This letter is in response to the Feb. 16 article “
Through our work with boards and management at credit unions of all sizes, we’ve come to see good governance as a key success factor for these member-owned financial cooperatives. Given the renewed energy of banker-led attacks on the credit union business model, its importance is only likely to grow in the coming years.
Good governance isn’t easy by any means, but in our experience it’s remarkably straightforward. In Callahan’s consulting and strategic work over the years, we’ve learned to look for five holistic characteristics as indicators of enduring good governance:
· A shared understanding among board and management about why their credit union exists. Call this “mission,” if you like.
· A shared understanding of the governance model their credit union uses (and the ability to discuss it in comparison with other options).
· A clear understanding among both groups of their respective roles and responsibilities within their governance model.
· A shared commitment to ensuring volunteers have the skills and knowledge necessary to meet their responsibilities with confidence.
· A commitment among board members to the difficult task of self-governance.
Any credit union board and management can achieve this if they want to. We regularly see our clients align quickly on the points where they have the greatest opportunity to improve, agree to invest the time and resources to do so, and make the personal commitments to one another to follow through. This is how to achieve meaningful improvement in this challenging but critical area.
