- Hispanic Resources
“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.