Some veteran board members quip they can remember thedays when their biggest challenge was choosing the color for thecarpet at the newest branch.

Welcome to 2013. Today, directors find themselves tacklingissues such as mergers, complying with regulations, successionplanning, attracting young members, field of membership changes,and balancing budget realities against the need to introduce newtechnology.

Steve Winninger, former CEO of the $1.5 billion Lake Trust Credit Union in Lansing, Mich., and now a governanceconsultant based in Williamston, Mich., offered an overview.

“In the old days, a willingness to serve was about the onlycriterion for being on a board,” he explained. “But today, creditunions are so much more complex and there's more focus on boardresponsibility.”

Winninger added, “If I were a director of a credit union, Iwould be even more concerned with regulators because I think we'veseen them act very decisively with respect to corporate. If yourcredit union runs up against a problem, the day is going to comewhen they are going to come after directors. I think it's going tohappen.”

Meanwhile, are members tuned in to all the changes? Winningersuggested if things are going well, members don't think ofthemselves as owners but as customers. But if things start goingsouth, they start responding as owners and get involved. Heacknowledged that most of the credit unions he works with aretrying to improve. Over time, as a credit union grows, the boardneeds to shift its focus and they may require help doing that.Winninger said the board has the two key jobs of setting policies and hiring a CEO who makes those policies happen.

“We've heard many stories about hiring and firing decisions thatseem capricious. A good governance system assures that the righttargets and boundaries are articulated and the CEO is heldaccountable,” Winninger said. “A CEO should also get credit for thegood things that happen.”

Winninger said although some boards have not changed with thetimes, many others are becoming more sophisticated. Anotherobservation is not many young people are serving as volunteers. Indeed, too many directors, he stated, look likehim – a white male with gray hair. The board makeup may continue tolook that way unless young people and others are asked to join, headded.

“Under old style governance, the board was concerned withsuperficial things such as the color of the bricks or approvingthings after the fact. I guess it was very much what peopleexpected when they signed up for the board,” said Ron Carlsonchairman of the $500 million Community Financial Credit Union in Plymouth, Mich., who hasbeen on the board for 30 years.

Today, there's certainly an attempt by the regulatory agenciesto make sure board members have basic fiduciary knowledge.

“Boards have come to realize they're providing the direction forthe credit union. This is where we want to go and it's the CEO'sjob to get us there,” Carlson said.

Next Page: Dealing With Regs

One thing boards struggle with is complying with a constantflood of new regulations, Carlson noticed. He said CFCU, whichrecently changed from a federal to a state charter, has establisheda fulltime position to track regulatory issues. If there's aproblem, there's a potential for someone to say, “Well, the boardtold me to do it this way,” Carlson said. There's also a constantstruggle to make a credit union relevant to younger members whowant mobile banking, apps and other innovations.

Meanwhile, board members are encouraged to take part inavailable education opportunities. One of CFCU's vice presidentsprepared an online tutorial on fiduciary and regulatory issues thatis probably more helpful than other canned packages because onnumbers and issues specific to the credit union, Carlsonoffered.

Regulations and open FOMs are on the minds of the directors atthe $1.65 billion Washington State Employees Credit Union in Olympia, accordingto Ritz Koontz, the cooperative's chairman. So far, regulationshave not been interpreted well, Koontz said, but the credit unionand board are still held accountable to do the right thing. Theboard just voted to have an open FOM prompted by the state'sgovernment employment rosters decline and shrinking agency budgets.The credit union now uses the moniker WSECU. With a large portionof new members coming from the families of state employees, thecredit union had already been drifting into an open FOM and as aresult, the board wanted managed growth.

“One thing that has not changed is that we want to stay abreastof current issues and feel we are keeping up with the times,” saidKoontz, who has been a WSECU member for 40 years and has served onthe board for six years.Technology has moved to the fore. For manyyears, the main way WSECU met its members was most likely at thebranch.

“Giving our members the technology they want is one of the moreinteresting, challenging things we're looking at,” Koontz said.

One indication of just how complex board decisions have becomeis the topics that boards thought might require 10 minutes ofdiscussion ends up eating 45 minutes of meeting time, Koontz said.Still, she underscores the importance of asking staff to bringissues to the board at the early stages. There are two WSECUretreats a year where the board digs more deeply into credit unionconcerns, Koontz said. For instance, expanding beyond a FOM thathistorically focused on state employees, was a big issue, sherecalled.

Technology is also one of the main focuses at the $106 millionDaneCounty Credit Union in Madison, Wis. Chairman Joe Guastella hasbeen on the board for 13 years.

“We're looking at technology trends – mobile banking, bill pay,remote deposit. How can we attract new members? What are theylooking for? How much of our resources do we want to allocate,”Guastella said. “We kind of want to wait and see where others aregoing,”

Guastella emphasized he's been blessed with what he considers agreat board. Members have different backgrounds and listen to eachother. Those diverse backgrounds means they may offer ideas theothers hadn't even considered, he said.