Your credit union’s Board of Directors can either be your biggest asset or your biggest liability. But making the Board into an asset is easier said than done.
Credit unions across the country struggle with developing effective Boards. And to those Boards feeling lost, the path forward seems like a well-kept secret. If you’re in that situation, the example set by SAFE FCU’s Board of Directors can help.
SAFE FCU is a South Carolina-based credit union with more than $1.7 billion in assets. The credit union has an incredible Board, led by Chairwoman Dr. Kay Oldhouser Davis. I recently had the chance to interview Oldhouser Davis about what makes her Board so successful.
Here’s what she had to say.
Invest to Succeed
When asked about the Board’s greatest success, Oldhouser Davis said it was having SAFE FCU’s brand professionally done.
“Our greatest success is that we spent the money and the time to go through a professional branding exercise. That has done so much to transform our culture and give us a focus. We all live and breathe and know our brand. It’s part of everything the credit union does.”
She said the Board had two main roles when deciding to hire an outside professional:
- Making the choice to invest in the project
- Refusing to micromanage the project
In Oldhouser Davis’ words: “The Board said, ‘We’re going to make it happen. We’re going to put the money in the budget. We’re going to hire Mark.’ Then, the Board got out of the way. We dictated, basically, that it was going to happen. Then we turned it over to staff to work with Mark and his team.”
Investing in their brand has led to fantastic cultural achievements aligned with their vision of “family helping family.” For instance, the credit union gave each staff member $200 as part of their celebration for reaching $1 billion in loans. The first $100 was for whatever the employee needed, and the second $100 was for making a positive difference in the community in a way that was meaningful to the employee.
As Oldhouser Davis said, “If that’s not family helping family, what is it?”
Create a Succession Plan
Like many other credit unions, SAFE FCU discovered succession planning was one of the biggest hurdles for the Board. The Board needed a built-in process for new Directors to reach the Board and receive proper training along the way.
Oldhouser Davis describes SAFE FCU’s path to the Board:
“We set up two Member Advisory Boards, and we hope those are going to be feeder systems into us. In fact, they already are. We look at our Supervisory Committee as a wonderful training ground…as older Board members have retired, our most qualified candidates to replace them have been members of the Supervisory Committee. Our first Advisory Board Member has been appointed to serve on the Supervisory Committee.”
The credit union also implemented an onboarding program for new Board members. Following a Board Assessment with On The Mark Strategies, Oldhouser Davis formed a committee of the four newest Board members to rethink their onboarding.
This committee spent a year developing the program, which was recently deployed for the first time. It involves meeting with key staff members and learning about expectations. After all, being a Director is a huge responsibility to a membership base of thousands of people.
As Oldhouser Davis said, “They sit down with the CEO and Board Chair to talk about expectations. You’ve got to do that. There’s got to be an agreement that there are expectations.”
Build Trust with Your CEO
Not every Board has a good relationship with the credit union’s CEO. But a good relationship is exactly what you need if you want to grow the institution.
Just as with new Directors, that relationship starts with expectations. Oldhouser Davis discussed how she begins her relationship with a new CEO:
“I say, ‘I’ve got a couple expectations that you need to know before you sign this contract. The first one is: you are going to be present when the examiners show up. The second is: you and I are going to talk. We’re going to meet, and to get this going, we’re going to meet once a week.’”
Over time, these talks resulted in Oldhouser Davis and SAFE FCU’s CEOs getting to know each other. They weren’t strangers; they were partners in the credit union’s success. Such a high level of trust developed that regularly scheduled calls became unnecessary.
Whenever the two leaders wanted to meet, they could simply call each other to discuss an issue.
Frequent meetings between the CEO, Executive Committee and full Board also built upon this burgeoning trust. Quarterly mandated meetings quickly became monthly meetings, as all parties recognized the value everyone brought to the table.
“We built a huge level of trust over the years with communicating. We had to set up the structure and the expectation it was going to be there. And I now hope it has become part of how this Board, whoever’s on it, will operate with whoever is the CEO.”
Implement Board Best Practices
SAFE FCU has a Board that gets things done. But how? What’s their secret?
They implement best practices geared toward accomplishing their objectives. These best practices boil down to three key areas:
- Planning
- Leadership
- Motivation
According to Oldhouser Davis: “Every Board should be doing a strategic planning session, and it should be another one of those open and free discussions. We use Mark, and we’ve come to trust Mark. You’ve got to have a facilitator who is comfortable pushing the Board to look at things in different ways.”
Of course, the best plan is the one that gets implemented. And you need strong leadership to drive credit union objectives to completion.
“You’ve got to have strong, effective and trusted Board leadership,” Oldhouser Davis said. “You’ve got to have someone in those positions who knows how to run meetings, knows how to work with people and knows how to get things done.”
Lastly, a Director’s fiduciary responsibility to the members should motivate every action the Board takes. In other words, your heart needs to be in it. It’s not about you; it’s all about what’s best for the members.
“We work for our members,” Oldhouser Davis said. “The CEO works for us; we work for our members.”
To learn more about SAFE FCU, visit their website.
And if you need to jumpstart a more effective Board today, book a free consultation with On The Mark Strategies to discuss a Board Assessment. It’s time to make the Board an asset to your credit union.
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