Do you yearn, as I often do, for a simpler time? Who wouldn't? In the early days of the credit union movement, board members came together and looked at reports every couple of weeks, typically monthly. They talked about loans, committee activities, and quarterly they talked about declaring a dividend based on net income. CUNA and the leagues provided a form to use for the minutes. The board secretary filled in the blanks, signed it, and all returned to their career jobs.
The minutes form included a place for all the essentials. There were spaces for attendees' names, total assets, delinquency, and a few other bits of routine data. I looked at many handwritten versions of these minutes while examining CUs in the early 1970s. The simplicity of the minutes mirrored the simplicity of the board's actions.
In the modern era, directors find things quite a bit more complex since the advent of share insurance. There have been three decades of volatile economic conditions and growingly complex member demands. Directors need a way to prepare for effective board meetings.
Initially, credit union people felt that more information would be better than less. As if organic, agenda packets have grown over time. Increasingly sophisticated managers added stuff. Better educated on credit union issues, directors requested more stuff. Improved technology made available more reams of stuff.
Recently we have seen publicly conducted corporate and political criminal cases. These cases help us to see that information can hurt you. Information can hurt you if you don't get it and need it. Just as significantly, information can be harmful when directors receive it and do not comprehend its meaning; directors receive it but do not study it, and /or directors receive it and the board does not act on it.
The board meeting is a credit union's decision focal point. The wisdom of directors blends with the expertise of management, face-to-face. Full communication can take place. E-mail and phone decisions are expedient and helpful at times, but do not promote debate and discussion.
The agenda packet today arrives on traditional paper, in an e-mail, or in a secure place on the Internet or an intra-net. Whatever form, it remains a major tool for helping a credit union's leadership make better and faster decisions. Here is a brief look at the principles of efficient and effective board meeting agenda packets:
1. An agenda packet should comply with any governing rules that set requirements for it.
2. Directors need an adequate amount of time to prepare for the scheduled actions. All reports and proposals will arrive in time to permit printing, indexing, and insertion into the packet. The agenda packet will be in the directors' hands a week before the meeting. An issue that develops inside that week will wait a month. If it cannot wait it's probably an operational matter management needs the authority to handle.
3. Directors need an optimum amount of information about each decision that it faces.
4. Directors need an optimum amount of information about the credit union's past to help it define an ideal future. Unnecessary information can distract the directors. Directors' personal liabilities may increase due to all the information they ignore because they judge it unnecessary.
5. Directors can find easy-to-read, pertinent monitoring information quickly, and understand it. Information in graphic form using aggregate data is preferred. For example, provide a chart showing the delinquency ratio over 13 quarters. Do not provide reports listing members' names and account numbers and balances.
6. A concise, narrative report that is pleasant to read and explains what's going on behind the scenes is better than a page of numbers. For example, tell the story behind the net increase in loans, "There are two primary reasons net total loans grew 3.5% over the last quarter. First was Members went on a car-buying spree. Second was our new cross-selling incentives for staff."
7. Every report in a packet will fit one of three categories: monitoring as a standard business practice, special needs monitoring, or it reflects progress on our plans. The board, with the advice of management, will decide any other information it wants regularly and in what format.
8. Management may voluntarily provide a report, chart or other presentation of information from time to time. Its purpose must be clear. Boards can respect management's interest in details. Management will exercise restraint in providing new information not requested by the Board.
9. Quarterly financial analysis is preferable to monthly to avoid getting bogged down in unimportant fluctuations. Charts should show three years of quarterly data to provide a smooth picture of trends.
10. Historical information plus other information from any source should support big picture and future thinking. That means the information is devoid of operational details. Starve the board of minutia and the directors are more apt to work on a vision-level where their contributions can have the greatest influence.
Boards need information. Management needs to provide it. Perhaps these 10 ideas can make any agenda packet more effective.
Dan Clark is a governance consultant, planning facilitator, and weight-trainer for agenda packets. He is also a CU CEO in Tallahassee, Florida. Reach him at 800-310-2308 or dan
