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Speaker Focuses on Importance of Culture Board Succession Planning
Wednesday, April 12, 2017 6:35 AM

In Tuesday afternoon's breakout sessions, Tom Glatt, Jr., with Glatt Consulting addressed credit union leaders on preparing for succession and having a succession plan of action and execution.

Glatt said that beyond the responsibilities required by regulation, rules, and policy, the credit union's board also has responsibilities related to board values and culture. Because values and culture are unique to individual institutions, there's no "common" list of board responsibilities, which presents a major challenge to board effectiveness. That's mainly because boards don't fully understand (or can't clearly communicate) the responsibilities associated with their culture, Glatt says. As a result, new board members are often chosen because of their skills relative to legal or regulatory requirements but without much regard to the cultural skills they possess (or don't possess).

Glatt suggests that as a general rule, to ensure leadership continuity, a board must: clearly define the board's values and culture; clearly define required formal and informal board skills; ensure that the nominating committee knows the required skills and is capable of evaluating a candidate's qualifications in light of such skills; and ensure that nomination criteria are communicated to the membership.

He notes that in preparing for succession, a board must make critical decisions on board values and culture, board skills, board member skills, and supplemental factors.

"To prepare ourselves for succession, we challenge the nominating committee to find this person," Glatt said. "But what kind of board member are we looking for? What sort of skills and attributes, but also what cultural attributes do they need to have? It's critical that the credit union board formally define what makes up these values and culture."

"We're trying to answer questions in the planning process so we're more intentional and knowledgeable about what our board needs in terms of skill sets and capabilities," Glatt said. "You have to be sure those skills are well known to the membership so they can prepare themselves to serve if and when asked."

Glatt defines culture as those attitudes and behavior characteristics of a particular group, while values are defined as one's ideas and judgments about what's important life. Shared values go into decision making in the boardroom. He specified board culture, distinct from credit union culture, as those attitudes, behaviors, and characteristics of the group.

"Culture influences how board members engage with one another in the boardroom, so it's very important to explore. Board members must ask, How do we know what our culture is?"

Glatt asked the audience how they would explain to him if I walked into their boardroom what their culture is all about. "Communication among board members is essential to answer these questions. Put in words what you do when you all get together, not from a practical process standpoint, but rather what is it we do when we get together and what do we want for our members?"

One way is to do an affinity diagram, which is an exercise that shows what values, dynamics, culture, etc. are at play within a group. The process is to begin by supplying every member of the board with a pad of Post-it Notes and a Sharpie pen. Each board member then writes down the things they think define the board's culture. The rule is one idea per note. After everyone writes their answers, they take their notes to the wall and tack them up.

"With everyone's answers on the wall at the same time, you begin to see whether you have affinity around certain things," Glatt said. "If a nine-member board has nine Post-it Notes that say the same thing, then you know there's consensus around the idea of a particular cultural touchpoint."

With this easy exercise, Glatt says, "Hopefully, you'll be surprised in a good way that you're on the same page, and you can more easily articulate to others what your culture is."

It's important to note that not every member necessarily has to possess each skill directly. Rather, it is the combined skill set of individual members that must equate to the full skill set required for effective governance. Boards must identify the high-level skills that the board as a body must possess to be effect at governing and to live up to both regulatory and cultural requirements.

Generic skills are skills required for active participation in credit union governance processes, meaning skills that every board member should possess. Functional skills are "professional" skills the board believes need reinforcement or are necessary to further enrich the board at the time of nomination of new board members.

Supplemental factors are in addition to cultural and skill components and supplement the evaluation and nomination process of recruiting new board candidates, including board member geographic distribution; board demographic diversity; diversity reflective of the field of membership—taking care in the implementation of such factors and work to ensure inadvertent discrimination does not occur due to such factors.

Once you've identified your board's values/culture, required skill sets, and supplemental factors, it's time for action in the areas of re recruitment, nomination, and orientation.