There’s nothing like meeting your hero. For some, that might equate to a football player or a musician or maybe a politician — a well-known celebrity type, whose mere physical presence is immediately recognized by all. For a governance geek like me, heroes are fewer and farther in between. But they do exist and when they do, they rise like giants.
Thanks to my good friends at CUES, I met my hero a few months ago on the eve of the 2019 CUES Symposium in Nassau, Bahamas. And because they are, indeed, good friends, I was lucky enough to be afforded some private time with Ram Charan, the world’s leading expert in corporate governance. Along with some members of my team, I explored some of the most pressing concerns of the day with him — challenges that perplex even the most skilled and tenured credit union board members and CEOs.
I imagine I’ll be mining the notes from our conversation for quite a time to come, and I look forward to bringing you the fruits of those labors in future blogs. For now, I am pleased to share with you six key responsibilities central for every board outlined by Ram as he spoke to the board chairs and CEOs assembled at the Symposium:
- Ensure effective board composition. This is one of your board’s most fundamental roles and responsibilities. Board renewal at its core is also one of the most difficult. The State of Credit Union Governance, 2018, published by Quantum Governance and CUES found that a full 46% of respondents described their effectiveness in finding, recruiting and nominating new talent to their board as only adequate or less than adequate. Do you have the right directors and the right officers for your board?
- Don’t just hire your CEO, coach him or her for success, too. If you are lucky enough to have the right CEO, take care not to lose him or her. Ensure that you have a strong relationship with your CEO, as well as a succession plan in place on day one.
- Develop the right strategy to lead you into the future. Here it’s important to work in a full, constructive partnership with your credit union’s CEO and management team. Focus on the vision, mission, culture, strategic goals, objectives and metrics, and then let your CEO and his/her management team worry about operational work plans that support effective implementation.
- Keep an eye toward the horizon. Are you clear that you see things today will build the future tomorrow? Look for opportunities; many will fail but many will grow. The board adds value in asking questions of opportunity and in sowing the seeds.
- Stay current on important trends. Allocate enough time at the board level to learn about industry trends so that you can contribute to the strategy effectively. Study FinTech, digital corporations, consumer trends and more — anything that will give your credit union an edge over its competitors.
- Monitor the credit union’s performance. Rely on your CEO and his/her management team to deliver the data you need to monitor performance. Ensure that you are asking questions that “trust but verify” the credit union’s position and progress. Be sure to rely also on empirical data, and finally, ask yourselves these questions. In the last quarter: What three things: 1) Have we done very well; 2) Have we not done well; and 3) Will we do differently?