There's no one-size-fits-all answer to how many directors you need.
One of the questions I’m asked most often by credit union directors and CEOs is this: “What’s the best size for our credit union board?”
There’s no fast and easy answer but, essentially, you want your board to be large enough so you can appropriately govern and help lead the credit union, and yet small enough so you function effectively as a cohesive leadership team. For your credit union, what size might that be?
Our experience is that credit union boards of seven, nine or 11 appear to be most effective. Here is the essence of our reasoning:
- Boards of five or fewer are efficient but committee work, diversity and inclusiveness may suffer. With five or fewer members, the work of the board tends to be accomplished as a “committee of the whole.” This framework may be sufficient for certain small or relatively uncomplicated credit unions, but it quickly becomes a very real and limiting factor when considering how much work a small board can realistically accomplish.
While we do not believe credit union boards should have an excessive number of committees, it does increase the board’s capacity to accomplish vital work when directors can divide themselves into a few committees and task forces. Having committees and task forces also helps develop a somewhat larger group of volunteers who can be potentially called upon to become board members in the future.
Additionally, credit unions are cooperatives of many different types of people. What very small boards of five or less offer in terms of ease and efficiency, they typically lose in terms of diversity and inclusiveness. This lack of diversity is evident not only in terms of gender, nationality and race, but also will likely result in a lack of individuals who are of a different age or who can bring additional, valuable skills, perspectives, experiences, and the like to the board’s efforts.
- Boards of 12 or more can be complicated to manage, can pose challenge to trust-building, can be more expensive to run, and can make it harder to gain true consensus. Boards of this size do exist in the credit union community, but they are rare.
They often arise for such reasons as : (1) mergers and acquisitions that combine two boards; (2) a desire to offer more members the opportunity to serve; (3) a lack of will or desire to “kick” long-term colleagues off the board as new members are added; and (4) a “representative mindset” that supports having a board with folks from a variety of stakeholder groups or geographic areas.
If your board is on the larger size, do not let the executive committee become a “board within the board.” It will upset the balance of power, and often results in an “insider” vs. an “outsider” dynamic that can cause some directors to be too passive or disengage altogether.
In all, size is a nuanced question, with a nuanced answer. The exact size that’s best can shift from credit union to credit union depending on many factors, such as the role the board is playing, the number of board committees, the complexity of the credit union, the history of the credit union, and the quality of its leadership.
In the end, keep in mind that the role of your credit union’s board is to govern in constructive partnership with your CEO. In most circumstances (as long as you remain in the sweet spot of between seven and 11 members), the exact number of board members ends up being less important than your directors’ collective ability to work effectively, add real value and help move the mission of your credit union forward.
Michael Daigneault, CCD, is CEO of Quantum Governance L3C, Vienna, Va., CUES’ strategic provider for governance services. Daigneault has more than 30 years of experience in the field of governance, management, strategy, planning and facilitation, and served as an Executive in Residence at CUES Governance Leadership Institute. Quantum Governance fields more engagements in the credit union community than in any other, more than 40 percent of its total client projects.