Here's what a top board leader needs to know to be successful—and what you need to know to help.
Credit union boards often talk about ways to orient new directors. Many lament not having a defined process. Others have the CEO give an orientation on the credit union and its management team that doesn’t go so deep as a true board orientation. Such limited approaches leave new board members adrift in uncharted seas, and it can take years for them to find their governance sea legs.
Another vital orientation process gets even less attention—the one for orienting new board chairs. Be honest. How much time have you given to thoughtfully defining the role of the chair and then—as objectively as possible—assessing and orienting the person who would best fit the role moving forward? If you are like most credit union boards, the answer is, unfortunately, “We really don’t do that.”
Most CUs—maybe including yours—can do better with chair orientation. A first step for all directors to consider (since they could all become chair eventually) is to define the responsibilities of a chair, so your CU can map training to what the chair needs to know. Here are six key things your “board manager in chief” needs to be able to do or support.
1. Build a Positive and Healthy Board Culture and Structure
Being able to meet this responsibility is driven partly by the chair’s character, values and beliefs. The culture of your credit union over the years also plays a critical role. But do not rely on your credit union’s culture alone. The incoming chair must buy into the current culture wholly and add to that his or her own commitment to a healthy and deepening culture.
On the structure front, ensure that your board chair commands a keen knowledge of governance best practices, including roles and responsibilities of board members and officers, committee structures and charters, board meetings and information architecture.
2. Inspire and Engage the Board
Inspiration is the ability to “fill someone with the urge or ability to do or feel something, especially to do something creative.” Is your incoming chair an inspiration? Does he or she bring personality, charisma and values to the table? Are they, themselves, inspired to lead?
Beyond the personal, ensure that your board chair is adept at building relationships, reading people and identifying a match between skill level and challenge. Add to these skills the right committee structure, clear charters and appointments to those committees based on talents and interest, and you have a great recipe for engagement.
3. Set and Model High Standards for the Board and Staff
Some education about ethics and compliance issues will be necessary. We are finding more and more that credit unions would benefit from maintaining a code of ethics (also called a code of conduct), and we encourage you and your board to consider the development of one. Ensure that your incoming chair understands the difference between ethics (standards of conduct or principles arising from an organization’s core values about how we ought to act or decide) and compliance (following or obeying a law, rule, regulation, policy or procedure). Both are important and both need to be adhered to by the board and staff. Finally, ensure that your incoming chair embodies and adheres to the highest ethical standards and practices. Not only will your board members be watching, but the staff will take note (and follow suit), too.
4. Craft and Effectively Facilitate Meetings
Everyone thinks this is the easy part of the job. But trust us, it’s not. Of the credit union board and staff that we’ve surveyed, only about a third believe that they do a very effective job of allocating enough time at board meetings to discuss important strategic issues, and more than a third of the same respondents report that they are doing a less than effective job of achieving the right balance between strategic versus operational discussions in the boardroom.
Effective board meetings begin with the creation of the board agenda—a task best practice assigns to the board chair and the credit union’s CEO. How often do you ask “What’s the purpose of the next board meeting?” A board chair should be trained in strategic thinking and planning, to ask good (and hard) questions, and to keep the big picture in mind.
Seldom, if ever, do board chairs receive formal training on meeting facilitation. This can be worthwhile. Also, consider exposing potential chairs to leadership roles at the committee level. To help develop potential chairs, you might also identify portions or segments of board meetings that could be facilitated by vice-chairs and other emerging leaders.
5. Act as the Key Liaison With the CEO
Some management experience or awareness of basic HR principles will be helpful as your board chair gets started in the role. This difficult task is made more challenging by the fact that the CEO does not report only to the board chair. The board as a whole has the power to hire or terminate the CEO, and thus, the CEO reports to the full board, not just one individual or committee. But the chair does play a critical role in the board-CEO relationship. He or she should serve as the coordinator of activities between the board and the CEO—setting a tone for communications, helping to identify priorities and providing high-level guidance and counsel as needed.
The chair should also ensure that a fair and effective process of evaluating the CEO’s performance is regularly conducted. Such a process should be transparently agreed upon by the board as a whole—and the CEO. The evaluation should be one where all board members provide genuine input—not just the chair or a small subset of the board.
6. Serve as One of the Credit Union’s Chief Ambassadors
In partnership with your credit union’s CEO, your board chair will be expected to serve as an ambassador-in-chief. Rarely does a chair ascend to the position fully briefed and trained on how to deal with the public, let alone the media. This position will require that and much more. Consider formal training on dealing with the media and communicating with the public.
Ensure an ‘Optimal’ Chair
Now that you’ve defined the job, you will want to ensure that your incoming board chair’s skill level matches the requirements of the job.
Do not just assume that the current vice-chair is ready to be chair or is the best person to assume the position at any given time. Some vice-chairs are great in the vice-chair role but falter when they take the helm. This is particularly the case if they have not had the experiences or training designed to assist in making the transition as smooth as possible.
Further, be mindful of the state of your credit union when identifying a new chair. If you are in the midst of a big merger or acquisition, it would be great to have someone in the chair role who has experience with such endeavors. Similarly, a candidate for chair with a background in human resources may not be the perfect person to lead the credit union through a financial crisis but might be a terrific resource if you are experiencing rapid growth or a major shift in the management team.
Clearly, a great chair for one period of time in your credit union’s history might not be the right chair as circumstances change. It reminds us of the title of a great book by executive coach Marshall Goldsmith: What Got You Here Won’t Get You There. Being board chair demands a high degree of responsiveness that is particularly vital in times of swift and unpredict-able change. Credit unions need a chair that can effectively steer the board in a manner consistent with the rapid changes impacting your credit union, as well as being the right leader for where your credit union is on its unique journey.
Finally, be sure to institute a mentoring program for emerging leaders, including your chair. Consider including your immediate past chair or an effective chair emeritus in the process. Individuals who have “walked the path” can be tremendous resources for those just beginning their journey. It can be lonely to be chair. If a mentor is not available, consider a coach for your new chair. Much like executive coaches for CEOs and other credit union senior staff, coaches can be helpful in guiding new chairs to acclimate and flourish in their new role.
Very few board chairs come to the job fully trained and ready to go. Most of what your current board chair knows was likely learned on the job. But you can change that for future chairs and help them (and your credit union) step up to success.
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.
Jennie Boden is the firm’s managing director of strategic relationships and a senior consultant. She has 25 years of experience in the national nonprofit sector and served as the chief staff officer for two nonprofits before coming to Quantum Governance.