Effective Communications in the Board Room
A great number of the governance challenges that we come across in the work that our firm undertakes with credit unions can be boiled down to matters of communications.
- Are your board members crossing over into day-to-day operations? Well…have their roles and responsibilities been clearly defined, updated and effectively communicated to them?
- Are there two or three (or even just one) members of your Board who are coming to meetings ill-prepared each and every month? It’s probably time for your Board or Governance Committee Chair to have a heart-to-heart, one-on-one conversation that may be long over-due.
- Is the relationship between your Board and CEO riddled with micromanagement, executive sessions and a lack of trust? It’s possible that you stopped having authentic, open dialogue far too long ago.
After years of surveying credit union Board members, supervisory committee members, CEOs and senior staff members, Quantum Governance, along with CUES, recently published The State of Credit Union Governance 2018: Five Data-Driven Recommendations for Future Success (State of CU Governance). There were three key findings relative to the need for more open, trusting communications that both surprised and troubled us. We encourage you to take notice of them and discuss these key findings with your board. If your credit union is struggling with any of these issues, it might be time to polish your own communications skills – individually and as a group.
Key Finding #1: More than 1/3 of the respondents that we surveyed report that their board does only an adequate or less than adequate job of asking the hard questions that need to be asked.
Key Finding #2: Thirty-nine percent (39%) of respondents reported that their board is only adequate or less than adequate at holding each other accountable.
Key Finding #3: And only 25% of CEOs and 27% of senior staff reported that their boards are very effective at building a leadership culture of trust – compared to 53% of supervisory committee members and 44% of board members.
So, what’s happening at all of these credit unions? We were recently working with a credit union that received what we would term “Below Average” scores on survey questions regarding “accountability” and “asking the hard questions.” ‘Where do we begin,’ they asked. Luckily for them, their score on the “Trust” question was particularly high — a good place from which to build. They were quick to say that they all got along and worked well together – maybe too well together, perhaps?
How many of your board votes are unanimous? Are your Board members held accountable when it’s appropriate? And, how many hard questions are you asking in your board meetings? The mark of a good board is not unanimity or harmony 100 percent of the time. Your job as a board member is to ask good, hard questions. To trust but verify. In a respectful and professional manner. All toward the good of the credit union. Be authentic. Be direct. Be open. Keep your promises. Keeping promises builds trust, and you’ll need to rely on strong relationships of trust while you’re holding each other accountable in the boardroom. Speaking of accountability: hold each other accountable as board members. Ask the hard questions that need to be asked. It’s among your most fundamental roles as board members.
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