Top takeaways from this summer's CUES Governance Leadership Institute: the role of the chair and two ways to find success in court.
Tyndall is very fortunate to have a board that encourages and realizes the importance of board development. This past June our board sent several directors and the CEO to attend the CUES Governance Leadership Institute™ at the University of Toronto. Among the many highlights of the three-day event was an opportunity to participate in candid class discussions about the leadership roles of the board chair, and to become better educated about legal considerations confronting credit union boards.
Role of the Chair
A strong board chair puts energy into fully examining issues, managing directors’ interactions, and minimizing conflict.
It is not uncommon for a credit union board to seek and interpret information in support of established ideas and assumptions. An important role of the chair is to reduce this “confirmation bias” to ensure the issue or decision is examined from many perspectives.
Boards can suffer when discussions are dominated by an individual voice, causing other directors to “self-censor” and not offer an opposing view. The chair can mitigate this situation by drawing out individuals during a meeting and emphasizing the duty of a director to vote his or her own conscience.
In addition, a chair’s role is to minimize conflict of interest influencing a board vote.
Two Legal Considerations
Purpose and pitfalls of board minutes. According to the Rotman School of Management professors who presented at the institute, the purpose of board meeting minutes is to be a historical document that reflects the board’s rationale. Minutes are not designed to capture an individual director’s commentary or to document an idea or point of view that wasn’t supported by the board as a whole.
Notably, minutes are discoverable, which means they can be called into a court of law by legal counsel. “Unofficial” minutes include an individual’s notes, written in the margin of meeting documents. Our Rotman instructors stressed the importance of destroying “unofficial” minutes, as they can be highly subject to interpretation in a way that does not favor your organization in a law suit.
Power of process. In the past, the test of a board decision was largely determined by its outcome. Today’s courts are expanding their investigations to determine if the board delivered on its “duty of care” and “duty of loyalty” to the membership during that decision.
Boards must be able to demonstrate that they have reviewed sufficient research, given the decision due process, and devoted enough time and consideration to the decision-making process. Our instructors recommended that if you don’t know and you don’t need to make a quick decision, take your time. There’s no advantage in deciding now. Use your time; it’s an asset. Think about it another month, another week; put a working group together.
Better Your Board
We recommend all board members who are serious about improving board performance attend CUES Governance Leadership Institute. CEOs who accompany them will learn great strategies to support their board members in leading their CUs to success.
Jim Warren, CCD, CCE, is president/CEO of $1.2 billion Tyndall Federal Credit Union Panama City, Fla.; Mindy Rankin, CCD, is treasurer; Tommy Ford, CCD, and Richard Millett, CCD, are directors.