Use them to increase your board’s focus and effectiveness.
We’ve been regularly surveying credit union board members, supervisory (“audit”) committee members, CEOs and senior staff on the executive team for the past five years. And for as many years as we’ve been surveying them, we’ve dreamed about the notion of pulling together a “state of the state” of credit union governance report—both to forward our own understanding of broad trends we’re seeing in the field, and also so that we can share the combined results with you, our friends, colleagues and clients in the credit union community.
The culmination of that dream is The State of Credit Union Governance, 2018: Five Data-Driven Recommendations for Future Success. For details on the survey sample and for charts illustrating the points in this article, be sure to download the report, which is free to CUES members and $99 for non-members.
Today, we are pleased to share the report’s key findings with you. We hope that they will challenge you to increase the focus on effectiveness of governance and leadership at your organization—all toward the betterment of your credit union and its members.
We identified six key findings in total:
1. Board members and CEOs have differing perceptions of governance. Their answers differ on 84 percent of the survey’s 21 key questions, fundamental to good governance—with the exception of the Supervisory Committee survey section, where there is more agreement. (Please note: Percentages throughout the report are rounded up to the nearest decimal; therefore, figures may not total 100 percent.)
2. Board member and CEO perceptions diverge based on tenure. Board members who have served on their boards for a long time have more positive views concerning governance than those board members who have less tenure. Conversely, CEOs with longer tenures tend to be more negative than CEOs with shorter tenures.
3. Bigger really may be better. For 18 of the 21 key questions asked, board members and CEOs of credit unions with assets of $1 billion or greater had survey scores that were statistically significantly higher overall (and therefore more positive views of the CU’s overall governance) than those credit unions with assets ranging from $500 million to $999 million. That is, larger credit unions tend to rate their governance practices higher than those of smaller credit unions.
4. Credit unions that don’t undertake a more comprehensive assessment may have a skewed perception. Those credit unions that participated in survey-only assessments, opting not to include interviews, a document review and a retreat as a part of their process, tended to have more positive scores in many of the areas that we assessed. While the exact reasons for this more rosy viewpoint are unknown, it is a finding that is of genuine concern: Such a skewed—overly positive—viewpoint could cause some credit unions not to take corrective actions when, in fact, some action may be prudent.
5. Respondents are concerned about recruiting future board members. Survey participants expressed concern with the board’s ability to attract the right people to serve on the board in the future, with a full 46 percent of respondents describing their effectiveness in finding, recruiting and nominating new talent as only adequate or less than adequate.
6. CEOs and senior staff perceive lower levels of trust. Just 27 percent of senior staff and 25 percent of CEOs reported that their boards were very effective at building a leadership culture of trust, compared to 53 percent of supervisory committee members and 44 percent of board members.
Michael Daigneault, CCD, is founder and CEO of Quantum Governance L3C, Vienna, Va., CUES’ strategic provider for governance consulting. 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 serves as 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.