Category: Directors

Each organization will have its own mandate and culture which will influence the way directors are recruited. Here is some universal advice I can offer:

• Describe the duties of directors in your organization. Is it strictly a policy board or are directors volunteers for the organization that also take part in the day to day work?  Once a director’s “job description” is formulated it will be helpful in describing the job to prospects.
• Are there any gaps on your current board? You may have had a director with certain skills retire.  In that case, those skills will be easier to identify for the purposes of replacement. Alternatively, the activities of the organization may have changed such that you require certain experience to round out the knowledge on your board. Those gaps should be first identified then described in your recruiting material.
• Understand why someone might want to serve on your board. Some boards are prestigious, while others are a stepping-stone to other work or provide a way for members to participate and “give back” because of commitment to the organization’s cause. It will help in your recruitment to know which of these motivators are significant reasons for serving as a director.
• Be truthful about the amount of work involved and the expectations of a director. When you go to all the effort to recruit a good director you want to ensure that they likely will stay on for awhile. Surprising them with what may be more work than appears in the job description is a sure way to discourage a prospect.

There are many ways to tailor the recruitment of directors to your organization. It is important not to leave this important job to chance or word of mouth. The result of doing this task well will be more effective governance and more engaged directors.

Credit unions adhere to co-operative principles, one of which is a commitment to open democratic member control. Some credit unions have refused to be overtly involved with the election of directors, in the belief that to do so would offend those democratic principles. In those cases, it results in both the board and management playing a much smaller role in board succession than their private sector peers.

However, fully two-thirds of co-op boards are also involved in selection, i.e. in the presentation of the names of individuals to the membership for consideration.

A credit union board can respect democratic principles while providing for its own succession. The board can recruit and should endorse candidates for election. When it does so, the members have the ultimate authority to accept or reject the board’s recommendation. This preserves the democratic member control envisioned in the Co-op Principles.

As Canadians, we are familiar with elections for public office. The situation with co-operative boards differs in many respects from those elections: the nomination process and party system screen candidates to make sure their views align with the stated views of the party. The officials’ performance will be recorded by the media and eventually evaluated by the public.

An individual elected to a credit union board of directors is in a very different situation. Most credit unions do not have any political parties or alliances to identify candidates, so absent a nominating committee, the screening is done by the rules setting the requirements to run.

Another difference is that the performance of directors takes place in the boardroom where much of the credit union’s business is confidential until released. This makes it nearly impossible to hold a candidate to account for election promises because no one knows whether the matter was even raised by that candidate, never mind convincing the board to take action.

Third, the board of a credit union acts as a whole. While vigorous discussion should be encouraged within the meeting, once the board makes a decision, all directors should stand by it. They definitely should not discuss it or oppose it outside the boardroom. If a director feels that s/he must openly oppose a board decision, s/he must resign. This is the duty of loyalty that directors owe to the credit union.

A credit union can respect the power and control in the hands of the members with both involvement in the election process and transparency of factors in the decision-making.

The evaluation of board member requirements should happen every year and should b the basis for board member recruitment.  In this way, the board can be responsive to changes in circumstance on the board, especially changes to board composition and the strategic plan.

Choose from among those skills that the board has determined are important. The specific technical skills needed by the board may change over time, depending on the board’s needs so the assessment should be conducted each year. Typical technical skills that the board may want are:

• Financial/Accounting Expertise – designation?
• Communication Skills
• Marketing Skills/Experience
• Regulatory / Legal Knowledge
• Risk Management Knowledge
• Experience in Strategy Formation & Implementation
• Experience in Human Resource Management
• Experience in Small or Medium-sized Business
• Negotiation / Meditation Experience
• Senior Management Experience

Boards will also want to investigate the “softer” skills desired and possessed by board members. Such skills include:

• Alignment to the Vision — as already mentioned this is probably the most important aspect for a new director to possess. It ensures that s/he will be pulling in the same direction as you steer the credit union to future successes.
• Integrity — they have personal integrity and insist that the firm behaves ethically.
• Courage — they have the courage to ask tough questions and to voice their support of or opposition to management proposals and actions. Their loyalty to the members’ interests may demand that they express dissent and persist in demanding answers to their questions.
• Good judgment — they focus on the important issues and base their decisions and actions on sound business and common sense.
• Perspective — they have broad knowledge and experience that they apply to discussions and decisions.
• Commitment to learning — they are prepared to take the time to get to know the credit union, know their job and stay up to date. They take responsibility for their own education in areas of their contribution to the Board and participate in educational sessions offered by the CU.
• Independently Minded — suspends decision making until all arguments are made and is not swayed by “group think.”
• Strategic Thinker — can see the long-term impact of proposals as well as how they can aid or impair the credit union’s operations.
• Consensus Builder— takes others’ inputs and builds to a better conclusion.

Be sure that any candidate for director is aligned with the vision and values of the credit union.  Make sure that s/he wants it to succeed.  Also important is the potential director’s character.  It is a familiar adage that boards should: “Recruit for character and train for competence.” While skills are important, they can be attained after election to the board.

A director can be highly skilled in a particular competence yet poor in alignment and behaviour. Directors can be trained in the skills necessary for a board position but is often impossible to train for character once a director has been elected.