Recruitment Stifles CU Boards
MADISON, Wis. – Credit union boards continue to have trouble attracting younger, more diverse volunteers, even though the issue has long been cited as a top priority within the movement, according to a new study conducted by the Filene Research Institute.
The study, Tracking the Relationship between Credit Union Governance and Performance, said finding qualified volunteers who are willing to commit continues to be a major problem among credit unions. Many boards seem to be adopting a wait-and-see attitude rather than emphasizing more rigorous recruiting practices such as evergreen lists, according to the findings. Several interviewees stressed that it is hard to remove underperforming directors – even when their terms are up – for fear of hurt feelings.
The study had the following major conclusions:
* That effective meeting management is a challenge, and boards seem to have only a vague sense of how their meeting time is spent
* A dearth of board introspection means board chairs and other directors need to be proactive in formally evaluating their own contributions
* One way to encourage better governance is to demand individual improvement
* The board/CEO link drives financial performance. The only governance practice that yielded a strong positive correlation with actual credit union ROA performance was whether boards felt they had an effective CEO evaluation in place.
The study also found that volunteer credit union directors mirror the feelings of their counterparts on publicly held boards in saying their boards need to spend more time on strategy and risk management, and less time on operational matters and routine items.