does not cause problems.

It looks like this.

The credit union’s loan delinquency rate has been creeping up for two quarters. It is not yet alarming — it is at the upper boundary of the peer range, not beyond it — but the trend is not friendly, and the causes are worth discussing. Management has a view on what is driving it and a plan for addressing it.

In a board environment where candor is rewarded, the CEO brings this to the board. Here is the trend. Here is what we think is causing it. Here is our plan. Here is what we need from you, if anything.

In a board environment where candor is managed, the CEO mentions it. Briefly. In the context of a broader financial performance narrative that emphasizes the things that are going well. The delinquency trend appears in the written report, in a table, in a font size that communicates “this is here if you want it” rather than “this is something we should talk about.” If nobody asks, the meeting moves on.

Nobody asks.

The CEO has not lied. The information was in the packet. The board had it. The board just did not have it in a way that suggested it mattered, and the CEO did not present it in a way that suggested it mattered, because presenting bad news as if it matters has a track record in this boardroom, and the track record is not good.

This is how credit unions develop problems that the board later describes as surprises.

They were not surprises. They were in the packet.

What Boards Do That Makes This Worse

The behaviors that suppress honest information flow are almost universally well-intentioned. That is what makes them hard to see and harder to stop.

Shooting the messenger. When a CEO brings a problem to the board and the board’s primary response is to establish how the problem occurred and who is responsible, the CEO learns that bringing problems to the board is a process of assigning blame. The next problem gets managed differently.

Conflating candor with incompetence. When a CEO says “I don’t know yet” or “we got this wrong and here is what we are doing about it,” and the board responds with a concern that sounds like “should we be worried about management’s ability to handle this,” the CEO learns that uncertainty is a liability. The next time there is uncertainty, the CEO will wait until there is certainty — or something close enough to certainty to present confidently — before bringing it to the board.

Rewarding the smooth meeting. Boards that consistently reward meetings where nothing difficult comes up — where the agenda moves efficiently and everyone leaves on time and nobody is uncomfortable — have created an incentive structure that selects against difficult information. The CEO who brings a hard problem is making a meeting worse. The CEO who saves it for next quarter, when they have a plan ready, is making a meeting better. Both of them are rational.

Asking the wrong questions. “Is everything on track?” is a question that has one answer in a managed information environment. “Everything” is never entirely on track. “On track” means different things to different people. A CEO who wants to give a reassuring answer to “is everything on track” can almost always find one. Boards that ask “what is keeping you up at night” or “what are we not talking about that we should be” are asking questions that are harder to manage. They are also getting closer to the information they actually need.

Providing no safe landing for bad news. Executive session exists, in part, precisely for this purpose — to give the CEO a protected space to raise things that are difficult, uncertain, or uncomfortable without the full governance apparatus of a board meeting response. Boards that hold executive session rarely, or only in moments of crisis, have eliminated one of the primary mechanisms for candid information flow. The CEO who cannot say “I am worried about something and I am not sure what to do about it” has no place to say it. So they don’t.

The Board’s Actual Job Here

The board cannot audit its own information environment. This is the uncomfortable part. The board knows only what it is told, which means it cannot fully assess the accuracy of what it is told, which means the board is always somewhat dependent on the CEO’s willingness to tell it the truth.

That dependence does not make the board powerless. It makes the board responsible for creating conditions under which telling the truth is the rational choice.

That means asking questions that are harder to manage than to answer honestly. It means responding to bad news with “thank you for telling us” before responding with “what happened.” It means normalizing executive session so that it is a standing feature of governance rather than a signal that something is catastrophically wrong. It means conducting a CEO evaluation process that treats candor as a competency to reward rather than an inconvenience to tolerate.

It means understanding that a CEO who only brings good news is not a CEO who only has good news.

It means asking, occasionally, what is not in the board packet and why.

Nearly one in three executives say management could be more transparent with the board.

The executives know what is not being said. They are choosing, rationally, not to say it.

The board that wants to change that number does not need a transparency policy. It needs to look honestly at the environment it has created and ask which parts of it make transparency feel like a risk.

That is a harder question than “why isn’t the CEO telling us everything?”

It is also the right one.

(*Like I said last month, if all the other cool kids can use AI images, then I can too. But I need to learn how to write better prompts.)

The Board That Governs Generously (And Why That’s Not a Compliment)

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by That One Consultant You Hired and Then Ignored

There is a type of credit union board that every CEO secretly dreams about.

They show up prepared. They ask reasonable questions. They approve the budget without drama, accept the strategic plan with enthusiasm, and conclude every board meeting with a warm round of applause for management’s hard work. They are supportive. They are collegial. They finish on time, which means the CEO can make their dinner reservation, and the board chair can get home before the game starts.

They are also, in the truest sense of the phrase, asleep at the wheel — and the wheel is pointed at the members’ assets.

Welcome to the board that governs generously: the well-meaning, deeply pleasant governance failure that nobody talks about because it doesn’t yell, doesn’t micromanage, and has never once asked about the break room chairs. It just quietly fails the members it was elected to protect, with excellent manners, a unanimous vote, and a really nice gift basket for the outgoing director.

The Other Ditch

Most governance conversations focus on boards that do too much — the ones that interrogate invoices, re-litigate settled decisions, and treat every board meeting like a congressional subcommittee hearing with worse lighting and no C-SPAN coverage. We wrote about that board. That board has problems.

But there is a ditch on the other side of the road, and it is considerably easier to drive into, because the road into it is smooth, well-lit, and everyone on the bus is smiling.

The board that governs generously has convinced itself that support and accountability are the same thing. They are not. Support is what you give a CEO who is making good decisions. Accountability is what you give a CEO who needs to make better ones. Conflating the two doesn’t make you a good board. It makes you a very expensive cheerleading squad with voting rights and a fiduciary duty you’ve quietly decided not to exercise.

The cheerleading squad, for the record, is not what the members had in mind when they cast their ballots.

How It Happens (A Tragedy in Four Acts)

Nobody sets out to build a board that nods enthusiastically at everything. It develops gradually, through a series of individually reasonable decisions that accumulate into a collectively catastrophic posture.

Act One: A CEO who is genuinely talented arrives. The board, correctly recognizing this, gives them room. Room is good. Room is appropriate.

Act Two: Room becomes latitude. Latitude becomes deference. Deference becomes a standing pattern indistinguishable from a policy.

Act Three: Somewhere in that progression, the board stops asking hard questions — not because there are no hard questions, but because asking them feels vaguely disloyal, like questioning the chef at a dinner party they’re also hosting.

Act Four: A few board elections favor candidates who are enthusiastic about the credit union rather than skeptical in the useful sense, pushback is gradually reframed as negativity, and the board has quietly outsourced its judgment to the management team it was hired to oversee. Everyone is very pleasant about it. The members have no idea.

Curtain. Applause. Unanimous vote.

A Field Guide to the Generous Board

The generous board is hard to spot from the outside because it looks like harmony. Meetings run on time. Votes are unanimous. Strategic presentations land without meaningful challenge. The annual CEO evaluation produces a score that rhymes with “outstanding” and a salary adjustment that rhymes with “automatic.”

Here is how you know you might be sitting on one:

The last time a strategic initiative received substantive pushback was during a previous administration — of the credit union, not the country, though you may have to stop and think about it.

The CEO has learned to bring decisions to the board after they’ve been made, framed as updates rather than proposals, because the outcome is the same either way and this eliminates the awkward middle part.

The board’s version of a tough question is “That sounds promising — what’s the timeline?” This is then followed by appreciative murmuring and a motion to approve.

Questions that begin with “Have we considered the downside scenario” are experienced as vaguely hostile. They are not asked twice.

The annual strategic retreat produces a plan that is enthusiastically endorsed, framed in an attractive document, placed in a binder, and then consulted approximately never — until next year’s retreat, when it is replaced with equal enthusiasm and a better font.

Nobody in the room is unhappy. Nobody outside the room is protected.

What It Actually Costs

Here is where the generous board’s tab comes due, and it is not a small tab.

An organization without meaningful board oversight is an organization where the only check on strategic miscalculation is the CEO’s own good judgment. That is a lot of faith to put in any single human being. Great CEOs, notably, do not want this. Great CEOs actively want a board that challenges them, because they have enough professional self-awareness to know that unchallenged assumptions are where strategy goes to die quietly, expensively, and in ways that eventually end up in trade press.

What the generous board produces instead is an environment where risk accumulates unexamined, the CEO’s blind spots go unaddressed because nobody in the room has developed the habit of addressing them, and strategic drift is mistaken for strategic stability because everything looks calm from a altitude of zero feet, which is also the altitude at which you cannot see the cliff.

And when something eventually goes wrong — when the loan portfolio develops an interesting texture, or the membership numbers head quietly south, or the competitive threat that management has been privately anxious about for eighteen months finally arrives with luggage — the generous board will discover that support is not, in fact, a hedge against consequences.

The members whose assets they were elected to protect will discover this at roughly the same time. Probably through a letter.

Accountability Is Not the Opposite of Support

This is the part where some directors shift uncomfortably in their chairs, so let’s be precise.

Holding your CEO accountable does not mean distrusting them. It does not mean interrogating their expenses, auditing their calendar, or approaching board meetings with the energy of someone who has watched too many courtroom dramas and has always wanted a turn.

It means agreeing, in advance, on what success looks like — and then actually checking whether that’s what’s happening. It means asking the questions that are uncomfortable precisely because they matter. It means understanding that the highest form of support you can offer a capable CEO is a board serious enough to provide genuine oversight, because genuine oversight is what separates a well-governed institution from one that is one bad quarter away from a very difficult conversation with its regulator.

A board that never challenges anything isn’t kind. It’s decorative.

The members of your credit union did not elect you to be the CEO’s most reliable fan. They elected you to be the institution’s last line of defense. Those roles occasionally overlap. They are not the same job. Confusing them is not a culture. It’s a liability.

The break room chairs were never the point.

The point is whether your board is actually governing — or whether it has decided that unanimous votes, prompt adjournments, and the warm collegial glow of a room where nobody ever disagrees constitutes a governance program.

It does not. It constitutes a very pleasant way to let an institution drift.

Generous boards sleep well. Whether the members they serve can say the same is, interestingly, a question nobody at the board table ever thinks to ask.

[*Yes, all of these images were created with AI. All the cool kids are doing it. Don’t @ me, bro!]

#boardgovernance #boardeffectiveness #creditunionboards #accountability #CEOoversight #fiduciaryduty #boardeducation #governancematters

The 600-Dollar Question: When Board Oversight Becomes Death by Interrogation

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There is a moment that happens in credit union boardrooms across America. It is the moment when a well-meaning director leans forward, adjusts their reading glasses, and asks the CEO: “Why did we spend six hundred dollars on those new break room chairs?”

by That One Consultant You Hired and Then Ignored 

The CEO—who has spent the past week negotiating a $40 million loan participation, managing a core system migration, and quietly talking the compliance officer off a ledge—takes a breath. A long breath. The kind that has a legal team and a therapist on speed dial baked into it.

This is not governance. This is archaeology. And unfortunately, it is extremely common.

The Oversight Paradox

Here’s the dirty secret about board oversight: done poorly, it doesn’t protect the organization. It quietly suffocates it.

Oversight exists for excellent reasons. Boards are the stewards of member assets, the guardrails of institutional integrity, and the last line of defense against the kind of strategic disasters that end up as case studies in graduate school. Good oversight is invaluable. Necessary. Even heroic, on a good day.

But there is a version of oversight that has drifted—slowly, with the best of intentions—from “strategic accountability” into “interrogating the invoice for printer toner.” And that version is doing real damage.

The paradox is this: boards that ask too many small questions are usually avoiding the big ones. It’s easier to audit the break room chairs than to have a difficult conversation about whether the five-year strategic plan reflects anything resembling current market reality.

*To dig in further on why we do this, revisit our blog on “Bikeshedding and Boards.” It’s our brain’s fault.

A Field Guide to Interrogation Styles

For identification purposes, here are the most common species of oversight-gone-wrong, observed in their natural habitat:

  • The Archaeologist. Asks detailed questions about decisions made six to eighteen months ago. Loves phrases like “Wait, when did we approve this?” Finds comfort in relitigating the past, possibly because the past is safer than the present.

 

  • The Micromanager in Disguise. Frames operational questions as governance concerns. “I’m just asking” is their signature opener. Recently wanted to know why the CEO chose FedEx over UPS for a document shipment. (True story. Or close enough to be true.)

  • The Second-Guesser. Waits until a strategic decision has been made, implemented, and is showing early results—then raises concerns about it. Thrives in hindsight. Has strong opinions about the road not taken, mostly because they don’t have to drive it.

 

  • The Gotcha Questioner. Doesn’t actually want an answer. Wants to demonstrate that they spotted something everyone else missed. Questions arrive pre-loaded with implied conclusions. “Isn’t it true that…” is a preamble, not a question.

None of these directors are villains. They are, almost without exception, people who care deeply about the credit union and are expressing that care in the wrong direction. The problem is that their questions consume the room’s oxygen—time that could be spent on strategy, member impact, or the seven other agenda items patiently waiting their turn.

What This Actually Costs

Let’s talk about the real price tag, because it’s considerably higher than six hundred dollars.

When boards slide into interrogation mode, several things happen. First, the CEO and senior leadership start preparing for board meetings the way defendants prepare for depositions. Every decision generates a paper trail not because it’s strategically useful, but because someone will ask. Defensive management is expensive, time-consuming, and demoralizing. It is also, in a tragic irony, the least strategic thing a leadership team can do.

Second, risk appetite shrinks. If every initiative is subject to retroactive cross-examination, smart leaders learn to propose only what’s safe. Bold moves get quietly shelved not because they’re wrong, but because they’re hard to defend under fluorescent lights to an audience with a prepared list of skeptical questions.

Third—and this one is genuinely painful to watch—good CEOs leave. Not dramatically, not all at once, but gradually. They stop bringing their best ideas to the board because the board has trained them not to. Eventually they bring their ideas somewhere else. Often, that’s a different credit union.

The Question Behind the Questions

Here is something worth sitting with: when a board asks too many operational questions, it is almost never really about the operations.

It’s about trust. Or the absence of it.

When a board genuinely trusts its CEO—when there is transparency, consistent communication, and a shared strategic framework—operational minutiae stops being interesting. The chairs cost six hundred dollars? Fine. The CEO made a call, the call was reasonable, let’s talk about the loan-to-share ratio.

But when trust is thin, everything becomes a data point. Every expense is a clue. Every decision is potential evidence of something. The interrogation is really a trust deficit wearing a governance costume.

If your board is regularly diving into operational weeds, the most useful question isn’t “Why did we buy those chairs?” It’s “Why don’t we trust the person we hired to make that call?” That conversation is harder. It is also the only one that actually fixes anything.

What Good Oversight Actually Looks Like

Good oversight asks hard questions—at the right altitude. It is the difference between “Why this vendor?” and “Does our vendor management policy reflect current risk exposure?” One is a transaction. The other is governance.

A few principles worth adopting:

  1. Ask about policy, not purchases. Your job is to ensure the right frameworks exist—not to audit individual decisions made within those frameworks. If the CEO has spending authority up to $25,000, don’t ask about the $600 chairs. Ask whether the spending policy itself is still fit for purpose.
  2. Interrogate strategy, not symptoms. The second-guessing instinct usually points to a real concern buried under an unhelpful question. Surface the real concern. “I’m worried our operating expenses are drifting” is a governance conversation. “Why does the coffee machine cost this much?” is not.
  3. Distinguish accountability from hostility. Accountability means holding leadership to agreed-upon standards, with transparency and fairness. Hostility means treating every board meeting like a deposition. One builds a stronger organization. The other builds a stronger résumé for the CEO’s recruiter.
  4. Build the trust infrastructure. Regular CEO evaluations, transparent dashboards, clear strategic KPIs, and an open-door culture for candid conversation—these reduce the need for interrogation because they replace anxiety with information.

Closing Thoughts: The Right Questions Are Hard

There is a version of your board that asks fewer questions and governs more effectively. That board has done the hard work of building trust, aligning on strategy, and distinguishing its role from management’s. Its questions are rarer, sharper, and more consequential. Its CEO sleeps better. Its members are better served.

And yes, it probably has nicer break room chairs. Because someone made a reasonable call and nobody needed to schedule a follow-up to discuss it.

The goal of governance isn’t to catch the CEO doing something wrong. It’s to make sure the institution does something right.

Those are very different jobs. It’s time more boards knew which one they showed up to do.

Your Budget is a Statement of Values: Treat it with the Appropriate Diligence and Respect

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The annual credit union budget is a statement of its values, the things the organization thinks are important. The values in that budget should reflect (and be directly tied to) the strategic plan that the board and senior management has developed together. It is critical that the board have a clear understanding of how the budget has been shaped, and takes pains to make sure that it’s appropriate.

Kevin Smith

I’m pretty sure that the fact that I’ve picked May to write about the budget is some sort of Freudian avoidance of trauma approach given what I’ve been through. I’ll be curious to hear about how you feel about the budget cycle. You’ve gathered some insight as to my feelings. Here we are in May, headlong into the 2023 budget but pretty far from next year’s budget development. That feels pretty safe. But come November things get a bit more messy.

Politicians from all sides and businessfolk like to spout the aphorism, “A budget is a statement of values.” And I agree with this. Where you’re putting your dollars reflects where your priorities are. But I’m not always sure how closely board members follow this idea even when they agree.

Stereotyping

Here’s my broad stereotype from lots of experiences in this area: The board and senior management do their strategic planning sometime in the fall. Then not too long after, the CEO, after some voodoo, witchcraft, and pencil chewing with the staff in a secret room, submits a draft budget to the board that they will finalize by January. The board reviews the draft budget mostly by looking at the big round numbers on the right side of the page, and the amount and percentage that they went up from last year’s number. They ask a few questions for clarifications and it’s off to ratification/approval.

For Instance

Let’s play the “for instance” game. For instance, your strategic plan suggests that the organization is going to have to build a new focus on wealth management services for your older membership to keep them at the credit union. Building that out as a new service is going to require funds. The board should make sure that’s reflected in the budget.

For instance, the strategic plan involves a shift from front line staff to a heavier call center approach, but also a focus on sales and service. I’ve seen this one play out in a variety of ways where directors completely understand the amount of $ that goes to technology for the call center, but not get why the training budget has doubled and salaries for call center staff have to be raised. (Sales and service skills require a LOT of training and proper rewards.) Here’s the curve ball – six months later one rogue director yells after a trip to the lobby, “what do you mean we don’t have any money for MSRs?!?!” Because he hasn’t internalized the values that the budget reflects and are tied to the strategic plan.

What Should Board Members Do?

The review of the budget should be an exciting event, not a perfunctory task once a year met with a yawn. (I know. Some of you are skeptical.) The board’s efforts here are to ensure that the values of the organization are given the priority that you have discussed and agreed upon. To make sure that the budget is tied to the strategic plan in a noticeable way. It sounds like I’m inviting the board into the operational weeds to nitpick. Nothing could be further from the truth. This is a call for thoughtful analysis of the budget at a strategic level.

  1. Don’t underestimate the pain and suffering that may be involved when the staff creates a budget. Respect the process and the analysis they give you.
  2. Ask thoughtful questions about how the budget is tied to the plan, not just “why did line 12 go up so much?”
  3. Reel in your rogue directors if they aren’t getting this. (I know that some of you are thinking about how you understand this but there’s that one director on your board who just doesn’t.) It’s your job to hold them accountable and make them understand, for the sake of your CEO and staff.
  4. Make sure you incorporate ranges for results. The budget is not a crystal ball. This also means that you need to know how to adjust when the environment has changed along the way.
  5. Be prudent with the members’ money, which is not the same thing as being cheap with the members’ money. Support thoughtful investment and make sure that you understand what it costs to do business these days. (Versus comparing everything to the value of your first car, house, candy bar from decades ago.)

The annual budget is as important as the strategic planning process. In fact, they are intertwined. Often the budget gets short shrift. Don’t let your eyes glaze over in the volume of numbers in the spreadsheet. Get excited about the promise of value to the members that you instill in the budget and provide support to the CEO to execute this vision.

Board Members and Staff Surveys: Yes, get them AND be careful!

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The staff survey is a long-standing, valuable way to get feedback about the organization for all involved, top to bottom. Board members should absolutely pay close attention to them, but they should also be very careful with them. They can be misleading.

By Kevin Smith

Board members are you getting the full value that the CU can get from the staff survey? Are you getting the results and do you know what’s being done as a result of the information? The value of staff surveys can be tremendous, for all involved. If you’re not using them, you’re missing out. But simply running a survey every year and “using” a survey to its full effectiveness are two very different things. Often, in the TEAM Resources experience, the board is not seeing the full value of this resource; they could be getting significantly more out of them. Boards must make sure they know what they’re looking at and how to understand the context of the survey so that they interpret the results correctly. It’s trickier than it sounds.

Value to Staff

  • Being heard
  • Being part of transparent two-way communication
  • Building a trusting environment

Staff members may or may not appreciate the survey. It depends. If there’s an annual survey but then no one ever hears about the results, then much of the value is gone. The board and management may be getting some great insights, but that’s one-sided value. There’s much more value if everyone hears about what the results are and, most importantly what action is happening as a result of information in the survey. (No this is not a knee jerk reaction to say that if the staff complains about stuff in the survey they automatically get what they want.) It does mean that, at an absolute bare minimum, the staff needs to know by clear communication and acknowledgement, that they have been heard by the board and senior management. And when the staff sees something, any kind of action, that comes as a result of the survey, it signals that the leadership is paying attention to some details. (You’d be surprised at how often this doesn’t happen.)

Real Scenario I’ve seen – We finally got around to the staff survey. We fully intended to share the results with everyone and to talk about the results. Then we got the results and they were really yucky. Someone then decided that we could no longer share them. They got buried.

Value to the Board and Sr. Management

  • Insights into the culture of the organization, good, mediocre and bad
  • Feedback that the board uses for their oversight of the CEO – among many other feedback options

Board Usage of the Survey Results

In general, I see the staff survey used by boards of directors as part of the governance feedback mechanism. That’s a great thing. Boards that have a wide range of feedback tools that are regular and easy to interpret are more likely to stay at the strategic level and less likely to micromanage or spend too much time “in the weeds.” This is one of many feedback tools the board needs.

And very commonly, board members use the staff survey as a CEO oversight tool. The responses provide a temperature gauge of the climate within the organization. Are the employees content? Do they find meaning and purpose in their work? Do employees feel like they are making an impact, moving the needle towards the stated goals? Are their roles clear? Are their operational and emotional needs met? Are they gruntled or disgruntled? All of which reflects on the CEO to whom you’ve delegated operational authority.  

Warning to Board Looking at Survey Results

Given the board’s distance from the staff in general, it’s important for directors to know how to look at staff survey results. This means that board members will need to get some context to the survey. There are many factors that can affect these results that the board will need to have a handle on.

For example: A new CEO (or new Sr. management member) … will cause some vibrations. This could be good shake up or simply time for settling in. If you hired a new CEO to make overdue changes, you can bet the survey results are going to be affected as well. But consider carefully the timing and the context to understand how they may affect the survey results.

The board may also need to take note of homogenous results. It may be counterintuitive but “Everything’s great” survey results may need some drill-down. Yes, it’s very easy see that kind of result, smile and move on. However (comma) in some organizations, particularly small ones, no matter how anonymous the claim of the survey is, there is sometimes a serious reluctance for employees to express their concerns honestly. Individuals fear that their comments will be transparent.

Sometimes this slips out when a director has a one on one conversation with a staff member that starts out casually. This is dangerous territory and the board should tread carefully. Anecdotal evidence is not a trend. Staff members grabbing the ears of board members is not a healthy communication method. But it may just reveal that there is not a safe enough environment for people to be honest about what’s going on. Which means it may be time to start asking questions.

*Sigh* Nothing is simple, is it?

Now What?

  • Surveys are valuable.
  • The board sets the tone at the top.
  • Consider results carefully.
  • Communicate widely and through the appropriate channels.
  • Make sure people feel heard.
  • Take heart when people tell the whole, ugly truth. It can show that they care about what happens to the organization.
  • Be willing to listen, and really
  • Foster transparency, dialogue and culture of safely and support.
Dedicated to YOUR Success . . .

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