CU Directors Turn Feisty At Talk Of Aging, Need For Succession Plans

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An overflow crowd of credit union directors turned out for an educational session during CUNA's Future Forum here, but many didn't agree with what was being said.

Raising their hackles was discussion that touched on the age of credit union volunteers, the need for board succession plans, and even term limits.

Walking the fine line as presenter and moderator at the session was George Towle, a consultant with Madison, Wis.-based ProCon Group and a former executive with CUNA and the California league.

Things got feisty at the interactive session almost immediately when Towle asked his audience to suggest why a credit union needs to create a board succession plan. One of the very first reasons listed: the graying of the boardroom.

Aging and its potential effect on a person's performance as a board member have always been touchy subjects, and Towle attempted to treat the topic delicately, taking great pains to point out that some elderly board members remain spry and important contributors to a credit union. Nevertheless, he reiterated that getting older is an issue that must be addressed.

"If for no other reason than there's a day we are born and a day that we die, aging is an issue," he suggested, noting that even when a person is of sound mind and has many ideas and intelligent perspectives to bring to a board meeting, the realities of growing older can still be problematic for a credit union board. Hearing loss, he suggested, is a very real example of a symptom of aging that can make it difficult for an older board member to serve up to his potential.

But even trying to give this topic the kid glove treatment didn't stop some from being offended at the notion that age is an issue. "I take exception to age being an issue. It's not about age, it's about being stale, and you can be stale at 21 just as easily as at 81," one attendee piped up. Towle agreed that age alone doesn't automatically render a previously useful board member useless, but carefully tried to explain that there are some very real physiological consequences of aging that can and often do impair a person's ability to be a good board member.

When Towle moved onto another reason for establishing sound board succession policies-ensuring a diverse board that is representative of the CU's FOM-a few attendees took issue with that concept, as well.

"I don't see why the board has to 'look like' like the credit union's members," an older, white female director argued. "It is possible for a good board member to represent the credit union's membership; all of its membership."

Again, Towle agreed that good board members have all of their members' best interests at heart, regardless of age, race and other demographic factors, but emphasized that having a good mix on the board is an important goal.

And diversity doesn't necessarily refer to things like age, sex and race-it also applies to how members are eligible to join. "We've gotten surreal as far as fields of membership go," Towle suggested, noting that as credit unions add new groups or convert to community charters, they must work to ensure these new groups or communities have representation on the board.

While it would be impossible for a 200-SEG credit union to make sure every single group is represented, the key is to make sure there isn't a vast preponderance of directors all from the same group, he suggested.

Towle advocated using individual, board and peer assessments to evaluate a credit union board's effectiveness and to reveal where there are shortcomings. Among the factors to look at:

How knowledgeable is the board member?

Does he/she come prepared for the meetings?

Does he/she use the board's time effectively?

What does he/she bring to the table?

These same questions can be used in evaluating the board as a whole, he noted, adding an important question for the board to consider as a whole is, "Are we truly candid in our board discussions," he added.

"What it comes down to is, are you simply sucking air for an hour and a half every third Thursday of the month? If so, do yourself a favor and do the rest of us a favor and move on," Towle advised.

Another good tool is job descriptions for board members. "When we think of human resources, we always think about paid staff, don't we," he observed. "But our directors are human resources, too."

Of course, job descriptions are only useful if they are revisited regularly and updated as needed and if they are actually being used instead of just gathering dust, he said.

But once a board is convinced that having a board succession plan is important-and that new blood and diversity are also vital-the question becomes how to create a "pipeline" of new candidates.

Internally, many credit unions are using advisory boards to help satisfy the need for representation of new groups and communities as well as a way of cultivating future board members. "One credit union in Colorado has a rule that each board member must bring in one name of a potential future board member," Towle related.

Externally, directors should look to community leaders, small business owners, trade or professional organizations, local colleges, business executives and civic organizations to find potential board candidates.

"Yes, these are busy people, but the busiest people are the same people who will find time to be a contributing member of your board," he counseled.

Other topics Towle discussed:

* Term limits. As one Future Forum attendee suggested, the quickest way to alienate half your audience at a credit union event is to just mention term limits, and indeed, a good portion of the crowd at Towle's session were dead set against term limits. But several directors in the crowd related that they had term limits at their credit unions, and it's been working for them. Still, the idea is not wildly popular among board members. "We have a 90-year-old guy on our board who has been there forever, and when we brought up the idea of term limits, he said, 'if you have term limits, I'll sue,'" one attendee shared with the audience. "He told us that if we wanted to get rid of him, we'd have to get the membership to vote him off the board."

* Board size. The majority of people in the room indicated their boards were made up of seven or fewer directors, but a goodly number reported they had as many as nine. The crowd gasped when several people said their boards were even larger, with at least one having 13 directors. Even though Towle advocates a diverse board that represents the variety of members a credit union serves, he suggested credit unions with larger boards seek to streamline their numbers.

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