Bachelor’s degree required, MBA preferred.”
It’s not uncommon to see this statement at the end of credit union CEO recruitment ads these days. Even “MBA required” is not unheard of, as the complexity of leading a financial institution continues to grow with each passing year.
This is quite a contrast from the early days of credit unions, when having a head for numbers and a willingness to help your fellow man were the basic requirements.
Even 26 years ago when I participated in my one and only CEO search as a CU director, education had become one of our key requirements.
According to the CUES Compensation Survey, 66% of CEOs participating in the 1998 survey had a four-year degree or higher. Just nine years later that number had reached 79%.
Good Qualities No Longer Sufficient
With credit unions expanding into more complex services like business lending; serving larger, more diverse memberships in an extremely competitive environment; and building more multi-faceted delivery systems, it’s clear that higher levels of education, combined with management experience are needed in credit union corner offices.
But that’s not the only place education requirements are needed. They are also needed in credit union boardrooms.
Just as a head for numbers and a willingness to help your fellow man were once the basic requirements for managing a CU, key qualities of a CU director were also the willingness to help, plus good judgment–the ability to listen to an issue and make a fair and logical decision.
While these qualities are still of the utmost importance, they are no longer enough. Today’s directors are being asked to approve investments in complex financial instruments, determine long-term strategic direction and hire/retain a high-performing CEO.
Directors need to supplement their good judgment with knowledge and, most importantly, continued learning. This is vital both for keeping the credit union on firm footing in today’s rocky economy as well as ensuring its existence for future members.
When CUES surveyed credit unions in 2006 for CU Board Governance Guide and Best Practices, we found ongoing education for directors to be firmly entrenched in the cultures and procedures of most credit unions, with nearly 100% of respondents offering educational opportunities to all board members and 22% also offering special officer training.
Having opportunities available is not the same as participating, however. And it’s not uncommon for me to hear from CEOs who want to know how to “get” their directors to attend training.
A big step in the right direction would be for each individual board to make participation in a certain level of continuing education a re-nomination requirement.
According to CU Board Governance author Berit Lakey, “Less than half (45%) of the responding credit unions require board members to participate in training activities. And, surprisingly, 35% do not require any form of reporting after board members return from a training event. Of those who do expect a report, only 15% say that directors are responsible for turning in a written report.”
Being Busy Not An Excuse For Not Being Educated
We all know that volunteer directors are busy people, but don’t let this be an excuse for those who aren’t taking part in continuing education. Training doesn’t require days away from families or the office. For example, outside speakers on pertinent topics can be part of your regular board meetings. This might even be a way to enliven the meetings and keep the agenda on track.
Other options for delivering training to time-starved directors include Webinars, which can often be replayed at board members’ convenience, and self-paced online courses, like CUES Director Education Center, which are available 24/7.
With choices like this available, participating in ongoing education becomes more about motivation than time.
In fact, lack of motivation may well be the biggest obstacle. It shows itself in statements like this: “I’ve been on this board for x (fill in any number) years, and there’s very little I don’t know about what credit unions do and what our members need.”
While experience is an important quality in a board, it can also produce blind spots. For progress and improvement to continue in any type of business or group, everyone must keep learning.
If you don’t already have a continuing education requirement for your directors, consider it. The future of your credit union rides on the decisions your board makes today. Make sure they are well-informed ones by ensuring you have motivated and knowledgeable directors on board.
Fred Johnson is president/CEO of the Credit Union Executives Society (cues.org), Madison, Wis.
