By Frank J. Diekmann
I challenge you to find any aspect of credit unions that is more of a paradox than volunteer boards of directors.
CU boards are:
- Absolutely core to what differentiates CUs from the for-profit charters, and yet viewed as an anachronism by some or viewed as some sort of necessary evil by others.
- Highlighted in every press release and letter sent to Capitol Hill by the trade groups, yet all but invisible on those same association’s own boards of directors and meeting agendas.
- Made up of individuals who generously give up their own time, often for little reward, as well as those who frankly don’t do much and seem to be in it for the perks.
- Also made up of experienced, insightful, business-savvy individuals, as well as those that make you wonder (especially if you read the merger disclosure forms filed with NCUA) if they ever looked out the window.
- Often the ultimate difference-maker in whether a credit union prospers or dies, and yet most members (let’s be honest) don’t know they exist
- And in perhaps what is the biggest paradox of all, it is those boards that realize the vital importance of new (and younger) blood that institute term limits, and yet it’s those see-the-bigger-picture types credit unions can least afford to lose.
Impressions from Meeting
I was struck by all of that and more during the near-week-long Volunteer Leadership Institute hosted by Rochdale last week at which approximately 500 credit union volunteers were on hand. Yes, it was in Kauai, and I wouldn’t be surprised if your first thought was “junket” (and there is plenty of that in credit unions for both volunteers and professionals), but this has always been a group that is engaged in the discussion and highly interactive from the opening remarks to the last session. And there’s no golf tournament.
It was also a room that mirrors the changes taking place in credit unions. By a show of hands there were only a few CUs of under a billion-dollars in assets who were sporting lanyards, a fact that, given the location and the expense, probably doesn’t knock off your lei.
The Role of the Board
The role of the board at a billion-dollar-plus credit union, as well as those who serve on it, is vastly different from that of a much smaller credit union. I think it came as a surprise to many when Tom Sakash, the manager of Small Credit Union Initiatives at America’s Credit Unions who spoke to VLI, shared that there are still about 800 credit unions of less than $5 million in assets in the U.S. That observation came as Sakash shared some examples of partnerships between large and small CUs that you can read more about here.
The biggest challenge for board members at a large credit union is to remember the small folks—that is, to come down from that board room on the top floor of the headquarters and consistently connect with those on the ground who are the reason the place was chartered in the first place.
That brings me to another paradox when it comes to CU board members: They are simultaneously insiders as well as outsiders. Or at least that’s the perspective they should bring. When you no longer have fresh eyes (and if everyone on the board has bifocals, I mean, c’mon), their value in representing a changing membership and its life experiences is limited.
A Truth Bomb
Much to her credit, during a panel I had the pleasure of moderating, Becky Reed, the former CEO of Lone Star Credit Union in Texas who now leads a fintech, dropped a truth bomb on her audience when she said too many boards have made it way too difficult for candidates to win board seats (talk about voter suppression!) In other words, board incumbents go into “elections” with the same certainty Vladimir Putin has about the outcome. And if you’ve got something in common with Vlad, well…
Reed challenged her audience to go home and do better by the members.
Separately, NCUA Chairman Todd Harper, in remarksthat touched on numerous issues, noted that when it comes to DEI, diversity also refers to age.
Deserving of Credit
None of this is meant to demean those who volunteer to serve on credit union boards—in fact, just the opposite—and that’s most especially true at smaller CUs, where there is a lot more hands-on work to be done, the board packets can be long and the “perks” might include a trip to a league meeting, even though in many cases even that’s too much of a budget strain and, if they’re lucky, the volunteers will receive a logo golf shirt.
No one should be in it for the golf shirt, the league meeting or even a trip to a tropical paradise. The job description—and there should be one in place for volunteers, too--is all about helping fellow members to improve their lives and to make the community a better place.
There are outliers, of course, but my general impression is that for most volunteers at credit unions, the swag isn’t why they got into it. I always find it interesting when talking in the hallways or at lunch to discover the various walks of life board members have travelled, the experiences they bring to the board table, and their desire to give back.
Less encouraging is meeting so many who readily know their CU’s asset size, but not how much value the credit union returns to members—a shortcoming every bit as true among professionals, as well. You say the credit union is better than a bank? Exactly how? And no, “we offer better service” is not an option.
The Ultimate Paradox
I have written here frequently on the mergers taking place in credit unions; mergers often driven by an unfortunate lack of any succession planning for the CU’s manager or president. But succession planning for the board is just as critically important, even though it will certainly involve some uncomfortable conversations. But what could be more uncomfortable than the ultimate paradox-- volunteers at a financial cooperative who never cooperated and who voluntarily allow their credit union to whither away?
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords.