Much has been said and written about board governance and CEO oversight, but what do CEOs really need from their boards?
We asked a number of CEOs, “What can your board do to become a real strategic asset?” Distinctively situated, CEOs gave this shared guidance: Learn the credit union business.
It’s a simple tenet: No one should agree to take a director position unless he or she is prepared to comprehensively study for boardroom dialogues. Beyond reading the board packet before meetings, directors should make certain they comprehend the moving parts of the credit union and stay up-to-date with industry changes. An education plan (and budget) for the full board and each director is helpful, as well as a brief educational presentation every few board meetings. Several CEOs believed that their exchange of ideas with their boards was much better as the full board took the time and effort to study the credit union.
CEOs also recognized their responsibility to keep directors in the know, especially between board meetings. Some CEOs sent an email update each quarter and sometimes between board meetings, while others simply made phone calls to board members. A few even met their boards for informal cups of coffee.
Boards should also accept matter-of-fact, entrepreneurial endeavors. CEOs noted that growth in the past came as a result of boards supporting aspiring ventures. They also insisted that maximizing the long-term, sustainable value of the credit union best represents the interests of members.
It is important that boards productively examine strategy. Not one CEO said, hinted, or implied that he or she demanded lockstep approval of their strategic plans and resented pushback. Truth be told, CEOs wanted active deliberation in the boardroom. In CEOs’ views, boards performed best when they hit upon the suitable sense of balance between professional collegiality and ensuring the safety, soundness and sustainability of the credit union.
Additionally, boards should keep us encouraged. The relationship between a CEO and his or her board is reciprocal: a CEO relies on the board for guidance just as much as the board relies on the CEO for execution. While a board and a CEO will work together to develop major objectives, the CEO and his or her management team are tasked with drilling down and developing detailed strategies, tactics, investments, timelines and responsible parties.
CEOs found much value from their boards when their boards regularly acknowledged strategic progress, success, and appropriate course adjustments along the way. The kind of encouragement that worked best with CEOs was beyond brief congratulations when a balanced scorecard metric was met. Boards that encouraged their CEOs most issued deep reassurances that current strategies and the CEO himself or herself were right, fitting, and proper for the credit union. In short, the board was confident in the strategic direction and CEO leadership of the credit union.
Boards and CEOs recognize that they and their members will get more value if the partnership at the top is strong. The best leadership partnerships are forged when there is shared respect, active commitment to the future success of the credit union, and solid pledges of confidence. A board of great strategic value understands the credit union, establishes a balance of risk and reward, digs deep to understand the right direction for the credit union, and believes in its CEO to execute in the finest fashion.
Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with financial services providers that want elite results in leadership, sales and strategy. For more information, contact Jeff at jeff.rendel@RisingAboveEnterprises.com, visit www.RisingAboveEnterprises.com, or call (866) 340-3770.