Tap Your Board for Support and Guidance
May 19, 2020
Strategic Link partner, Jeff Rendel, is an expert in credit union board-CEO relationships. Here he offers advice on how a credit union’s Board of Directors can help navigate operations during uncertain times.
Credit unions, like so many industries, are making significant changes as they navigate the new operating landscape.
Communications and media plans are in motion. State and local government recommendations and orders are being monitored and implemented, and business continuity plans are providing structure and guidance. These systems are in place to serve members in a safe, sound, and secure manner.
But there’s another valuable resource available to credit unions — board members. They bring outside expertise and fresh eyes that, now more than ever, are critical to innovative operations.
Credit union CEOs may need specific expertise, stakeholder communications, or support with priorities and focus. The CEO will present a revised budget and need the board’s patience and backing. The overall strategy may not change, but its execution will be placed on pause. Board members should remain open to what the CEO needs to ensure the viability and continuance of the credit union.
In addition, a board’s capital position gives it a bird’s-eye view of how the credit union can weather limited growth and earnings. Scenario planning allows a board to view “what if” projections and better understand decisions that may be necessary. Run multiple situations with significant changes in growth, interest margins, delinquencies, and losses. Observe the effect on earnings and capital. Preparation and awareness are key for potentially significant decisions.
Board members are business professionals, too, so they understand important issues such as staff morale and reputation management. News of layoffs, furloughs, business closings, and economic contraction will affect members and their finances.
Board members can ask important questions, such as: What shifts are occurring in deposit flows? What slowdowns are taking place with loan payments? What assistance programs can the credit union offer or develop? What changes might be seen in delinquencies and charge-offs? How does marketing and business development fit in this environment?
These types of observations can help credit union executives stay on point as they work through the new operating landscape.
This is a demanding time for credit unions and their leadership. Through a united voice, a credit union’s board can complement its CEO’s leadership through dependable attention, confidence, and commitment.
Editor’s Note: NWCUA offers a wide variety of resources for credit union board members on its Directors’ Resource Center. Log in and check it out today.
Strategic Link business partner Jeff Rendel is a certified speaking professional and President of Rising Above Enterprises. He works with credit unions that want entrepreneurial results in sales, service, and strategy. Visit his Strategic Link page to learn more about partnering with him.