Governance & Mergers … or Mergers & Governance

shhh image

Shhh

D’oh! I just said the “M” word. Shhhhhh! We don’t want to talk about that. The leadership in the credit union movement treats merger talk as verboten. You don’t see much on conference agendas, or on webinars. And I get it – talking about it might come across as endorsing it, and there’s a school of thought that says that more credit unions are better for the industry.

Well…it’s no secret that there are a LOT of credit union mergers. According to the NCUA, there were 234 mergers in 2015, which actually represents a slow down of late.

The Role of the Board Chair

The Role of the Board Chair

Recently I had the chance to spend some time with a great group of board members at that National Association of Credit Union Chairmen (NACUC) – Leadership Development Seminar. One of the things we talked about was the role of the board chair. I thought this well worth putting down on *paper* as it were.

The role of the chairperson is multi-faceted, complex, and often changing within the context of the organization’s dynamic. Unfortunately, there’s no perfect set of “rules.” But there are some guidelines. Here are our “tips” on navigating the position successfully:

Board Chair

Board Chair

Roles:

Facilitator – The board chair must draw together the individual directors into a team, working together on behalf of the membership and the credit union. To do that, s/he must wrangle individual personalities, draw out conversation from some, and rein it in from others. Having a solid understanding of the personalities of each director … and the CEO helps the chair keep things on track, moving forward, and civil.

Leader – Wait! Isn’t being a leader at odds with being a facilitator? Isn’t this a contradiction? No. There are times when the job is pure facilitation and times when it is leadership and setting direction. A skilled leader will know which is which and be able to handle both without perceptions of contradiction.

How to Make the CEOs Job More Difficult Than It Has to Be

Guest Post by TEAM Resources Publisher, Kevin Smith

Nobody disputes the fact that credit union CEOs have tough jobs. There are millions things to keep up with in a challenging environment; technologies, economics, regulations, leadership, staff issues and development … oh yea and “managing” a board of directors made up of volunteers who Untitled(generally) don’t have backgrounds in financials institutions. The not-for-profit, cooperative model with a volunteer board of directors is part of what makes credit unions so very awesome, right?

So, why do so many CEOs make their own jobs more difficult when it comes to the board?

“Just what am I getting at?” you ask. Well, I’ll tell you, and thanks for asking.

Two Areas to Evaluate Before Nominating a Board Member for Reelection

(Incumbent, Schmincubment! Show me your worth!)

by Tim Harrington

“Sadly, boards are more likely to replace a CEO than oust one of its troublesome board members.” Beverly Behan, Public Companies Board Consultant

Let’s let that quote sink in for a minute. With too much frequency incumbent board members are up for re-election in (often) uncontested elections, despite the fact that the board member may be lacking in skills, harboring a grudge that is toxic to the boardroom, or he/she has for whatever reason become the Achilles heel of the board and the organization.

Kicked outWhy is that?

Often it’s out of simply conflict avoidance. But “politeness” is not a good reason to undermine the effectiveness of an organization. Remember – directors have duties of care, loyalty and obedience for the best interests of the credit union. This sometimes requires difficult conversations and confronting issues head on.

But that doesn’t mean it’s easy.

Assessing Toward a Better Board (or What’s Behind That Word?)

By Kevin Smith, Publisher, TEAM Resources

Let’s face it – when I hear the word “assessment” it takes me back to middle school standardized tests, some of which took days, and all of which raised anxiety for everyone in the building, students and teachers alike. No, “assessment” is not my favorite word. Flash forward to a graduate-level education course in assessments. There I learned why they’re so anxiety inducing. (I’ll skip that 16-week tangent for now. You’re welcome.)

Building Your Business Model to Create a Market Advantage

Can you strictly define your business model? Your competitive advantage? If you say, “We are a full service credit union, and our competitive advantage is our great prices and our member service,” then you are missing the boat.

Being a credit union is not a business model; it is a charter type. Being “full service” doesn’t really answer anything. Sears is full service, yet they struggle to compete in the new, complex marketplace. While offering great member service with the best price is sound wisdom, it is seen by many experts and almost mutually exclusive.

Let’s breakout out business models and competitive advantages in five delineated areas:

Effective Leadership by Your Board

How well does your board “lead” your credit union? Leadership by the board is very different from leadership by management. As a matter of fact, leadership by the board requires a different skill set than leadership by management.

Boards govern. What does that mean? It means they don’t “operate.” I know that doesn’t answer the question, but it is an important point. The area of Operations, led by the CEO, is day-to-day activities requiring active and present oversight.

Becoming a Strategic Board

Generally, boards do two things that have a positive impact on their organizations:

  1. Plan strategically; and
  2. Hire a competent CEO who is accountable to the strategic plan.

Nearly any other things the board involves itself with will have either a neutral impact or a negative impact. Unfortunately, the neutral impact list is rather short.