How Strong Board Governance Fuels Credit Union Growth

In this episode of CU On the Show, Doug English sits down with Jennie Boden, CEO of Quantum Governance, and Lynette Smith, a former credit union CEO and current governance expert, to discuss the evolving landscape of credit union governance. Jennie and Lynette share valuable insights on how proper board governance can drive credit union growth, streamline operations, and set the foundation for strategic success.

The Importance of Governance in Credit Unions

Jennie and Lynette highlight the often-misunderstood role of governance. As Jennie explains, governance is more than just policies and regulations; it’s about building relationships and creating a vision for the future. This broader, more strategic perspective of governance helps credit unions serve their members better and scale efficiently.

For Lynette, having served as CEO of Treasury Department Federal Credit Union and a passionate advocate for the industry, governance is a game-changer. She shares how strong governance transformed her credit union’s management team, resulting in asset growth and a more organized strategic process.

What is a Board Governance Plan?

Lynette stresses that too many boards focus on operational details, such as reviewing balance sheets or staff reports—tasks that should be left to the CEO. The board’s role should be to think strategically, always looking forward. As Lynette puts it, “The board only has one employee—the CEO. Everything else is operational.”

To support this shift from operational oversight to strategic thinking, Jennie introduces the concept of a Governance Action Plan. This plan is designed to help credit union boards evolve alongside their growing organizations. If a credit union has moved from $250 million to $1.5 billion in assets, the governance structures and conversations should evolve as well. Boards that fail to adapt will struggle to govern effectively in a more complex environment.

Why Board Composition Matters

One of the standout points in the episode is the importance of board composition. Jennie uses a powerful analogy: “Board members are not checkers, they are chess pieces.” This means that board members should be strategically deployed based on their unique skills and attributes. Governance isn’t just about having a financial expert or an attorney on the board. It’s about having members who are forward-thinking, curious, and strategic in their outlook.

Lynette adds that diversity, both in terms of background and thought, is critical for a strategic board. But she cautions against simply checking diversity boxes. Boards should prioritize individuals who can focus on the future and drive the strategic direction of the credit union. The challenge for many boards, Lynette notes, is that they don’t know what strategic governance looks like, which is why proper training is essential.

Stream the Episode to Learn More

If you want to dive deeper into how governance can drive credit union success, here are three key takeaways you’ll get from the full episode:

The Role of Governance in Credit Union Growth: Learn how shifting from operational oversight to strategic thinking can help your credit union grow its assets and serve its members more effectively.

Creating a Governance Action Plan: Understand the steps to evolve your board’s governance practices as your credit union scales, ensuring you’re always prepared for the next level of growth.

Building a Strategic Board:Discover the importance of strategically recruiting board members who bring more than just technical skills—they bring a vision for the future.

To fully understand how governance and strategy intertwine to drive credit union success, don’t miss this insightful episode with Jennie Boden and Lynette Smith. Their expert advice can help your board become more strategic, ensuring the long-term growth and stability of your credit union. Stream the full episode now to equip your team with the tools they need to lead your credit union into the future.

Lynette Smith, Jennie Boden and Quantum Governance are not affiliated with or endorsed by ACT Advisors, LLC.

Audio Transcription

Doug English  00:02 

Welcome to CU on the Show, Jennie and Lynette, I am delighted to have you join me today. I have seen you in credit union social media for many years, since your legendary work with board governance is well known, but if you would, I’d like very much if you would tell our listeners how you got started in working with credit unions and what kind of work you’re doing today. 

Jennie Boden  00:51 

So I’m Jennie Boden. I’m the CEO of quantum governance, and I’ve spent my entire career working in the not-for-profit sector. My history and background working with credit unions and being connected to credit unions is pretty varied. I will tell you that when I was a child, my best friend’s mother worked at a credit union. I didn’t really know what that meant. I just knew that it was a financial institution out a the mall, and it would be a long time coming until I was connected with a credit union, and that was through my husband, who was a firefighter. He was a firefighter in Anne Arundel County, Maryland, and when we married I, through marriage and through his relationship with his credit union, became a member of a credit union. I still really didn’t know what that meant, except that now, when I went into my financial institution, they knew my name, they knew my background, they knew my husband. And I liked that. I liked that small town feeling, even though I was living in a big suburban area in-between Washington, DC and Baltimore. When I came to quantum governance, probably over 12 years or so ago, and began to work on board governance and strategy issues my first client was a credit union. And I was really surprised to find the difference between credit unions and general, not for profits like associations and charitable organizations. And then I became really well read in what credit unions actually do and what they do for their members, much beyond, you know, making a member feel great when they walk in the door by knowing their name and knowing their family and their situation and what their needs are. All of which, of course, is really important and really relevant, a little less relevant for some of us these days, I often will tell folks that I don’t go to my branch as often as I turn to my phone to do my banking, but I still like going into my branch occasionally and having them know my name. So the work that I do today and have done, really in the last decade plus, is helping credit unions at the board level, at the CEO level, really strengthen their governance, strengthen their strategy so that they can serve their members better.  

Doug English  03:05 

Well, that’s important, and that’s what we’re here to talk about. Lynette, tell us about how you got started in the credit union movement. 

Lynette Smith  03:12 

Okay, well, let’s start with 1989 when I went into the credit union industry. And even prior to that, I did nine years in public accounting and health care. I also, at one point had an internship at Justice Federal Credit Union when I was in college. So I got a taste for credit unions. But when I left public accounting, I then went to work for Treasury Department Federal Credit Union in 1989. At that time, there were 12,891 credit unions. Today, as of June’s Call Report, June 24 we have 4533. We’re serving more members, but the number of credit unions is shrinking. That has been a passion for me. I have done three testimonies on the hill in front of Congress to save our industry. So when I graduated as a CEO in 2021 I wasn’t finished. So, quantum governance really made it easy for me, because they called me right before I retired, and said, would you like to come and work with us? Well, it was a pretty easy decision to say, yes. Why? I was their client for eight years. So I was a semi- governance geek, I saw what it did for my credit union. It was truly a game changer for my management team and for my board. We were more organized in our strategic process, and this is important. I saw where our assets double.  

Doug English  04:59 

Well, let’s kind of go into that. How do you define governance? What does that mean to you guys?  

Jennie Boden  05:05 

So we really look at governance as two sides of the same coin. I think a lot of times when people say the word governance, and actually we’ll do this oftentimes with our clients, we’ll say, What do you think of when you hear the word governance, and they’ll say things like policies and bylaws and structure and laws and regulations and rules, and that’s definitely a part of governance. It’s an important part of governance, but it’s only one part of governance. Actually, I think it’s the most boring part of governance. And happily for us, there’s another side of that coin. The other side of the coin is the more informal aspects of governance. It’s the influential and persuasive side of that coin. It’s the conversations between board members, between and among board and management team. It’s the discussions that you have in the boardroom. It’s the relationships that you build. It’s the vision that the board and the management team in constructive partnership together have for the future of the credit union. It’s the connection and the commitment to the membership. All of that is governance. It’s not just boring bylaws and policies and regulations, which, of course, we need to have and we need to adhere to, but it’s much, much more. 

Doug English  06:22 

I mean, it seems like several credit union boards that I’ve known of over the long term have been basically the same people for more than 20 years. Seems like sometimes it’s kind of the luck of the draw, who is willing to volunteer was the person that had the time, then that person had usually a background from a SEG group that was the foundation of the credit union. Then, you know, maybe they enjoy it and they stay on and sometimes for decades. But that’s not a strategic design of a board. We got a lot of things to talk about, but a big part of it is, is how does governance lead to more success for the credit union? And you can define that any way you want. Maybe asset growth is the easiest way. How do those things fit together? How does one get the other? 

Lynette Smith  07:12 

I can take the lead on that, and then Jennie can piggyback. Asset growth is so important to our industry. So what I’ve seen, I’ve served on several boards, I’ve gone to 1000s of conferences in my career, talked to CEOs and board and from what I am hearing is that credit unions under 100 million they really focus on operations of the credit union. They look at that balance sheet, and they look at that income statement, they look at the ratios occasionally, and they look at the current month management report, marketing report, how many staff were hired and fired. That’s not the board’s role. These are the primary responsibilities of the CEO, not the board. So the board only has one employee. The Board of Directors role is to be more strategic, always thinking forward. Board governance is a useful resource, a useful tool that helps boards grow their credit union and asset size, strategic planning. I’d like to know how many credit unions have a board governance plan? They have financial plans all the time. But where’s that board governance plan? 

Doug English  08:35 

What’s a board governance plan? What is that? 

Lynette Smith  08:38 

Jennie, can you speak to that, please.  

Jennie Boden  08:40 

Sure. Happy to. So what we do is we encourage the boards that we work with and that we come into contact with to actually have metrics and goals for themselves. How are they going to govern? How are they actually going to evolve? You talked a little bit about evolution earlier, and this notion of, you know, we’ll often ask folks when we’re working with them, when you were, you know, 250 million in assets, or 500 million in assets, what did your CFOs office look like? Did you have a CFO, or was it a controller? How many staff did you have? And they’ll explain, and they’ll give us a sense or an insight into what that CFO or controller’s office looked like? What does it look like now, now that you’re over a billion in assets, has the staff grown? Has the budget grown? Has indeed, the staff and their backgrounds changed? What kind of reports do you generate now at that other office that are different, perhaps, than they were before? And then I’ll ask this question, do you have the same board Do you have the same board members? Do you have the same committee structure? Are you talking about the same kinds of things? Indeed, does your board agenda look the same now at a billion or a billion and a half in assets, that it looked like at 250 or 500 Million in assets? And generally, we’ll see a lot of heads shaking. This is the important piece about this evolution that you mentioned, the important notion about the evolution of governance. And so, the Governance Action Plan, or the strategic plan around governance that Lynette mentioned is, if you’re operating at governance 101, or 201, or 301, what does governance 401, 501, or 601, look like for you? And how you going to get there? What’s the plan? How are you going to evolve your governance so that you’re not trying to govern a $1.5 billion credit union, as if you were a $250 million credit union. Or even if you were a $50 million credit union, you’re not trying to govern now a  $250 million credit union, as if you were still a $50 million credit union. 

Doug English  10:47 

Everything has to start with awareness of the problem. Are there characteristics of credit unions experience as an entity that would tend to help a credit union identify that they might need to relook at their board governance design, at the makeup of their board and the strategic design of the skill set of those people. When does that happen? What causes an executive to say, oh boy, we need to look at that. What have you seen coming in from your clients? What’s behind why they call you? 

Jennie Boden  11:23 

It’s a really good question. It’s one that I haven’t thought on much, except that the minute you asked it, my first response was the changing landscape of the CEOs, and we’ve got a lot of CEO turnover, right? The industry is changing. The tenure of the CEOs, the tenure of the board chairs. We’ve got a lot of new blood coming in. And I think back to one client that we had who was looking for a new CEO, and the board was really clear, and they said, we want a racehorse. We want to hire a racehorse. They hired a racehorse, and when the racehorse started running, the board said, oh, wait a minute, you’re running? And the racehorse said, yes, I’m a racehorse. That’s what I do, I run. And the board said, Well, we didn’t think you were gonna run this fast. And the relationship fell apart within probably three years, maybe two and a half. My immediate response to your question was this, that new CEOs, new board chairs are coming in and going, Holy Toledo, what is happening here? We’re running now a billion dollar credit union, and we’re governing like it’s a $250 million credit union, and that’s not going to work long term. I did a review of board meeting agendas for probably a $750 million credit union one time. And I’m not kidding you, in the board meeting materials, there was a report on the spreading of mulch at a $750 million credit unions branches. That is not appropriate at any reach within the purview of even the CEOs, let alone the boards.  

Doug English  13:06 

One of our previous guests had said, If you want your board to think strategically, make sure that the information you put in front of them is exclusively in the category of strategy. None of the tactical things that you’ve just described, for sure not mulch quality, should ever be a part of your board meeting. It needs to be strategic material that you’re discussing. 

Lynette Smith  13:30 

That’s why reviewing the board package is something that we do. We’ve seen 100 page board packages that take two or three hours to review with the board, and we were able to minimize that down to really what is important for them. Board members should also, at their meetings, have strategic discussions. We would do that. We would carve out 15 minutes, 20 minutes at the beginning of every board meeting, and talk about something strategic. And how we got board members to be engaged, is board members took a topic, something that they wanted to research. They would research it, the staff would help them research it, and we’d bring it back to the board.  

Jennie Boden  14:15 

But I think it needs to go beyond that. I think what you said is really pertinent. It is the materials you’re serving up, but it’s also the materials that the board members are asking for. As Lynette said, we do, we do some assessment work where we will actually pull apart a board packet or board meeting book, and then we’ll feed all of those reports back to a board. And on average, with the assessments that we’ve done of this type, the boards will come back and say, you can eliminate approximately 50% of the reports in this board meeting packet. And what we’ll often hear is that report is in here, it’s a holdover from a board member who retired from the board 15 years ago. And nobody has stopped to say, we don’t need this report anymore, or it’s not strategic in nature. Sometimes I’ll tell, when we’re working with a client, I’ll say, I have a niece who’s in her mid to late 50s, and she complains that her parents are in her business. And I’ll say, stop calling them every day, and they won’t be in your business. So what you said is definitely accurate, right? This notion of where the CEO, senior management team invites the board, yes, they will go. But the board also has a responsibility in calling for this shift, in wanting a shift to be more strategic. I also think that part of the challenge is most board members don’t know what that looks like. 

Doug English  15:43 

Talk to me about this continuum. I’m confused about it. What’s governance and what’s strategy and where is that line? Help our listeners to understand which leads, which like, how does that work? 

Jennie Boden  15:54 

For us, strategy is a part of a governing responsibility. Now there’s strategic planning, which is fairly discreet, there is strategic learning, which we encourage on a regular basis. There is functioning at a strategic level. And I’ll give you an example of that. We believe, for example, that board members are not checkers, they are chess pieces. I’ll say that again, board members are not checkers, they are chess pieces. And so, the notion of that is that you strategically deploy and recruit your board members based on the talent, treasures, skills, attributes and values that they bring to the table. 

Doug English  16:42 

I love that metaphor, Jennie, that’s a great metaphor. 

Jennie Boden  16:46 

It’s an important one, and it’s an important one not to see just in terms of hard skills, but also human skills. You can have the best hard skills on paper and on resume, but be a lousy communicator, and you can bring a board to its knees quicker than you know anything that you’ve seen. And so, we’re seeing in the national data and in our client data it, it really matches up almost exactly the same that there is a move away from prioritizing hard skills in board recruitment and nominations to prioritizing softer skills. Case in point, the most valued skill in the boardroom, in terms of research that we’ve done, is the ability to focus on the future, which is a strategic focus, and yet, if you look at what board members are prioritizing still, they’re prioritizing financial skills and the like. Not to suggest that financial skills aren’t important. Clearly, board members are a fiduciary. They have a responsibility to do their fiduciary duties, to execute them well and thoroughly. But the larger, especially with the consolidation of credit unions and having more and more large credit unions, the Chief Financial offices are growing, and they are taking care of the detail. They’re taking care of the cash counts and all of those things that you used to have in a really tiny, tiny Credit Union. The board used to be responsible for those things, not anymore.  

Doug English  18:16 

So it seems like your story with the board that hired the racehorse, and then the racehorse started running, and the board freaked out and realized that they set a vision for what they wanted to be, right? Why did they hire the racehorse? They probably hired the racehorse because they wanted to be double the size they were as an institution, and then they identified they’d hire a leader, they could help them to get there, but they didn’t realize that they themselves needed to be different than they were as well. So is there a strategic design that you guide your clients to, to the board makeup, to the backgrounds or the tenure or the term limits? There’s so much stuff here, talk to me about all those things. 

Jennie Boden  19:03 

Yeah, there. There definitely is. And it takes into account all of those things, right? It takes into account the strategic plan. It takes into account who’s already on the board. It takes into account whether or not you have current term limits, even if you don’t have term limits. Do you have any other tools for succession planning and turnover, like an emeritus board member program or an associate board member program. Are you even having conversations about board accountability? We have a client who uses, and I would say this is a best practice. I would say it’s a very bold best practice. We have a client that actually uses peer evaluations as part of their nominations process. They conduct peer evaluations. So if we were all on a board, you would evaluate me, the two of you, I would evaluate you, the reports and the results of those evaluations would go to the nominations committee. If I was running to be reelected, if you gave me low marks in any number of areas that would be taken into consideration by the nominations committee. I’ve actually had a client, bravest committee I’ve ever worked with, say no to a couple of board members based on peer evaluation. No, we won’t actually afford you even an interview, and won’t put you up on a slate for renomination based on your peer evaluation. That is about, not the best interest of those board members, but the best interest of the credit union. Tough, right? Tough decisions and tough choices, but there are some great groups making those decisions. Lynette, I keep interrupting you. Sorry. 

Lynette Smith  20:49 

That’s okay. And another thing that one of our clients does, and I found it very interesting, they have a board governance and a nominating committee that includes members that have HR experience. They know what the criteria are. They know how to interview and I thought that was a very good strategy to use when it came to recruiting board members. I ran the nominating committee board for ACUC, for several years. You really have to have a visionary leader on the nominating committee, and I think that’s very important. When I talk to board members and they say they don’t get any training. They don’t go to conferences and see what other credit unions are doing, and get that education on that topic of board governance, because I can speak from my experience, that’s how we found out about it. I would go to conferences with my board, and there were topics on board governance. That was years ago. But I tell you, 30 years ago, when I came into the industry, there was very little discussion about Board Governance. It is now very important that board members, just like you have your management team, they’re trained. The board members need to be trained as well. And when I find out we haven’t gone to a conference in 10 years, that concerns me, because they really don’t know what’s going on out there. If you don’t know what’s going outside, how can you really provide input to the credit union’s strategic growth? 

Doug English  22:33 

Let’s just talk a bit about a strategic board of directors. What does that mean, and how would you go about developing a strategic board? 

Jennie Boden  22:44 

So, I think a strategic board of directors is akin to what I shared earlier, this notion that board members are chess pieces, not checkers. It’s this notion of thinking carefully about the kinds of skills, attributes and values that you want and need on your board, and how do those align with your strategic plan and where you’re going? I will tell you that I would take a board member that has incredible curiosity and the ability to vision the future, even for a credit union, over an auditor or a financial planner 10 days of the week. I don’t think that that’s typical. I think most people think, oh, we need a financial mind around the board. Let’s look for a butcher, a baker and a candlestick maker. Meaning we need a lawyer, we need a marketer. We need somebody in advertising. We need an auditor. We need somebody with an MBA. Sure, listen, I think lawyers go to law school, and I think law school teaches you to think and write in really important ways. I think you definitely need people who can answer, review and understand PNLs and financial statements in the like. But strategic thinkers can do that if they’re really, really smart. Again, I would take somebody who is super smart, really curious, a great strategic mind, over somebody who just had limited skills and was just really, really good in finance. 

Doug English 24:15 

And technology, right? The pace of technology change is just wicked for all of us to try to keep up with. But I imagine getting someone to be a volunteer that has the technology background is a real challenge. 

Jennie Boden  24:29 

Yeah, although the reality is, think about it. If you are going to make a huge core conversion or a huge technological change or adaptation, you’re not going to rely on your board to fully advise you on that. You want somebody on your board, even in the area of technology or AI, who understands those issues from a strategic point of view. It’s just like with law. You know, if you have a legal issue, you’re not going to turn to somebody who sits on your board who comes from a law firm, and look to that law firm for pro bono coverage. Unless you’re a really super small credit union. You’re gonna either have an internal general counsel or you’re going to hire external legal counsel. We have clients that have an in house counsel, counsel for the board and a separate legal counsel for the credit union. That’s kind of the norm these days for larger credit unions. Sure, it’s good to have a lawyer in the room who can maybe say to the board, hey, I think we should look into these three issues from a strategic point of view, but I can guarantee you, your chief technology officer is going to be pulling their hair out if you have somebody in the boardroom who’s constantly looking over their shoulder and telling them what to do. Lynette, you’ve certainly been on the C suite end of this. I’m curious about your thoughts.  

Lynette Smith  25:51 

Diversity at the board level is very important. We have done studies that have shared that boards always say, I want diversity, I want diversity. But what they value in the room, diversity slides to number six, and number one is someone to be strategic. And that’s what Jennie is referring to, no matter of their race or color, they need to be strategic. Also, and I can share with you from my experience when I would be sitting in as the CEO, and I would notice the glassy eyes in the room when they were doing the financials, I would then meet with those board members independently and have a one on one conversation. Because you’d be surprised sometime when you do, board members have the smartest guy in the room is the finance, right? Well, you have to bring those other board members along so they could at least be engaged and ask strategic questions. It is so important to bring the entire board along, not just the executive committee, but the entire board, needs to get the education. And this day and time, there’s in person, meetings, conferences, but there’s also online training that board members can get. We used to require that our board members had so many hours per year of training online, and that was important. I can’t emphasize the importance of how training is for board members. 

Doug English  27:33 

Do you see that specified in a board governance document? Or do you help with that, like, do you come back with a number of hours that you suggest that a board have in each different area? 

Lynette Smith  27:47 

Oh, absolutely, we had that in place. And board governance committee, which was formed at the beginning years before that, before we even got quantum, we had to form a Board Governance Committee to even select quantum as a consultant to work with. So I think it’s very important. 

Doug English  28:07 

Is that the first step for our listeners is? If you think this is something to explore, is the first step a Board Governance Committee? 

Jennie Boden  28:15 

Yeah. I mean, that’s definitely a must if we were going to make a recommendation in a credit union does not have a governance committee, we would actually recommend an integrated governance and nominations committee, and that would definitely be a must. And for any of your listeners, we’re happy to share, free of charge, draft template for a governance and nominations committee. And you can share our contact information certainly at the end, and they can receive that information from us to the issue of training. Yes, more and more training requirements are certainly being included as part of a robust board policy or governance manual. I’m actually working with a client right now and in the midst of doing one on one sessions with both their board members and their supervisory committee members reviewing with them the results of their peer-to-peer evaluations and their board and supervisory committee director skills evaluations, and then preparing individual development plans based on those results. And so, if somebody scored themselves low for example, this is a fairly large credit union where risk, once you hit 5 billion, you need to start to prepare for 10 billion, because at 10 billion, additional regulators start to come into play, and a risk management committee is something you need to be really focused on at the board level. And so, one individual, for example, scored themselves fairly low on risk. And so we’re talking about, where can you avail yourself of additional resources around risk management so that you can increase your knowledge and your skills in that area? Just as one example, we’ve done development plans for others and in reading between the lines and some of the narrative responses, I remember getting pretty excited and reading one board members narrative responses, and then one on one meeting with that person saying, I think you might want to be the board chair one day. And the person said, how did you know that? And I said, I could just tell in reading your narrative responses, right? So let’s develop plan to get you ready to be the board chair. Leadership development, I think, is a key critical element and a responsibility of any credit union board. 

Lynette Smith  30:29 

I agree. And one of the things that we did that was pretty bold. Well, I don’t know how bold it was, but it was very helpful, the onboarding. Once you get that board member on there. What do you do with it? You know what we did? We had a board buddy system. So, you partner a new board with a senior board, and then they have those meetings and those questions that that new board member is afraid to ask in the room, if the CEO may not pick up on it, they can meet their board buddy, and then an assessment is done every six months to see is it working? So, the Chairman has to make sure everybody in the room is trained and equipped so they can make the strategic planning necessary to lead the credit union. I’m very passionate about people helping people membership. Our membership is growing, but what are we doing? How are we helping our board members? That’s one of the reasons I came to join the Quantum team. We want to help board members. Leadership starts at the top.  

Doug English  31:38 

Let’s use this opportunity to pick up what’s been a hot item from the NCUA, which is a succession planning. And succession planning, in this case, in regards to the board, board leadership, executive leadership. So tell us what your guidance is around that? 

Jennie Boden  31:56 

We were pretty interested when the NCUA came out with that proposed rule a couple of years ago. And actually, I want to thank my colleague Lynette for pushing us a little bit. We had never really taken a position on any proposed rules in the past, and she brought it to our attention. Our team talked about it and decided, you know, even though many of our clients probably didn’t like the notion of another NCUA rule, we decided to take a positive position on the rule. Because we feel so strongly about the importance of leadership and the importance of planning for leadership succession. It was the first time we had done so. And you know, originally, the proposed rule was really focused on CEO succession, and we encouraged the NCUA to think also about board succession. I’ll tell you, the first client that I had in the credit union space was looking at wholesale turnover of their CEO and about 40% of their board within the two-year time span. One of the key responsibilities of any board is succession. I think it’s really important. Just as you think about consciously, who do we want on the board in the future? It’s not necessarily true that the board that got you where you are today is going to get you where you need to go tomorrow. And the same thing is true of the CEO. You could have an incredible CEO who got you to where you are today, but maybe it’s not the same kind of skills, attributes or values that you need to go where you’re going tomorrow. And just as I talked about the racehorse example, earlier, you have to be really conscious about what you’re looking for. You can all talk and say, hey, yeah, yeah, yeah, we want a racehorse, we really want to grow, but do you and do you know what it means to have a racehorse? And have you talked about that as a group, what it’s going to be like to manage a racehorse? And if the same board has been working with the same CEO for 20 some odd years, are you ready for a shakeup? Because that’s what you’re going to get. By definition, it’s going to be different, and so being really clear and doing the work ahead of time, both at the board level and at the CEO level, to be conscious about the changes that you’re looking for and the changes that you’re about to invite are critical. 

Lynette Smith  34:31 

I feel that credit unions need to be more proactive in succession planning. I’ve seen where CEOs have dropped dead. No succession planning. I mean, why aren’t we make putting that at the forefront? Whatever the regulation outcome will be, we don’t know yet, but I think it’s so important to our survival as an industry. When I was a CEO at Treasury Department Federal Credit Union. I would go to these conferences. I’d look around the room. Everybody had white hair and were predominantly white back in early 90s. That’s an opportunity. So you need to look at your bench, at your credit union, and see who can step up if that CEO or that VP of Finance decides to leave or, God forbid, something happens. Succession planning is so important, and we do a very good job at it, if I may say, they help me with mine. 

Jennie Boden  35:35 

Yeah, I think it’s also this notion, I worry sometimes when we see our boards focusing on succession planning, and they’ll say, Oh, well, you know, here you’re going to be the secretary, then you’re going to be the treasurer, and then you’ll be the vice chair, you’ll be the chair. Well, not everybody is cut out to be a chair. Some people are really good at being the person behind the person. Some people make great vice chairs. Some people make great treasurers. If I was on someone’s board, you would clearly want me on a governance committee, or you would want me in a strategic planning role. Listen, I have to be pretty good with numbers too, but you probably wouldn’t want me as a treasurer. It goes back to that adage of board members or chess pieces. Deploy me where I’m best suited, and don’t switch me around just to switch me around because I might get bored, or because you think I need a new challenge, or you think I need to kind of understand all aspects of governance. No, I’m there to serve. Succession planning is about finding out, understanding the talent you have, developing it and executing it, deploying it, whether it’s at the board level or as Lynette said in the C suite.  

Doug English  36:56 

Thank you for your ideas around board governance and how it combines with strategy to protect and grow the credit union movement. You mentioned that you have some resources that you’re willing to share with the listeners, and we’ll make sure to have some links posted in the notes for this podcast. But what specifically are those resources, again, that they can use to try to help evaluate or bring their board forward? 

Jennie Boden  37:29 

We’d be happy to share our board governance and nominations committee charter, as well as our board member job description. We have a library that is available online. We have probably 70 or more board governance policies in the credit union space, also in the general not for profit space. Those are being readied for distribution in the coming months, but the credit union ones are available online for purchase, but we’d be happy to share to your listeners free of charge, those two policies, the governance and nominations committee charter and the board member job description. 

Lynette Smith  38:05 

That’s what I love about working with Quantum, because we are a L3c we’re low profit, limited liability organization. Our goal is to really serve the common good, and we focus on credit unions and also nonprofits. It’s very rewarding to work in the nonprofit space, and we want to give back. We want to make a difference, and that’s why I’m semi-retired, wink, wink. And working because I see that this is a great resource for credit unions that they don’t always take advantage of.  

Doug English  38:44 

Lynette and Jennie. Thank you so much for your time today. Thank you for your ideas and your leadership in the credit union movement. We need to protect and grow this important part of the economy for generations to come.  