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Board Governance – The Challenge of Credit Union Board Governance


In 40+ years working with credit unions, I have had the opportunity to work with literally hundreds of Boards. The most valuable experiential lesson of those years has occurred in the last five. My epiphany occurred during a CEO succession discussion. In this case, the CEO had given the Board a time-certain for their retirement. This made the succession discussion “real time”.

The Board asked me to assist them in developing a plan for assessing potential candidates for the CEO position. This was essentially a “pre-search” process. All Board members understood the enormity and importance of the task ahead – choosing the next CEO. Their task was even more challenging since they were charged with replacing the current CEO, a long-term veteran in the Credit Union movement, revered by staff, management, the Board and members of the credit union.

During discussions with the Board, a longtime client, I told them that I would provide them the tools and perspective to maximize their potential for success. The process began with a meeting with just the Board. Considering my relationship with the credit union, the CEO trusted me to meet to with the Board in an executive session. It was during that session that I had my epiphany.

This was one of the first times that the Board met with a consultant without the CEO. They moved from somewhat uncomfortable to very open and candid in a short period of time. Their candor led to a realization that most of their time in Board meetings was spent reacting to the initiatives of the CEO. This is entirely understandable since the CEO is the only one immersed in the complexity of the organization and the increasing competitiveness of the financial services industry. However, during the discussion each Board member sated a belief that they owed the members more productive engagement at all Board meetings.

Now, this board is tasked with their single, most important responsibility. Choosing the next CEO for a complex financial cooperative operating in a fast changing and increasingly competitive world. This is one decision where the CEO can offer some guidance and perspective, but the ball is squarely in the Board’s court.

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