Volunteers Weigh Value of Performance Assessments
MAUI, Hawaii — Whether your board is “rubber stamp” or “watchdog,” what you want it to be is a “challenger,” according to Mary Beth Spuck, CEO of The Paragon Group.
Spuck cited various types of board members, as defined by the Filene Research Institute. The rubber stampers just passively approve everything without researching and asking the right questions on management. The scouts are very in-tune to the membership’s needs but exhibit less strength in oversight. The watchdog, Spuck explained, is “when you overuse your strengths, they can become weaknesses and meander into micromanagement.”
Finally, the challenger board is one that can serve as the necessary monitor of credit union activities while also remaining sensitive to changing member needs. “While it is difficult to bring that together, it is possible and one of the ways to do that is the board assessment,” Spuck said.
However, when Spuck asked the room of more than 100 participants in the break out session whether they preformed volunteer assessments or not, only a couple raised their hands. One attendee admitted her credit union didn’t really know where to begin.
Another said in their experience it caused contention among the board members. “The last one was about five years ago and it about tore our board apart. The last question was, ‘would you vote to re-elect this board member.’” Spuck acknowledged that there are certain sensitivities that may need to be observed to make an assessment effective rather than antagonistic.
Volunteer assessments are really not so much about past performance, Spuck said, but should be future oriented. The key questions to answer are where are we? and how do we improve from there?
There are a variety of ways to approach assessments, too. The entire board can be assessed, or it can look at individuals. There’s a peer feedback model, board chair assessment or a 360-degree overview where management assesses the board. This last version, she quipped, is also “where we see the most heartburn.”
Spuck advised that expectations need to be set from the start. First introduce the idea to the board, and then move onto the decision whether to perform the review. Next determine who would be reviewed. She added that before the process even begins, determine how the results will be shared. After the assessment is done, actions steps need to be stated and implemented based on the results.
The various areas to be covered in a board assessment include strategic planning, relationship with the CEO, understanding and monitoring of products and services, financial management, risk management, board development, effectiveness and governance, and public relations and advocacy. “Board members are not expected to know the details,” Spuck explained, “but you’re expected to go get them.”
One volunteer whose board performed assessments said, “I think the greatest hold up was the fear of what we would find.” Once they moved beyond that, the process went smoothly.
When studying the results, disparities in answers to some questions could indicate that the board isn’t necessarily all on one page, Spuck said, and they should be followed up on.
Additionally, a debate arose over the pros and cons of term limits with some saying it kept chairmen and CEOs from getting overly chummy but others said artificial limits killed institutional knowledge.
Members 1st FCU in Mechanicsburg, Pa., has performed individual evaluations as well as peer-to-peer, according to Chair Jackie Eakin, for the last two years. She then privately shares with each board member whether they scored at, above or below their peers. After sitting through the session, she told Credit Union Times in an interview later, that the question of ‘would you re-elect this board member’ is on her credit union’s assessments but she plans to re-evaluate that.
Eakin added that they learned a lot in performing the assessment the first year that helped make the second one more useful. The first time around “made us more effective at doing the assessments,” which were introduced when the previous board chair pushed to refocus the board to be more strategic, a process that began about five years ago, she explained. Following the last board assessments, she said the board has definitely gotten better at looking at the credit union as a whole and leaving the tactical to management.
Frank Hedley, supervisory committee chair at San Francisco Police CU, told Credit Union Times after the session that his credit union did not perform formal assessments. Because of the nature of the field of membership, more informal assessments worked best. However, San Francisco Police CU is looking at expanding its FOM to other first responders and as other board members could be added, it might prompt a more formal process. He and a colleague added that one board member had been removed by board vote but that person got re-elected by acclamation.
Twinstar Credit Union CEO Marshall Ellison said he felt that board assessments were important, and it’s a work-in-progress at his credit union. The practice was ended because it wasn’t appropriate. “We had one that didn’t work out really well…It was more focused on what people were not doing,” he explained.
Right now the Olympia, Wash.-based credit union is focused on trying to clarify who brings what to the table and obtain more direction on the education needed.