Oct 06 2015
Entrenched or Energetic? Improving Credit Union Board Renewal
Some of the most basic formal board renewal processes remain disturbingly rare in the credit union system. Sixty percent of credit unions do not perform any type of board evaluation. Twenty-five percent have no process for removing underperforming directors. And perhaps the greatest gap of all lies with the credit union boards that are not aware of where their duties lie.
Research Officer, Clarkson Centre for Board Effectiveness, Rotman School of Management, University of Toronto
Manager, Clarkson Centre for Board Effectiveness, Rotman School of Management, University of Toronto
Report Number 373
Compare, for a moment, credit unions and professional sports teams. Both are fueled by competition, differentiation, and consumer interest. Like credit unions, professional sports teams are managed and governed by a select group of leaders. These executives won’t be found on the field of play, yet their roles are arguably the most critical for the long-term health of the team. When a team underperforms, leaders shake up the governance structure and insert new personnel.Credit unions don’t track wins or losses as a performance measure. However, they are held accountable for their own success. A credit union’s board serves as the defender of the credit union mission. Most boards take full responsibility for their role as stewards of the members’ interests and the organization’s strategy. Just like in sports, if a credit union isn’t delivering on its value proposition, the board has the power to inject new people, processes, and protocol. Good boards should hold themselves accountable in the same way.