FLASHBACK 1997: "Boards should see themselves as the experts on the
user level for the credit union, just as the management and staff are the
experts at the operational level. The board should not just be rubber-stampers."
- Bucky Sebastian
In the midst of strategic planning season we revisit Bucky's plea for a wake-up
call to credit unions and their boards. He posed a disturbing question to
board members: "Is this credit union your primary financial institution?"
Now ponder this question: "What would your board's answer be?"
Stimulate Your Board During Strategic Planning Sessions to Do Its Best
By Bucky Sebastian
The strategic planning season is upon many credit unions. In order to get
the best results from it, the board should be fully engaged, critical and
creative. Too often this is not the case.
All too often the board is the mere recipient of information, rubber-stampers
of management initiatives. At many strategic planning weekends, the management
lays out reports on the changing financial environment, initiatives it believes
prudent and so on, all leading to but a single conclusion on the part of the
board, which approves the new measures, appropriates money and instructs the
management to do its best to carry out the plans.
Boards should see themselves as the experts on the user level for the credit
union, just as the management and staff are the experts at the operational
level. The board should not just be rubber-stampers.
Considering Their Own Lives
A means of startling board members out of their daze is this: Ask the board
members - "Is this credit union your primary financial institution?"
Such a question posed to many boards - even to many managements - would not
produce a single nod around the table.
Posing the above question - or a similar one, "Do you do all of your
financial business at this credit union?" - is a wake-up call for many
board members and a good launching pad from which to begin a strategic planning
Presumably, the board members must admit that the credit union where they
are directors is not their primary financial institution. It might be in the
sense that they have their checking and transactions accounts there. But the
credit union would not be the PFI for these board members if you define a
PFI as the institution to which you trust your major assets, the ones to which
your lives are most importantly bound (regular savings, retirement savings,
home mortgage, education savings and the like).
You might follow the above questions to the board members with: "If
the credit union is not your primary financial institution, is it because
you feel it does not have the talent or the skills or is there another reason?
Do you feel being a primary financial institution is not consistent with credit
Once board members bring perceptions of their own lives and philosophies
to the fore, they are poised for a planning session in which they will be
engaged in both the process and the content.
They will be engaged in the process because they will likely look at the
future of the credit union in a new way. Faced with a disturbing question,
they will realize that the session should not be mere business as usual, but
rather they will have to act like the directors they are supposed to be, and
will have to instruct the management on the direction best suited for a credit
union of which they are the experts on the usage level.
They will be engaged in the content level because they are more likely to
develop ideas that will establish a strategy for the credit union that in
turn will increase their own usage, the usage by present members and new usage
by persons not yet members. They will also be more alert to the ideas that
management presents to the board, evaluate those ideas critically, given them
a reality check, to pass them through their own "expert" filter
to consider whether they are going to work as projected or not.
Defining the Role of the Credit Union
All this moves to another point: the board should be defining what the role
of the credit union should be. Without that definition, the credit union is
likely to be adrift. The board should, as best it can, articulate simply and
in a short statement, what the credit union is meant to do.
This "mission" should define the role within the community, the
movement and the financial services industry. It can be limited, such as,
"We will remain the financial institution of the employee benefits plan,"
or "We will work to become the primary financial institution among aerospace
Making that definition, whether the ambition is limited or broad, goes a
long way to answering later questions, such as "How do we relate to select
employee groups?" or "Should we partner with credit unions in different
states for ATM systems?"
When engaged in strategic planning, make the most of your board. Don't lapse
into business planning such as passing the budge - leave that for another
weekend. Dig deeper. Stimulate the board to work at their level as experts
on the use of the credit union. You needn't invite micro-management, and you
shouldn't, board members should understand that it is not their role to interfere
with management, but a credit union too long steered by management is one
headed for rocky shoals.