If you’ve visited a credit union boardroom lately, you might conclude that board members are being taught by all the wrong people. In these post-economic meltdown, post-corporate redesign days, it seems like volunteers are getting their vocabulary mostly from risk managers and economic advisors. They don’t sound like they are leaders of a cooperative. They don’t speak like representatives of the community that put the credit union in the business of being a credit union in the first place. They don’t seem ready to testify about the credit union’s cooperative business design.
I certainly respect how important Board members are to the business side of being a financial service provider. But in our zeal to make sure they are financially aware, I worry that we’ve drummed out of our volunteers every ounce of their customer-owner perspective. Board members should be our best advocates of the cooperative business design, and function as our most valuable peer focus group. It’s cooperative principles like these that guarantee our competitive advantage.
So where is the balance between the two perspectives, business execution and the cooperative design? And whose job is it to build a Board design that guarantees that balance? Without exception, this responsibility falls to the CEO of that cooperative.
Just like it is the CEO’s responsibility to architect and nurture the cooperative business design, it is up to the CEO to build a Board that ensures the cooperative health of the organization. This requires a balance between business line oversight – which should represent about 20% of the Board’s time – and driving cooperative health into the credit union – which should be the focus of the other 80%.
Recently I worked with a credit union to translate the CEO’s responsibility into specific goals for ensuring that both professional and volunteers leaders clearly understand the importance of the Board to a cooperative:
Why is the Board important? Why is it a real asset and “product” that the business can count on? How is the Board’s design and execution a win for the business?
Why is the Board important and valuable to the acting Board member’s interest? How is this a win-win design and how can Board member execution benefit the Board member?
Why is the Board important to the customer-owners of the cooperative? How does the Board’s design and execution create value for the owners?
Why is the Board important to the staff and professional team members? How does the Board’s design and execution create a win for the staff’s careers?
Why is the Board important to the marketplace at large? How does the Board’s design and execution create a positive influence on the industry, community, or general public?
It’s the CEO’s job to make sure everyone, from the management team to the Board members themselves, can answer these questions with confidence and conviction. The cooperative design must be crystal clear to everyone, and everyone must be ready to testify about that design.
Of course a person’s testimony isn’t worth much unless they can cite tangible evidence that validates what they say. Once again, it’s up to the CEO of the cooperative to step up and craft tools for the Board that:
1. Give the Board members confidence that their contributions are worth it to everyone. Build an elevator speech that creates the sustaining ego of the Board member and the organization.
2. Give the Board members the personal inspiration and satisfaction that the effort is worth it – a win for their personal sense of accomplishment and value – a win they can sell to their sponsoring organizations (their credit union) and third party commentators.
3. Give the company the confidence that the structure and voluntary nature of the Board creates a competitive advantage through the design. Inspire that our execution is based on the right structure and goals.
4. Give the staff and leadership the confidence that the design is the best assurance that their careers will be nurtured – the cards are stacked for them, not against them.
5. Give the Board and staff the sense that they are doing something valuable beyond the boundaries of their own organization – we are contributing to the big picture ideas that are important to us all.
Any firm can hire professionals to do the technical work, but a cooperative uses volunteer customer owners to build something different. It’s important that boardvolunteers speak the language of the cooperativeif they are to put the credit unionon a path to cooperativehealth.