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.