8 minutes
Once upon a time, a few decades ago, a credit union hired a new, relatively inexperienced president. In that part of the Southwest, most credit union board members attended only local conferences. The new president decided that the credit union’s board members should be able to go to more meetings, and some directors of nearby Guadalupe Credit Union asked if they, too, could expand their horizons.
It wasn’t a bad idea. The only problem was that the other CU’s neophyte president had inadvertently opened the floodgates at that institution, placing no restrictions at all on the whats, where, hows and how manys. Guadalupe CU executives didn’t see that as a safe or sensible road to take, either financially or educationally.
“So we set up a budget,” recalls CUES member Winona Nava, president of Santa Fe, N.M.-based Guadalupe CU, “that allowed each board member to go to one local and one national conference.”
Over time the budget changed, and the conditions involved became more specific. Today, the $150 million credit union’s strict educational requirements demand more than simply attending conventions.
But 20 years back, Guadalupe CU had made a key discovery: A solid educational program for directors demands both a budget and a policy.
Build the Foundation
Before formulating a director education policy and budget, Michael Daigneault, CCD, recommends that credit unions take stock of where directors are in their knowledge and learning needs.
“The first thing should be some type of assessment of the directors’ skills and knowledge—where the board members are,” says Daigneault, founder and principal of CUES strategic provider Quantum Governance, Vienna, Va. “Do you and they really know what they know and what they don’t know? Sometimes, in all good faith, people think they know more than they do.”
Daigneault recommends assessing both the board and members of key committees, especially members of the supervisory committee.
As an added benefit to doing such an assessment, if the members of the governance or nominating committee pay close attention over time to directors’ skills and knowledge, they may be able to draw valuable conclusions that would complement the results of a formal assessment, Daigneault says.
Christopher Stevenson, CIE, CUES’ SVP/chief learning officer, recommends making sure the learning plan written for directors requires them to cover credit union basics step by step—and doesn’t assume anything about directors’ previous knowledge. This is because a director who holds a full-time professional position that requires financial or organizational acumen still might not understand the specific duties and responsibilities of credit union board members.
“Don’t assume, even if a new board member is a CPA or a CEO, that he or she knows the board’s role,” Stevenson says. “A certain level of orientation is needed to be sure all members understand the role of the board, your credit union and the credit union system.
“All directors should go through basic programs,” such as the first modules on CUES Director Education Center, a benefit of membership in CUES or in its Center for Credit Union Board Excellence, Stevenson says.
As for credit unions’ board education budgets, Stevenson says they are all over the map, ranging from as much as $20,000 to $30,000 per year per board member to as little as a few thousand dollars in total.
In determining a budget, Stevenson says, credit unions must start with the end in mind. “What will it take to orient new board members? How much for ongoing education?”
Consider Conferences
Even with all the online education available to credit union board members today, Les Wallace, Ph.D. president of Aurora, Colo.-based Signature Resources, recommends that directors include traveling to attend conferences in their learning plans.
Why? Being away from all the usual interruptions and habits gives a learner a special focus. In addition, in-person networking at a learning event has value.
Wallace suggests setting a director development goal of attending a minimum of one regional conference in the next two years. “It gets them in the conversation,” he points out, adding that networking in the region may help with mergers and acquisitions as well.
Kathy Sweeten, chair of South Burlington, Vt.-based NorthCountry Federal Credit Union, says every member of that credit union’s board is encouraged to attend a national conference each year.
“It lets them see what’s going on at a national level and bring it back to Vermont,” she says.
But conferences are certainly not the be-all and end-all. Sweeten says her board also likes online learning opportunities because directors can complete them at their own pace and at times that are most convenient to them.
NorthCountry FCU CEO Bob Morgan, CSE, CCE, says the $515 million CU has made its learning program more formal over the past 12 months by listing educating staff and directors as a strategic goal. The board’s educational budget is $75,000, inclusive of the planning session.
“It’s not a trivial amount, but it’s important,” says the CUES member, whose board belongs to the Center for Credit Union Board Excellence. “It’s an investment that is paying off, in terms of the types of discussions we have and strategic thought.”
NorthCountry FCU’s official Volunteers Educational Policy is now 19 pages long. CUES, CUES Director and Center for Credit Union Board Excellence members have access to it. It outlines approved educational resources. Directors aren’t limited to those listed, but can apply for use of discretionary budget funds for others, Morgan says.
Respect Directors’ Time
Another reason CUs are looking at the full range of educational options—and not just conferences—is that volunteers face increasing time pressure.
That’s especially true for credit unions with one characteristic that differentiates them from the typical CU, Wallace says: They have been successful in getting highly competent, business-literate individuals on their boards.
Similarly, the variety of delivery options for board education may be an asset for credit unions that have young directors, according to Morgan. NorthCountry CU has nine directors (including the chair), three of whom are around 30 years old.
“People volunteer for many reasons, some to serve a cause, some to give back,” Morgan says. “Young people also volunteer to advance their professional growth, skills and management practices.”
As a credit union director, they get exposed to strategic discussions at a level they may not yet have access to in their jobs, he adds. They can bring the knowledge they acquire at credit union conventions back to their organizations, leading to potential advancement and making their CU education valuable personally.
“It’s easy and cheap to structure education during the year,” Wallace says. Certain magazine articles or even books can be suggested by senior management, the board chair, directors themselves or even a board coach. Once a quarter the board can have a discussion on the selected piece at the board meeting. A tool like CUES Learning Tracker (cues.org/clt) can be used to record what board members are reading.
Stevenson calls this kind of regular, ongoing education included in board meetings the “extra 30,” something he wrote more about in Building a Better Board in “The Extra 30 Minutes” blog post. In addition, CUES’ Center for Credit Union Board Excellence offers its members videos and short articles designed to fit into the “extra 30” structure.
Daigneault agrees with the idea that CUs need to take a broad view of the available opportunities for credit union learning, including looking at events put on by the CU’s suppliers.
“Not a lot of credit unions have taken a comprehensive look at all the options. They default to credit union conferences,” he says, pointing out that educational offerings can be mixed and matched to meet individual directors’ needs.
“Break out of your shell,” Daigneault advises. “It’s one of the principal roles of the governance and nominating committees to track opportunities out there for education.”
Consider the Content, Too
But the plan shouldn’t just be for how the learning is delivered. The topics that directors explore also matter.
For instance, Daigneault says, the vice chair of the board and members of the supervisory committee might consider attending conferences on economics, technology, marketing, cybersecurity, social media, governance and even futurism.
“Part of the role of boards is to vision the future and understand as best they can where they’re going. The best futurists look at existing trends and then draw logical conclusions about where they’re going,” Daignault says.
Wallace says that at least half of the credit unions in the United States could use more expertise on mergers and acquisitions.
Wallace also believes credit unions should embrace moving outside traditional limits to add a focus on board officer development, which may even require a separate budget. (He will lead CUES’ Board Chair Development Seminar in September in Vancouver, British Columbia.)
Stevenson agrees. “Those tagged as potential officers should go to training sessions to help them prepare for the additional responsibility of their new roles. They may also benefit from programs that dive deeper into their areas of responsibility, such as executive education programs focused on governance, leadership and strategy,” he says.
Credit unions might also want to consider sending directors to meetings outside the credit union silo, perhaps including those sponsored by BoardSource, Stevenson notes. “In today’s world, more information is portable to credit unions.”
He adds that board members need to understand not just the credit union as a financial institution, but the credit union difference—and their credit union’s unique characteristics, such as why it exists, why it serves members the way it does, and who the members are.
“Credit unions have a rich history,” Stevenson says. “They’re not run like a typical bank.”
Charlene Komar Storey is a veteran credit union writer based in New Jersey.
