By Jeff Rendel, Certified Speaking Professional
Much has been said and written about board governance and CEO oversight. But, what about the say-so at the other end of the board table: What do CEOs really need from their boards? We asked CEOs: “What can your board do to become a real strategic asset?” Distinctively situated, CEOs gave this shared guidance for boards.
Learn the Credit Union Business
It’s a simple tenet: No one should agree to take a director position unless he or she is prepared to comprehensively study for boardroom dialogues. Beyond reading the board packet before board meetings, directors should make certain they comprehend the moving parts of the credit union and stay up-to-date about industry changes. An education plan (and budget) for the full board and each director is helpful, as well as a brief educational presentation every few board meetings. Several CEOs believed that their exchange of ideas with their boards was much better as the full board took the time and effort to study the credit union.
CEOs also recognized their responsibility to keep directors in the know, especially between board meetings. Conferences and chapter meetings were fine for industry trends and new ideas from networking, but CEOs found added value with extra communication between their commonly scheduled meetings. Some CEOs sent an email update each quarter and, at times, between board meetings. Some simply made phone calls to board members. Others met their boards for informal cups of coffee. The CEOs weren’t as worried about their email syntax, calls from home, or lack of saucers as they were with just letting the board know what was on their minds.
Accept Matter-of-fact, Entrepreneurial Endeavors
Perhaps lessons learned over the last several years or aversion to risk that sometimes grows with the size of the credit union caused the desire for risk to be lopsided. CEOs noted that growth in the past came as a result of boards supporting aspiring ventures. CEOs also insisted that maximizing the long-term, sustainable value of the credit union best represents the interests of members. A meaningful debate about business issues and possibilities is what CEOs wanted most.
One method CEOs used often was placing possibilities for growth and new business plans into three categories of markets – core, adjacent, and transformational. In all cases, CEOs focused first on maximizing core markets (Example: full mobile access to the credit union). If the credit union was not making strides to maximize service to members, new markets were tabled for discussion. Next, CEOs examined a few opportunities in adjacent markets, all related to financial services (Example: Business lending CUSO or escrow services). Finally, and on a smaller scale, CEOs reviewed single, transforming opportunities (Example: buying a bank).
Productively Examine Strategy
Not one CEO said, hinted, or implied that he or she demanded lockstep approval of their strategic plans and resented pushback. Truth be told, CEOs wanted active deliberation in the boardroom. In CEOs’ views, boards performed best when they hit upon the suitable sense of balance between professional collegiality and ensuring the safety, soundness, and sustainability of the credit union.
One CEO referred to his Board’s examination of strategy as “levelheaded stress testing” and “speculating out loud.” As you would expect, CEOs approached their boards ready to support their own wisely developed strategies. However, CEOs wanted chief strategic decisions – and full board support – to materialize from dissimilar and, ultimately, unified views. CEOs appreciated that variation in outlook, risk tolerance, and standpoint are required in order to bring perspective and specialized knowledge to bear on important deliberations. This kind of dialogue helps establish shared belief, consensus, and commitment.
Keep us Encouraged
The relationship between a CEO and his or her board is reciprocal: a CEO relies on the board for guidance just as much as the board relies on the CEO for execution. Add support and encouragement to the list of CEO “must haves.” While a board and a CEO will work together to develop major objectives, the CEO and his or her management team are tasked with drilling down and developing detailed strategies, tactics, investments, timelines, and responsible parties. Add the day-to-day management of the credit union to the mix, as well. Being a CEO is a busy job.
CEOs found much value from their boards when their boards regularly acknowledged strategic progress, success, and appropriate course adjustments along the way. The kind of encouragement that worked best with CEOs was beyond brief congratulations when a balanced scorecard metric was met. Boards that encouraged their CEOs most issued deep reassurances that current strategies and the CEO himself or herself were right, fitting, and proper for the credit union. In short, the board was confident in the strategic direction and CEO leadership of the credit union.
Boards and CEOs recognize that they and their members will get more value if the partnership at the top is strong. The best leadership partnerships are forged where there is shared respect, active commitment to the future success of the credit union, and solid pledges of confidence. A board of great strategic value understands the credit union, establishes a balance of risk and reward, digs deep to understand the right direction for the credit union, and believes in its CEO to execute in the finest fashion.
© 2013 by Jeff Rendel. All rights reserved.
Jeff Rendel, Certified Speaking Professional, and President of Rising Above Enterprises works with financial services providers that want elite results in leadership, sales, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.