Posted by Karen Houston-Johnson, VP, Credit Union Resources, Inc on 1/21/2015

Oftentimes a person’s greatest weakness is an extension of their greatest strength.  Apply that idea to credit union boards, and you might find that directors’ deep commitment to serving members’ financial needs can make it hard for them to leave the job – even when, ultimately, that might be the best thing for the credit union’s ability to serve members.

That’s not to say that board turnover simply for turnover’s sake is a good thing.  In fact, a report sponsored by CUES in 2012 found that 81% of directors and 75% of CEOs reported satisfaction with the level of turnover on their boards.  The report goes on to point out though that having a formal board renewal process provides boards with an effective tool for understanding if and when turnover is needed.  Here are 2 best practices in board renewal that your credit union might want to take a serious look at, if you’re not doing them already.

  1. Board Succession Planning

The job of building the board is more than ‘just filling slots’ – it is about being strategic in the way a board looks at its composition and its governance responsibilities.  That is where board succession planning comes in.  Board succession planning is the process through which a board takes a proactive approach to ensuring that it has, and continues to have, individual directors who, at a full board composite level, possess the skills, qualifications, experience and attributes necessary to govern well on behalf of the credit union’s members.

According to “The Board Building Cycle” by Berit M. Lakey, there are nine steps to finding, recruiting, and engaging credit union directors that address two major purposes . . . to replenish the board’s people-power by bringing in new members and to strengthen the board’s performance.  Effective boards don’t happen by accident.  Just as you plan for the strategic direction of your credit union each year, it’s critical that you also plan for the strategic future of your board of directors.

  1. Board/Director Self-Assessment

Board self-assessment is just that, the board assessing itself.  It is not a performance evaluation of the CEO, the organization, or even individual board members – it is an opportunity for the board to look at itself and ask, “How are WE doing as a board as a whole?”

Any self-assessment survey will involve the board members being asked to review a list of core responsibilities and best practices and then indicate how well they think the board is doing in achieving them.  For example, the following areas of accountability are typically included:

  • Understanding the credit union’s mission and vision,
  • Financial oversight,
  • Legal and ethical oversight,
  • Providing guidance and support to the chief executive,
  • Level of commitment and involvement,
  • Knowledge of the credit union’s programs, products, and services,
  • Evaluating the chief executive,
  • Understanding board responsibilities,
  • Monitoring the credit union’s performance,
  • Strategic planning and thinking,
  • Recruiting new board members,
  • Community relations and outreach, and
  • Increasing board diversity.

Credit union board members deserve to have engaging and rewarding experiences.  Credit unions deserve to have the leadership and support of a board that brings their best to every meeting and to the organization.  The board self-assessment process is a great way to see whether your board and your organization are meeting these mutual goals.  Remember, however, that providing your board with a board self-assessment ‘tool’ to fill out is just the starting point.  This is a long ‘journey’ that should proceed at a steady pace.  Ideally, every step along the way will result in a stronger board and a stronger organization.

At OnBalance we are here to help you with this important initiative as well as Strategic Planning.  To learn more about all of the products and services we offer visit us at www.curesources.coop/onbalance or contact Karen Houston-Johnson at khouston-johnson@curesources.coop, Howard Bufe at hbufe@curesources.coop or Dean Borland at dborland@curesources.coop.

Categories: Education & Training, Strategic Planning & Consulting, Succession Planning
Posted by Mr. Bob Rehm, CUDE, VP, Sales and Service, Credit Union Resources, Inc on 1/20/2015

Recently I facilitated a session that utilized a learning map.  The session was part of a Development Education Volunteer Program, which earns you the badge of Credit Union Development Educator (CUDE). I am proud to be a CUDE.

The topic of the afore mentioned session was the credit union mantra: not for profit, but for service.  Participants got to explore and discuss the past, the present and the future of the credit union movement.  The conversations were very thought-provoking, as the group brought experiences from all over the country, all sizes of credit unions, and from all areas of the credit union. 

Even though this was a young group, most have been working for credit unions for several years and have been bitten by the credit union bug.  They are a positive force for the future of the credit union movement!

As we worked our way around the map to the future of credit unions there was a real sense of excitement and positive direction.  This group sees lots of opportunities to serve people in a not for profit, but for service way.  To be sure, the group is not naive about the challenges of the marketplace, regulatory burdens, and competition from non-financials, banks and other providers.  But they do see a viable way to continue to grow credit unions – a map to the future!

In case you are wondering or interested, DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. Participants cite many benefits of attending DE training:

  • Graduates acquire skills in credit union outreach initiatives, problem solving, technical assistance, team building, and public presentations.
  • Graduates earn certification as Credit Union Development Educators (CUDEs). They join a networking group including over 1,100 graduates across America and 34 other countries.
  • CUDEs realize that local issues are indeed global – and that credit unions grow stronger by working cooperatively.
  • CUDEs return to their jobs with new understanding of how to promote cooperative principles and credit union values as distinct advantages in today’s competitive financial services marketplace.
  • CUDEs become passionate advocates of the credit union philosophy, which boosts employee motivation, creativity and a deeper commitment to their credit union organization and the movement.

The future is bright!

For more information about becoming a CUDE contact Lois Kitsch, National Program Director, at (407) 616-2409 or lkitsch@ncuf.coop.

Categories: Education & Training, Strategic Planning & Consulting
Posted by Mr. Doug Foister, Director of Research, Cornerstone Credit Union League on 1/14/2015

That’s right. Based on an overall turnover rate of 19% and average total compensation of $31,000 per employee, the cost of turnover among Texas, Oklahoma and Arkansas credit unions actually surpassed $68 million in 2013. This startling fact emerged in the most recent Compensation Survey conducted by the Cornerstone Credit Union League.

But, now that the survey has quantified this massive financial impact, what can credit unions in the three-state area do to reduce employee turnover? After a review of the relevant literature, we believe a 2013 study appearing in the Journal of Business Economics and Management 1 identifies the factors that will be most effective in helping businesses, including credit unions, to retain employees. The factors are listed below, along with explanations by the study’s authors.

Compensation. “Pay is the main consideration because it provides the tangible rewards for the employees for their services as well as a source for recognition and livelihood. Employee compensation and benefits includes all forms of pay, rewards, bonuses, commissions, leaves, recognition programs, flexible work hours and medical insurance.”

Career Opportunity. “Increase in skills and the opportunity to manage their career successfully help to retain employees…It is the responsibility of managers to encourage employees to take responsibility for their own careers, offering continuous assistance in the form of feedback or individual performance and making available information from the company about the organization, career opportunities, positions and vacancies that might be of interest to employees.”

Training and Development. “There is significant statistical evidence to support the positive influence of training and development on affective commitment…The key consideration in organizing the training development program is to ensure quality and relevance…”

Job Autonomy. This is defined as “the degree to which employees are allowed freedom, independence and discretionary powers when performing their tasks and responsibilities.” The study also notes, “In organizations where job autonomy is high, the workers will view their work outcomes in terms of their own efforts, initiatives and decisions, rather than because of instructions of the supervisor or as the result of procedure.”

Work Life Policies. “Managers must not forget that there is a new attitude towards work and family concerns and responsibility…The days of an individual working for a single company throughout a career have become rare…People are seeking many ways to live that are meaningful and less complicated and this new lifestyle actually has an impact on how an employee must be motivated and managed.”

 

1 Ahsan, Fie, Foong & Alam. Journal of Business Economics and Management. Volume 14, Issue 5, 2013: pages 903-922.

Categories: Human Resources, Research
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