Good Governance: Get Your House in Order—Now, If Need Be

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Michael G. Daigneault, CCD Photo
Quantum Governance L3C
Jennie Boden Photo
Quantum Governance L3C

4 minutes

There is no ‘wrong’ time to deal with fundamental governance issues.

We read with interest a recent article about governance that discussed the importance of boards not addressing their governance issues “in the wrong places at the wrong times.” The authors suggested that many times boards discuss governance issues during precious time in sessions dedicated for other important work—such as strategic planning. They posit that this is distracting and a poor use of time for those taking part and to the goals of the session.

They have a point. On one hand, the limited time a board spends together should be treasured– and treated as a resource to be judiciously and appropriately allocated. Strategic planning discussions with management need to happen and are a vital aspect of a board’s role. 

But on the other hand, if your credit union’s governance challenges are so real that they are clouding your ability to strategize or otherwise effectively lead, there may not be a “wrong” time to deal with them. 

If governance discussions arise in the context of other discussions, unresolved issues may exist that need to be effectively dealt with ASAP so that governance differences or issues don’t unduly interfere with how you successfully execute your governance roles and responsibilities—strategic planning included!

A Need for Conversations on Governance

Our recent study, The State of Credit Union Governance, 2018, Five Data-Driven Recommendations for Future Success, found evidence that a good number of credit unions are struggling with governance issues. Of our six key findings, two help tell the story of when to discuss governance:

1. Board members and CEOs frequently differ on their perceptions of governance, with board members and CEOs differing on 84 percent of the survey’s key questions, agreeing on only 16 percent of them (with the exception of the supervisory committee survey section, where more agreement was found).

2. CEOs and senior staff perceive lower levels of trust, with just 27 percent of senior staff and 25 percent of CEOs reporting 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.

We see evidence of these challenges and more in our work with credit unions. Time and time again, we’ll incorporate a strategic and governance assessment and a planning session into one engagement. After all, what could be more strategic than getting your governance house in order? 

At a recent strategic planning session, a client spent some time in a facilitated executive session, building trust between the board and the CEO. From our point of view, this discussion was probably one of the most important, strategic steps this credit union could take. More and more credit unions are opting to include a strategic goal on governance in their strategic plans. 

This is not to suggest that you should completely eclipse your normal agendas for all things governance. The article’s authors made some relevant points, and we agree wholeheartedly with most of their recommendations:

  1. Dedicated time for governance training is a must. 
  2. Focus on board member education and governance issues—and to this we would add strategic matters—at every board meeting.
  3. Give permission to each other (not just to the CEO or senior staff) to check each other (appropriately) when boundaries are crossed.

And as already mentioned, we could support the idea that governance issues not take over every meeting unless the governance issue is so fundamental (i.e., a loss of trust between the board and the CEO; a lack of engagement among board members; critical disagreement on roles and responsibilities, etc.) that it would derail all other discussions or progress. If this is the case, you must have the courage to change course. Agendas are important. Timelines, yes, are meant to be kept. But, remember the saying, “culture will eat strategy for breakfast,” and it’s true. 

Get your governance house in order. Now’s the right time to do so!

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 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.

Quantum Governance provides credit unions, corporations, nonprofits, associations and governmental entities with strategic, cost-effective governance, ethics and management consulting, facilitation and evaluation. With more than 40 percent of Quantum Governance’s representing credit unions, the organization fields more engagements in the credit union community than in any other. The organization is a CUES strategic partner in the field of governance, and we are home to more strategic governance experience than any other practice in the country. The firm is a unique L3C organization that integrates the best elements of both the for- and non-profit communities into one practice. It is a low-profit, limited-liability service organization dedicated to the public good and one of the very first such legal hybrid organizations in the United States.

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