Solving the Credit Union Riddle of Profit Taken from Members Versus Value Returned

Mike Higgins Jr.

Mike Higgins Jr.

Banks and credit unions share a similar business model -- how each makes money is identical -- but that is where the similarity stops.  A bank board will advocate for the maximization of long-term value for stockholders, which is easily measured.  A credit union board will advocate for member value, which is hard to define and subjective.

Simply stated, the challenge is striking the appropriate balance between profit extracted from members and value returned to members.

Rather than pitting the board and CEO against each other, a governance scorecard can be used to galvanize and focus everyone on what is best for the long-term interests of the credit union and its members.

This session will explore a framework to help the board think strategically and make the right decisions; focusing upon the essence of a successful business model, while avoiding information overload and micro-management which creates unnecessary friction in the CEO/Board relationship.

Ultimately, it’s about being an advocate for the member, and the degree to which that is being realized can be measured and used as a differentiator in your credit union.

About Mike Higgins Jr.

Mike Higgins, Jr., is a partner in the firm of Mike Higgins & Associates (MHA).  His consultants work with clients in the financial services industry.  His primary areas of focus are performance management, performance-based compensation, board education and strategic planning to maximize member value.

Mike also serves as faculty on the Pro-Con Board Governance Institute.

Since 1998, Mike has worked with over 300 community-sized credit unions and banks.  Mike has presented his contemporary approach to managing performance to numerous state and national associations.  He coauthored the book Performance Compensation for Stakeholders: 14 Prerequisites for Success.

Prior to joining MHA, Mike was a consultant at Deloitte.  His areas of focus were business process design and information technology.  During his tenure at Deloitte, Mike worked with clients in the financial services, retail, manufacturing, logistics, aerospace and defense, and state government sectors.

Mike received his MBA from the University of Kansas and an undergraduate degree in finance from Nebraska Wesleyan University (NWU).  While at NWU, Mike was an Academic All-American and was inducted into the NWU Athletic Hall of Fame.

Mike is a founding investor in Pacific Enterprise Bank which is headquartered in Irvine, CA.

View All Sessions