Executive Summary
Good governance is about providing critical capital — intellect, reputation, resources, and access — to power credit union success. It is more than checklists designed to detect and prevent problems, though boards must exercise their fiduciary duties with care. Good governance requires the board to balance its role as an oversight body with its role as a force supporting the credit union.
Moving beyond the basics of governance, as important as those are, creates new opportunities. Exceptional boards add significant value to their credit unions, making discernible differences in their advance on mission. Consider these examples: a board that drove higher performance through an emotionally powerful vision statement; a board that retained a talented executive in the face of high turnover among peers; and a board that had a waiting list for seats due to its reputation for having bright people doing consequential work. How does a board rise to this level? Are there standards that describe this height of performance?
What is the research about?
In 2005, BoardSource, a nonprofit organization dedicated to providing governance information, tools, training, and consulting, set about answering these questions for the nonprofit sector. We convened a group of governance experts and, together, explored the characteristics of exceptional boards. Defining and analyzing their common traits and actions, we distilled the essence of what great nonprofit boards do that is different and how they do it.
In 2007, the Filene Research Institute adapted BoardSource’s findings into a resource relevant for credit unions. The result — The Source for Credit Unions: Twelve Principles of Governance That Power Exceptional Credit Union Boards. These principles define governance not as dry, obligatory compliance, but as a creative and collaborative process that supports chief executives, engages board members, and furthers the causes they all serve.
What are the credit union implications?
Strong credit union boards and strong chief executives make for good governance. Sharing a passion for serving their communities and members, they forge a dynamic relationship that leads to a higher level of performance. Exceptional credit union boards, energized by a deep commitment to the work of their credit unions, constantly search for solutions and seek to add value. Individual board members do substantive work that draws on their unique talents. Chief executives lead the credit unions adeptly, managing resources on a daily basis and regularly tapping into board talent.