Giving Good Governance

Filene fellow stresses the importance of continuity in leadership.

July 01, 2011
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“If one of the most important roles of credit union boards is to select, compensate, and evaluate well-qualified CEOs, why do so many boards not have CEO succession plans?” Bob Hoel, Filene Research Institute senior fellow, asked ACUC breakout session attendees Tuesday afternoon.

“Continuity of leadership is extremely important for your credit union, and everyone should have a CEO succession plan,” he says.

In additional to succession planning, credit union boards need to:

  • Monitor the credit union on behalf of members;
  • Maintain an attitude of constructive criticism, ask probing questions, and demand accurate answers;
  • Act with integrity and diligence, and commit to long-term member value;
  • Ensure the board has the right mix of skills and expertise to enable effective oversight.

“Look around your boardroom,” Hoel advises, “If everyone looks just like you, you probably need a greater diversity of skills and expertise.”

  • Understand the credit union movement and the broader financial services industry.

“Have you been to a Wal-Mart Money Center?” asks Hoel. “That’s where the action is, and that’s where your future members are.”

  • Participate in strategic planning. Develop, review, monitor, and understand your credit union’s strategic plans.
  • Oversee the credit union’s risk plan and disaster preparedness; and
  • Minimize board/CEO conflict by building trust and not micromanaging, understanding the board’s roles and boundaries, and resolving conflict as early as possible. Conflict, if left unaddressed, almost always gets worse.

Hoel encouraged attendees to do everything they can to increase the number of members who attend the credit union annual meeting. “Usually these things are pretty dull and uninteresting, but they don’t have to be. Make them fun, give things away, and make them promotional extravaganzas for your credit union.”

Hoel cites Tarrant County Credit Union in Fort Worth, Texas, which attracts 500 to 700 members to its annual meetings, even though it’s relatively small with $60 million in assets.

Hoel said organizations actually discourage stakeholder/member involvement when they:

  • Don’t disclose executive compensation;
  • Don’t disclose merger offers; and
  • Tightly control the board nomination process.

He encouraged attendees to make their credit unions more transparent to build stronger member trust.

Northwestern Mutual, for example, invites five or six policy owners into its home office every year and gives them full access to the company and its records. The policy owners then write reports about their experiences and their unedited reports are published in the company’s annual report.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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