Using a documented—and agreed upon—decision process helps credit union boards of directors be more effective.
The CUES Podcast Episode 50 show notes
By James Lenz
Using a documented—and agreed upon—decision process helps credit union boards of directors be more effective, says John Oesch, associate professor at Rotman School of Management, at the University of Toronto and faculty for CUES Governance Leadership Institute.
“The board chair needs to own that process,” he said in the CUES Podcast Episode 50. “If it’s time for strategic planning, if it’s time to make difficult choices about financing, if it’s time to make important human resource decisions, a more rigorous process is required. That’s the chair’s job, to ensure that we don’t start by going around the table and seeing what everyone thinks.”
While it may be tempting to start a board meeting with a straw poll—because it can be an open discussion and lets everyone have a chance to speak—the cost to doing so is too high.
“If we go around the table and get everybody’s opinion or position on what should be done, what happens now is that each board member has now declared a position publicly. … It changes an individual’s psychology to defending positions and attempting to find reasons why it’s a good position.”
This leads to confirmation bias, he said. “We start ignoring information that might contradict what we think is best and we start overvaluing information that might support our position.”
Highlights from my interview with John include:
- factors that influence the decision-making in your boardroom;
- roles of the board chair;
- some of the pitfalls and traps that board members fall into when making decisions;
- solutions for avoiding those pitfalls and traps;
- keys to ensure the board sparks constructive dialogue; and
- an examination of board member underperformance and the best ways to aid an underperforming board member.
The CUES Podcast is an audio program hosted by James Lenz, CUES professional development manager. James talks to credit union and cross-industry experts for their perspectives on trends and topics that matter to you.