Credit union boards are becoming more interested in whether their composition mirrors that of their memberships. And their memberships are becoming more diverse with time.
So, it’s not surprising that more than half of the respondents to the survey for the new State of Credit Union Governance 2020 report said they’re looking for demographic diversity. This and many other governance topics are discussed in this most recent episode of the CUES Podcast.
“This signals a bit of a shift,” says Michael Daigneault, CCD, founder and president of CUES strategic provider for governance Quantum Governance, Herndon, Virginia, and a co-author of the study. “Traditionally, we’d often hear financial literacy, ability to understand the financials …. Of course, some kind of specific operational expertise and financial expertise or professional services expertise can be quite handy. But this year we heard something that we think is very important ... the No. 1 response from folks all across the country was that they were looking for demographic diversity. Fifty-three percent of folks said when they’re looking for board members that’s what they’re looking for. And 51% said that they’re looking for the ability to focus on the future.”
“Both of these were higher than financial literacy and the various different types of specific operational or professional services expertise that people traditionally look for,” adds Daigneault, who will present at the 2020 Execu/Summit, March 8-13, Park City, Utah, and at the 2020 Director Development Seminar, July 15-17, Montreal, QC.
Report co-author Matt Fullbrook, manager of the David & Sharon Johnston Centre for Corporate Governance Innovation at the University of Toronto’s Rotman School of Management underscored this idea that boards are now looking for a new set of skills in their new directors.
“When we look at, on the one hand, the question of ‘What are credit union boards focusing on when recruiting,’ we often find … ‘resume skills,’” says Fullbrook, a faculty member at CUES Governance Leadership Institute™, June 7-10, Toronto, and lead presenter for Board Chair Development Seminar, July 13-14, Montreal, QC. By “resume skills,” Fullbrook means hard, measurable abilities. “But when we compare those to what actually make a director useful or valuable once they step in the board room, the skills look a little bit different.
“In fact, we see a much stronger focus on soft skills or interpersonal skills,” he explains. “So, what floated to the top was, in fact, an ability to focus on the future. Following that was independent-mindedness that we defined as ‘not being afraid to go against the crowd, a lack of groupthink.’
“Behind that, we have financial literacy and a strong understanding of the membership, both of which, of course, are not surprising to anyone who would sit in a credit union board room,” he notes. “Following that we have consensus-building.
“So, it’s a really strong emphasis when we’re asking about what makes directors effective. The emphasis is on soft interpersonal skills and the ability to help lead your team toward effective decision-making.”
The show also gets into: