Last month I spoke at the CUES Executive Summit in ColoradoSprings. This conference was attended by some of the most dedicatedand intelligent directors and senior leaders we have met in thecredit union world. I'd like to share with you some of the valuablecontent delivered, as well as some of the important questions thatpeople were asking.

Revisit the mission of your credit union. All future decisionswithin your credit union should start with your mission. What isthe purpose of your credit union? Why are you on the board? Whatare your beliefs? 

This exercise in thinking is not just about words. The missionof your credit union will affect all future decisions, includingyour strategies for the future, your talent decisions and thepeople you recruit to your board. We need to recruit the bestbrains in both our management teams and boards who will stimulateimportant conversations and ask the right questions.

What does it mean to be a good board member? Asking the rightquestions, being engaged, listening to members, ensuring that theright data is collected and assessed, preparing for meetings,approving policies and ensuring that your actions reflect themission statement of your credit union are allimportant. 

Are you getting the right quarterly data, and does your boardhave a dashboard that can track progress on all key strategicdrivers? Are you heads up on current trends in governance andregulation, such as the whistleblower regulation in Dodd-Frank andwhat implications will eventually trickle down to creditunions.

Credit unions are not immune to national policies that arefocused on banks for today. These new regulations may be coming toyour neighborhood in the near future. Most importantly, are youexecuting independent business judgment? 

What are the jobs of the credit union director? Most directorscan answer this question with the following response: plan, direct,control the credit union, protect the member and overseemanagement. However, our point of view is a little more focused onthe two main roles of directors of publicly traded companies:validate strategy and validate succession planning. These twoweighty jobs require both courage and engagement.

There are no 10-year plans anymore. Providing oversight forcontinuous two-year planning cycles is the job of the board.Understanding member satisfaction and monitoring financial metricsis the oversight that is needed to ensure the safety and soundnessof your credit union.

Contingency planning is a must. Taking an inward look at yourcredit union and board's succession plan can be challenging butessential to your job as a director. These are healthyconversations that require courage and delicacy. Do you have peoplewho represent the voice of your members on your board? Do you havedirectors who understand technology? When evaluating candidates, doyou establish board criteria based upon where your credit unionwill be in five years and what skills will be requiredthen? 

Succession planning also includes a review of committee chartersand setting criteria for service as well as training for boardmembers. One meeting per month may not be enough anymore to fulfillthe fiduciary duties of serving as a board member. We predict thatas board service for public companies has become more timeconsuming, so will serving as a credit union board member despiteyour volunteer status. Setting criteria for attendance, so thatpeople show up regularly and are engaged, will ensure the bestpossible minds being brought to the boardroom.

Duty of loyalty assessment. Duty of loyalty involves asking theright questions. If need be, you can bring in independentconsultants to assist in this process. Do you review your ethicspolicies on an annual basis? Are you providing special loans tochildren of board members? Are there things you see that don't feelright? Reviewing your ethics policy annually can wash out theseissues. Dealing with these often sensitive decisions can preventfuture NCUA actions.

Board assessments and on boarding. Board assessments do not haveto be punitive or personal.When you ask questions like, Do youreceive your board materials in a timely fashion? How are yourconversations at the board level? They do not single outindividuals. They provide an important context for improvement inboard processes and effectiveness.

Qualitative comments may reveal anecdotal comments such as JohnDoe falls asleep at meetings. However, with a skilled independentperson administering the survey, comments can be vetted andindividual conversations can take place afterwards to allow forimprovement and dignity.

The board assessment process should be driven by the governancecommittee. This committee can also focus on the education andtraining of younger board members and the establishment of boardmentors.With increased regulation and increased personal liability,if 30% of your board is an underperforming asset class, or if twoor three people are carrying the other 10 people on your board,creating a process to address this is an important role of thegovernance committee.

Beginning this discussion process and then having an independentthird party present it, can be extremely helpful. Often anadditional emeritus status can be created on the board. When ayoung person comes on the board, do you set criteria and standardsto ensure that they truly understand what duty of care reallymeans. Do you provide training for them so that they can come up tospeed within a one-year learning period and be held accountable tostandards established?

I ended my presentation by encouraging participants to continueto learn. And most importantly, board members and CEOs have animportant obligation to share this learning within theirorganizations, boards and senior leadership teams to developcreative and innovative strategies to meet the current globaltechnological, demographic and regulatory transformations takingplace at a rapid pace. 

Stuart R. Levine is chairman/CEO of Stuart Levine &Associates
Contact 516-465-0800 or stuartlevine.com