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.

Consider two areas when the re-nomination discussion comes up:

  1. Knowledge and the Effort to Obtain Knowledge
  2. Director Behavior

Let’s take the emotion out of this discussion. And let’s objectively evaluate the incumbent to see if he/she really deserves to remain on the board. It’s about value to the organization, not whether you like the person, or whether it’s easy to confront a troublemaker.

Knowledge and the Effort to Obtain Knowledge

Has this director taken seriously the need to understand the credit union’s financials, the changes in the industry, the best practices for governance and strategy? Directors who are not keeping up are a liability to the organization. Simply making an effort to keep up will show.

Director Behavior

Does this director come to meetings prepared? Exhibit appropriate behavior? Contribute to the conversation (in a beneficial way)? Does he or she avoid personal agendas? Keep the best interest of the credit union in mind?

These are measurable items that will help you keep focused on what is in the best interest of the credit union. By removing the emotion of the personal connection you may have to a colleague it should become clearer what is in the best interest of the organization.

Re-nomination is not a given. Nor should it be an expectation…though it often is. Re-nominating a “problem” board member is an action that is on par with being a “problem” board member, as you are not acting with true loyalty to the organization first.

If your response is that it’s difficult to find people to run for the board … then we need to have another talk. That’s a different issue, for a different day. But it’s not a good excuse.

Here’s our full checklist for re-nomination. Give it a try. Re-Nomination of Director Checklist PDF

Ready to argue this? I’d love to hear from you. Add your comment(s).

Tim Harrington, CEO
TEAM Resources

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4 Comments

  1. This is a good one! We are well past time to evaluate the director nomination process, changes need to be made. Incumbent, Schmincubment! Show me your worth! LOVE IT!

  2. In my opinion, this is much trickier than just having a checklist that needs to be fulfilled. For example, it may be that a board member’s “behavior” is acceptable to some, but almost intolerable to others. This can be compounded by the possibility that what the errant director has to say might be quite valuable under other circumstances. So what happens in this situation? Often it can lead to open warfare, which is the first stage towards having a dysfunctional board. Has anyone had this happen to them? And what did they do?

  3. Kevin Smith

    You’re absolutely right Terry! The checklist is a starting point for greater conversations that we don’t see happening often enough in credit unions. Your example is a good one that requires open, honest and … difficult dialogue. I’d love to hear from others with the issue that you describe.

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