OTTAWA, Ill. - Jack Teausant has a simple way of assessing the state of board succession planning at many credit unions: go to a large credit union convention and take a good look at attendees.
“It concerns me when I go to these different conferences and see lots of gray hair or very little hair in the audience,” said Teausant, president of Financial Plus Credit Union. “We really need to do a much better job at cultivating new board members and developing them into leaders who will be running the credit union years down the road.”
Teausant means what he says, and the $151-million Financial Plus here takes succession planning seriously. It has had an associate director program in place for 12 years, recently naming two new associates who became the fourth and fifth members to enter the program. FPCU also has strategies in place to maintain an engaged and productive board.
Associate directors sit in on board meetings, participate in board discussions and planning sessions, and undergo training under CUNA’s Volunteer Achievement Program (VAP). They do not have a vote, and are replacements ready to stand for election when a board seat opens.
After advertising for the positions in the CU’s newsletter, the latest applicants–both in their 40s–were selected for director seats by the credit union’s nominating committee. They are expected to serve as associates for approximately four years before being nominated as full-fledged directors.
“So often, in the old days, boards would pick someone they were most comfortable with, rather than someone who is most qualified,” Teausant told Credit Union Journal.
Not only is the associate program a good way to immerse understudy directors in the CU’s culture and develop effective and productive board members, it’s also a way to “see if they can get along with others,” Teausant explained, “because personality is a big deal.”
According to Teausant, it takes about four years for associates to take a director’s seat since they’re first required to complete all 43 initial VAP courses, at least 12 per year, before being eligible for the board.
“If a board seat opens unexpectedly, they could be nominated for a seat before four years,” Teausant said. “But they still have to complete all of their VAP modules at a 12-a-year pace.”
That education requirement doesn’t go away once associates join the board. Existing board members stay current with VAP continuing education, completing 12 programs each year. That ongoing education has allowed the CU’s tenured board to “remain current and productive,” according to Teausant.
“If they continually educate themselves, they can’t become static and say ‘Don’t bother me for 20 years.’ You have to be ever-changing and always looking for new and better ways to compete and serve members,” said Teausant, who added that the education requirement–instituted 12 years ago–also helped weed out non-productive directors. “We went from 14 board members to seven.”
The emphasis on education–whether it’s grounding associate directors in the CU before they become board members or continuing education for a tenured board–helps the CU compete and grow, Teausant believes. Over the last five years, Financial Plus has grown from $104 million in assets to $151 million.
“The challenges credit unions face today and all the things management is responsible for require that the board clearly understand what we are talking about, whether that’s from an asset/liability standpoint, managing risk, or understanding financial reports,” Teausant explained. “Board members who serve on delinquency committees need to understand collections. The whole board needs to have an understanding of budgeting and pricing concepts...They are very important members of committees we set up and have to understand what we are doing. It helps immensely in board/manager relationships. You don’t have these confrontational situations where board members don’t trust management.”(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
