How do you build strong board relations?

Getting along well with your board is a key to any credit union chief executive officer's (CEO) longterm professional health. No manager wants board/ management relations to be strained.

"You have to respect the roles and responsibilities that the board and CEO have," says Dean G. Christensen, CEO of Coast Central Credit Union, Eureka, Calif., with assets of $295 million and 43,000 members.

"There has to be a good working partnership between the two," he explains. "I often hear that CEOs have problems with their boards. It's like any other relationship. You have to keep working at it. You can't give up."

Achieving a healthy relationship with your board isn't as hard as it might seem at first, says Christensen. Communicating effectively, defining roles clearly, and establishing trust are the first steps toward harmonious board/ management relations.

"A good relationship between the CEO and the board chairman is critical to a good relationship with the board," adds Christensen. "The chairman is the key contact person for communicating with the board.

"The chairman and I speak frequently. I try to keep the chairman informed on issues. Then we decide whether those issues need to be communicated to the whole board or just to the executive committee, or if they need to be handled by the board at all.

"The most common complaint you'll hear from CEOs is about boards being too involved and trying to micromanage the credit union and not delegating enough to the CEO. That's a problem I don't have. The key is making sure the board has a CEO they can trust.

"Communication is vital. You have to work on it constantly. CEOs should know what their boards want to know and how much they want to know. That's something that has to be worked out between the board and CEO. For each board and CEO it's probably different.

"When I first became the CEO, there was a period of time when the board was more involved in some areas than they are now," Christensen recalls. "Trust has been established over time. We worked on things together. Goals and objectives were set and achieved. Now the board is very comfortable with delegating certain duties and responsibilities."

Christensen says he uses the strategic planning process to involve the board in setting goals. But he's in charge of carrying out the plan.

"CEOs should be in charge of taking care of dayto-day operations, operating under the clear goals and objectives that are mutually agreed on by the CEO and board.

"I think that as we keep going through the cycle of strategic and operating plans, and performing on those plans, we continue to improve and increase our level of confidence."

Ruth McGill, CEO of Genesis Federal Credit Union, Springfield, Va., with assets of $52 million and 11,000 members, takes a different tack. Her board divides responsibilities among its members.

"As the issues that credit unions are facing become more detailed and specialized, we've turned a lot of the 'homework' over to committees. We work through about seven different committees-each one specializing in areas such as technology, finance, and member education.

"They hash out all of the research and details and bring recommendations to the board so our meetings are kept short. The board places people they think are most qualified on each of these committees. When the recommendation comes to the board, we're very confident that it's gone through the best brains we have.

"Since we've developed this respect, the board is willing to do things through the committees, which has been much more efficient." McGill adds one note of caution: "I never hit them cold with anything. If there's something I think needs to be discussed, I generally give them a headsup and provide them with back-up information before the meeting so they aren't stunned or shocked. And they do the same for me. We've never had any surprises at the meeting."

An informed board is generally a happy board, agrees Sally Lou Cloyd, CEO of SOC Credit Union, Troy, Mich., with $128 million in assets and 18,000 members. She spends a lot of time informing and educating her board.

"In addition to their regular board packets, they get a packet of materials that includes all the staff newsletters, so they know what's going on at the staff level," Cloyd says. "They also get a series of articles I've selected for them on topics pertinent to our business plans, goals, or products we're exploring. It gives them a quick insider's view to what's going on so they're never blindsided.

"The board packet arrives a week before the meeting. If they have questions, we can answer them before the meeting.

"And every month the board has professional development sessions on timely topics. We've covered Y2K and related insurance issues with our CUNA Mutual representative. Y2K is an important topic and we take time at every board meeting to discuss it."

Cloyd also tries to keep the board oriented toward the future. "We've tried to refocus the monthly board meetings on current and future topics rather than a rehash of what's gone on in the past. We've moved to a consent agenda that has all the financial data on it, which they receive a week before the meeting.

"Some boards spend a lot of time at their meetings hearing about how much was spent on office supplies. We don't bother with that because that's all history. We're interested in hearing about what's going to happen next month, next year, and in five years. We talk about what we'll do next month that will help us get where we want to be in five years."

That's not to say that board and management never disagree. "There's always a tug-of-war over budget issues, and I think most managers want more technology than there's money for or more salary increases for their staffs. It's a balancing act and it's a division of resources," Cloyd says.

"You have to know what the resources are and sometimes there are different ideas about how to allocate those resources. Should the money go into products and services? Should we raise fees to buy more hardware? That's where most of our heated debates occur-over fees and our fee philosophy. I see it as a way to get money to provide services, but the board is concerned that members will see it as a punishment. It's a healthy debate.

"I think we have a team relationship," says Cloyd. "A lot of times it's very evident that a manager works for the board. I work with the board. We work together as a team to bring products, services, and financial stability to members.

"Obviously, you have to keep the credit union's health and viability at the forefront and build a shared understanding that our job is to make sure this credit union is here one year, five years, and 10 years down the road.

"It's all in communication. There's no other magCharlsie Griffith, CEO of Group Service Employees Federal Credit Union, Tulsa, Okla., with $8 million in assets and 1,975 members, plans to retire this month.

Looking back over her career. Griffith says she's learned to use board members' talents, which might have nothing to do with financial services, to help the credit union and make the board members feel valuable to the organization.

"I hear from a lot of CEOs about problems they have with boards, and I've never had those problems. If you treat their ideas with courtesy and respect, you can come to an agreement on anything.

"I would tell the CEO who takes my place to respect the board members' ideas and let them use their talents. They're a great help. They can do things that the CEO can't do without them. I would tell the CEO to let the board do its work.

"We have a wonderful marketing program and that's come almost entirely from the board and committee members. They take great pride in their work."

Copyright Credit Union National Association, Inc. Jan 1999
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