By Tony Ferris

As credit unions face an increasingly complex environment shaped by AI, digital disruption, evolving member expectations, and growing competition, the role of the board of directors has never been more vital. However, many boards continue to rely on outdated recruitment practices that fail to align with the strategic demands of the future. 

Modernizing board recruitment is not just about filling seats – it’s about building a leadership team that brings the right mix of skills, perspectives, and energy to govern effectively. Here’s a blueprint to help credit unions rethink how they recruit, engage, and support board members in a way that drives long-term success. 

Common Pitfalls in Board Recruitment 

Despite their strong community roots, credit unions often fall into predictable traps when filling board positions: 

• Informal recruitment through internal networks or long-time volunteers
• Seat-filling based on availability rather than aligning with strategic goals
• Outdated expectations that overlook the time constraints and career demands of modern professionals
• Reactive recruitment triggered only when a director steps down, with no active succession planning
• Underwhelming value proposition that doesn’t appeal to skilled or younger candidates
• Passive onboarding, expecting new members to observe quietly instead of empowering them to contribute meaningfully.  

A Better Approach: Strategic Recruitment 

Recruiting directors should be approached with the same rigor as hiring executives. Consider the following steps: 

1. Define the Ideal Candidate Profile 

Start with a board skills matrix. Identify gaps in areas like digital transformation, financial oversight, cybersecurity, risk management or community engagement. Include diversity of thought, background, and experience to reflect your evolving membership and growth goals. 

2. Formalize the Process 

Create a clear and standardized recruitment process: 

• Defined position descriptions and expectations 
• Evaluation criteria aligned with board needs 
• Structured interview and selection processes 

Without this structure, successful recruitment becomes a matter of chance. 

3. Establish Active Oversight 

Create a Governance or Board Recruitment Committee to manage the pipeline and ensure alignment. Make recruitment a shared responsibility, with all board members and executives keeping an eye out for strong potential candidates who meet your defined needs. 

4. Expand Your Search Channels 

Move beyond internal referrals. Consider outreach through: 

• SEG employers, community business leaders, and chambers of commerce 
• Alumni networks, colleges, and professional associations 
• Diverse leadership organizations such as AACUC, Women in Leadership, or Latino CU Professionals 
• Recruiting platforms like LinkedIn, NACD, or VolunteerMatch 
• Board matchmaking platforms like BoardSource, OnBoard Match, and TheBoardList 
• Executive search firms for specialized needs (e.g., fintech, regulatory, ESG) 
• AI tools to enhance targeting and reach, such as HireEZ, SeekOut, Eightfold.ai for passive candidate sourcing 
• ZoomInfo, Apollo.io for executive profile research 
• Crystal Knows, HireVue, Pymetrics for leadership and cultural fit assessments 
• Diligent, BoardEx for AI-driven board databases and network mapping 

5. Build a Continuous Pipeline 

Board recruitment should be a proactive and ongoing effort—not a reaction to vacancies. Maintain a pool of pre-vetted, mission-aligned candidates who align with your strategic priorities and governance needs. Leverage your Associate Board and Supervisory or Audit Committee as developmental pathways for future directors, providing candidates with hands-on experience and visibility into board responsibilities. 

At the same time, continue to cultivate external talent from your community, SEGs, and professional networks to ensure a diverse and ready pipeline for both planned succession and unforeseen transitions. 

6. Add Flexibility to Your Governance Structure 

Consider bylaw revisions to allow a range of board seats or establish an Associate Board Member program. These structures allow you to bring high-potential candidates into the fold before formal seats become available—building continuity and capacity. 

7. Strengthen Onboarding and Early Engagement 

Give new directors a robust onboarding experience, including: 

• Welcome meetings with leadership 
• Access to strategic materials in digestible formats 
• Mentorship from seasoned directors 
• In-depth technical sessions with management 
• Encouragement to contribute early, not just observe  

Consider Board Compensation 

While most credit unions operate with volunteer boards, compensation is permitted under certain conditions and can be a valuable tool for attracting and retaining top talent—particularly for larger or more complex institutions. 

Federal Credit Unions (FCUs): NCUA regulations prohibit FCUs from compensating board members, except for reimbursement of reasonable expenses. However, some forms of incidental benefits (e.g., conference travel, insurance coverage) are permissible. 

State-Chartered Credit Unions: Compensation rules vary by state. Many states allow state-chartered credit unions to provide stipends or honorariums to noard members, subject to regulatory guidelines and disclosure requirements. 

Types of Compensation to Consider: 

• Modest stipends or per-meeting fees 
• Annual honorariums 
• Reimbursement of travel, training, or childcare costs 
• Coverage for professional liability or insurance 
• Paid attendance at industry conferences or training programs 

Before implementing compensation, credit unions should: 

• Review state regulations and consult legal counsel 
• Document the rationale in board minutes 
• Update bylaws and governance policies accordingly  

Adding Value Without Pay 

Even if monetary compensation isn’t feasible, credit unions can offer substantial non-financial value: 

• Purpose: A chance to give back and strengthen the community 
• Prestige: Board service adds credibility and visibility 
• Development: Access to conferences, certifications, and education 
• Career Growth: Opportunities to gain leadership experience 
• Networking: Connect with peers, leaders, and industry influencers 
• Recognition: Celebrate contributions and highlight service publicly 

These incentives resonate especially with younger professionals seeking meaning and impact in their extracurricular commitments. 

Making Board Service Work for Busy Professionals 

To attract and retain new voices, especially younger and working professionals, Boards must modernize their operations. This includes: 

• Flexible Meetings: Use hybrid formats, reduce frequency, vary times beyond traditional weekday mornings 
• Reduce Meeting Burden: Streamline the board calendar by reducing the number of full board meetings and empowering well-structured committees to handle detailed work, with clear reporting back to the board. 
• Efficient Use of Time: Keep agendas focused and time-boxed, avoiding meetings held purely by tradition 
• Modern Tools: Leverage board portals, digital packets, and video-based onboarding 
• On-Ramps: Use advisory councils, committees, and 1-year associate terms to ease transitions 
• Strategic Discussions: Prioritize forward-looking, mission-aligned conversations over administrative reviews 

The Strategic Payoff 

A high-functioning, forward-thinking board is a strategic asset. It strengthens governance, supports executive leadership, and positions the credit union for sustained growth. But reaching that level requires intention. 

By formalizing recruitment, diversifying the candidate pool, and delivering real value to directors, credit unions can ensure their Boards are equipped to navigate today’s complexities—and tomorrow’s opportunities. 

The future of credit union governance doesn’t start at the next Board meeting – it starts with who’s sitting at the table. Now is the time to rethink how we recruit, engage, and empower those leaders. 

Tony Ferris is CEO of Rochdale, which is a sponsor of the CU Board Brief. For info: www.rochdaleparagon.com