Being proactive can bring fresh perspectives that can improve the organization’s prospects.
Finding potential candidates to serve on the board of directors is an ongoing challenge for many credit unions. Being proactive in your approach will help bring diverse perspectives and fresh voices to your board for the betterment of the organization.
“One of the stumbling blocks we’ve seen to effective board governance is the tremendous status quo that exists in many board compositions with the same people being elected time and time again due to geographical constraints,” says Michael Daigneault, CCD, CEO of CUES strategic partner Quantum Governance L3C, Herndon, Virginia. “I believe there should be mechanisms in place to encourage regular board renewal for the benefit of the credit union, and virtual attendance in combination with some in-person meetings opens up the field of potential candidates for so many boards.”
A major component in effective board renewal is taking a strategic approach to finding the best people who will add value to the board.
“Those folks don’t just fall in your lap; you’ve got to go out and find them,” Daigneault says. “Composing the ideal credit union board of the future does not take place by happenstance. It is deliberate, thoughtful and forward-thinking. Eliminating barriers like travel time to and from regular board meetings allows for an ever-expanding pool of quality candidates.”
Associate and Emeritus Board Member Programs
Among the strategies that Daigneault recommends for facilitating ongoing board renewal is the use of associate board member and emeritus board member programs.
“Not only do such programs allow for candidates to be vetted and become oriented or prepared to serve on the board, but they also allow for some of the more senior directors to ‘retire’ from the active governing board while still being around for historical continuity purposes. That, to me, is the best of all worlds.”
$2 billion Abound Credit Union, headquartered in Radcliff, Kentucky, has an associate board member program that it uses to support a succession plan for board positions.
“Associate board members get an opportunity to learn more about the credit union and get a better understanding of the work required to be a director,” reports President/CEO Raymond H. Springsteen, a CUES member. “On top of that, we’re always recruiting for those who could be interested in supporting the credit union and volunteering.”
Much of Abound CU’s recruiting consists of traditional outreach to individuals in the community, but in some cases, advertising is used.
“We had a position on our supervisory committee that we did advertising for it,” Springsteen says. “There is a lot of interest in the community to be involved in the credit union. We ended up with about 40 candidates with relatively simple advertising through our digital platforms.”
Key Work for a Key Committee
At $1.1 billion Great Lakes Credit Union, Bannockburn Illinois, the responsibility for director and committee member recruitment lies with the board governance and nomination committee.
“There are several ways we recruit for new members,” says CUES member Barbara Castleton, staff liaison to the committee. “We reach out to various organizations, such as the local chambers of commerce and young professionals groups. We also recruit candidates through word of mouth—someone saying, ‘I know a person at my organization who would be great’—and that tends to be the most helpful referral.”
Recently, the committee discussed the idea of starting an advisory board as a source for future board members.
“That way, we could have a couple of people waiting in the wings,” Castleton says. “Ideally there would be a couple of young professionals or interested parties on the advisory board who could funnel into the regular board of directors as time goes on and if they so desire. The advisory board could also be charged with research around a specific area of strategic focus for the credit union.”
Reaching out to young professionals to serve on the board may require a different approach than what has worked in the past. For example, Castleton notes that older directors (those in their 50s, 60s and 70s) may enjoy the camaraderie and networking of serving on the board, including the opportunity on occasion to attend industry conferences.
“A younger director who is raising a family may not see the appeal in attending an out-of-town conference,” Castleton observes. “Perhaps a more appealing enticement would be resume-building, the ability to say, ‘I served on the board for a not-for-profit financial institution,’ and also getting the chance to interact with seasoned directors who could take them under their wing.
“They may also be motivated by the opportunity to assist in their community with financial empowerment initiatives or to participate in making some impactful changes at the credit union,” she says. “Those types of benefits of service seem to resonate more with the younger professionals, and that’s become part of our recruitment strategy.”
Take a Many-Pronged Approach
Carrie Iafrate, president/CEO of $750 million Members First Credit Union in Midland, Michigan, stresses the importance of taking a multi-faceted approach in recruiting board members.
“We use a mixed bag of tricks to work on recruiting and succession planning for the board,” she says. “We have a supervisory committee, so that group of people is very knowledgeable about the credit union and usually our first look. We also ask board members to help us in recruiting other board members. If they’re ready to retire or step down, we request that they give us names of candidates they feel would be an excellent fit to the board.”
Iafrate adds the CU’s executive team and branch team are excellent resources for going out in the community to find board candidates that meet the requirements of the seat they are trying to fill.
“If we’re looking for someone with a specific background in business, finance, marketing, HR—whatever that seat may call for—we ask our team, ‘Who in our community is skilled in this area and is someone you would love to see on our board?’ We have individuals in their early 30s who have joined the board because of our connections in the community and their appreciation for the social mission of our credit union,” Iafrate says.
Moving forward, Members First CU is exploring the idea of adding a couple of advisory board positions. “This would put them in a position to learn the credit union, and though not a voting member, they’d have all the interaction of any other board member,” Iafrate explains. “That would put them in an excellent position to move onto the board when an opening occurs.”
Don’t Forget Diversity
As CUs go about the task of board renewal, Daigneault recommends that they give strong attention to diversity—not only in terms of age, race, gender and gender identification but also in terms of ensuring the inclusion of a variety of skills, backgrounds, experiences and regional and cultural representation. “More diverse boards have been shown to be much more effective than nondiverse boards,” he explains.
Daigneault recommends credit unions have regular discussions about what traits, skills and abilities they would like to see on their board—and then devote their recruitment efforts to assessing themselves for gaps and finding a good cross-section of people who provide a more complete picture.
“You want to have a variety of skills, experiences and backgrounds to make up the team,” Daigneault says. “What you want are chess pieces, not checkers. That’s what makes for the best board.”
Based in Missouri, Diane Franklin is a longtime contributor to Credit Union Management magazine.