When Directors Step Down

It’s no secret volunteer leaders who serve as board members are among the most valuable assets a credit union possesses. Their commitment to help CU members and their dedication to serve without compensation is unparalleled.

The efforts of the volunteers who have served America’s CUs throughout the years should be applauded and celebrated. Many, literally, have devoted decades of their lives to attending monthly board meetings, serving on committees, and representing their credit unions in their communities and at state, regional, and national events.

While this high level of personal commitment has served individual CUs and the industry well in the past, it is not likely to continue in the future for a number of reasons.

As CUs expand fields of membership and serve broader geographic areas, the composition of their boards will need to shift, reflecting the increased diversity of their membership and the markets they serve. As the industry continues to evolve, different levels and types of knowledge, skill, and experience will be required to guide the CU and ensure its continued success. And, as new board members step up to serve, they will see their role not as a lifelong commitment, but rather as one of many opportunities they will accept in their lifetime to serve and contribute.

If you’re ready to accept the challenge to build the board your credit union will need in 2020, you’ll need to 1) know when to vacate your seat at the table so someone else can step up to serve and 2) help establish a process for capturing the important historical context and decision experiences from board members who are moving on, so that it can be shared with current and future directors.

The Stepping-Down Decision

A few years ago, after delivering a speech and suggesting the need to make room for new volunteers on CU boards, a long-time volunteer approached me. He said he was convinced that it was time for him to step down to make room for someone else.

We talked for a few moments and shared experiences about how sometimes when a person is in a leadership position for a long time, people come to rely on him or her to do a number of things, and no one seems to pitch in and offer to help. He noted that sometimes he felt that his presence was actually stifling the board and keeping it from moving in new directions—not because he was doing anything to hold it back, but because everyone saw certain subjects and activities as off limits because he (a long-tenured board member) was handling them (and always had).

Bonus Video

Chances are that situation sounds familiar, and it is a tough one: A valued volunteer who is contributing realizes that for the CU to move to the next level, he or she needs to leave the board. It is, in fact, perhaps the most important and impactful leadership decision an individual can ever make. But that doesn’t make it an easy one. 

At one level it is a very personal decision. When you have served for many years, you have a genuine sense of ownership and you feel much like an entrepreneur walking away from something he created. No matter how confident you are in those who will follow, you will feel a sense of loss knowing you no longer will be involved on a day-to-day basis.

At the other end of the spectrum, sometimes the decision doesn’t come from the volunteer, but from the rest of the board. Sometimes the decision needs to be made because the director is not contributing.

Other times it is a decision that needs to be made because even though the board member is engaged, he or she is becoming a distraction for one reason or another. Occasionally it is needed simply to open up a seat to allow someone with fresh ideas.

Leaders from all walks of life face this decision. It has little to do with the job someone has done in the past or is doing now. Rather, it has to do with what is in the best interest of the business in the future.

Use these five areas to evaluate whether it is time for you (or your board colleagues) to step up to step down:

1. Knowledge—The financial services industry is in a time of transition, driven by market maturity, changing technologies, evolving markets, increased consolidation, and expanded regulation (to name just a few). If you find you are increasingly out of synch with the changes occurring, it may be time to consider stepping down.
2. Network—One of the key ways we learn about opportunities, meet prospective new board members, and engage in developing our skills is through our network. If you find that you tend to deal primarily with the same small group of people who share the same general knowledge, skills, and experiences you do, it may be time to consider stepping down.
3. Commitment—Human nature tends to lead us to become less committed as we grow more familiar with the role we are playing; we tend to learn how much we have to do and allow other things to consume some of the energy we devoted when we first started. If you find your commitment to serve is being regularly challenged by other opportunities available to you, it may be time to consider stepping down.
4. Workload—As the CU industry evolves, directors’ work becomes more demanding and the burden of keeping up consumes more time and energy. If you find you are less engaged in monitoring the things likely to impact your credit union, it may be time to consider stepping down.
5. Talent—It is never easy to come to the realization that someone else could do the job we are doing better than we can, but that’s what leaders must do—recognize talent in others and realize they may be more capable than we are at this point. If you see that others can do a better job than you can, it may be time to consider stepping down.

Though the process of evaluating your continued leadership in these five areas will not be easy, accept the challenge. Be candid, open, and honest with yourself, and consider asking a trusted colleague (who will tell you the unvarnished truth) to go through the list with you.

If your review leads you to conclude it is time for you to step down, then step up and demonstrate your leadership chops by doing just that (and consider the ideas that follow as a way for you to continue to contribute to the success of your credit union).

Capturing Knowledge

In my work with CUs over the past 15 years, many people have expressed the same fear in discussions about board leaders stepping down—the fear that key knowledge will leave with them.

In particular, people are concerned about capturing information about the context within which the credit union was created and operates; collecting evidence of the credit union overcoming obstacles and navigating challenges; and documenting the credit union’s history. These are important considerations. When you’re building a board for the future, you need to capture the wisdom that lies within the current board.

From my perspective, the process begins during the recruitment and training process for new volunteers. The first step is defining the expectation that every volunteer is responsible for owning, capturing, and sharing the institutional knowledge that defines the CU’s story. That means all members of the volunteer leadership team have a responsibility for building the capacity of the team by learning the lessons of the past and sharing them with current and future leaders.

Here are three ways you can capture the knowledge of departing board members:

1. Create an emeritus program—Too often when people step down from the board, they “disappear.” An emeritus board member program involves anyone who has completed a term of board service.
   
   The goal is to keep people who were willing to serve engaged after their official term of service on the board has ended.
   
   This group should mentor new and associate board members, share the CU’s story with prospective volunteers, and capture the history and key lessons from their time on the board for use in preparing future volunteer leaders for success.
    
2. Interview departing board members—A very simple way to capture the knowledge of departing board members is with an exit interview. Use the information from these interviews in the recruitment and training of new volunteers.
   
   An easy way to do this is to have someone sit down with departing board members with a video camera and ask a series of open-ended questions about their experiences on the board, key lessons they learned, the challenges the board faced and how they dealt with them. Create clips from the video that can be shared.
   
   If video is not practical, taking notes or recording audio could work. So could a written or computer survey. You could even hire a local reporter to conduct the interview and write a personal story about the insights the board member shares.
    
3. Develop a volunteer knowledge base—A knowledge base could provide future volunteers access to the context and experiences that have shaped the CU, plus insights for being more effective.
    

The ultimate job of the leader is to equip those who follow to take the organization beyond what was thought possible—and to have the courage to know when to step aside and let them do it. Are you ready?

Michael Hudson, Ph.D., is founder and principal of www.creditunionstrategy.com, Rehoboth Beach, Del. He is a frequent speaker at CU industry conferences across the country and helps individual CUs discover and implement strategy, build and sustain culture, and identify and develop leaders.