By Peter Gillotte
Most credit union boards weren’t assembled by a headhunter. Members elected them, and it shows. A typical board might include a retired teacher, a small business owner, a nurse, and someone who has served so long nobody remembers who recruited them. That isn’t a flaw. It’s the point. A board drawn from the membership asks whether a new fee is fair to the people who can least afford it, not just whether it pencils out.
Here’s the catch. The director’s job has grown a great deal since most directors first raised their hands. Boards now oversee credit risk and cybersecurity, interpret ALM reports, weigh digital banking contracts, watch talent and succession, and hold management accountable on compliance rules that change faster than the bylaws. No director walks in knowing all of that, and none should have to. The board, as a body, still does.
Breadth: Covering the Bases
Breadth is the map. Does someone at the table understand how lending decisions become credit risk? Can anyone read an IT risk assessment without quietly hoping someone else speaks first? Does the board understand the market the credit union competes in and the community it serves? Does it look and think enough like its membership to notice when a product misses the mark for part of it? That last one isn’t a political question. It’s a cooperative one.
Some of this isn’t optional. Federal credit union directors must develop a working familiarity with basic finance and accounting within six months of taking office. That means enough to read the financial statements and ask management and auditors real questions. Examiners also expect genuine oversight of risk, compliance, audit, and lending. “We trust our CEO” is a lovely sentiment and a poor control.
Depth: Enough, But Not Too Much
Depth can go wrong in both directions. With too little, the board isn’t overseeing anything. It’s ratifying. When something goes sideways, the minutes will show a unanimous vote, which comforts no one.
Picture a core conversion presented as a forty-page vendor summary and a recommendation. If nobody at the table can ask what happens to member data during the cutover, or what the exit terms look like, the board has approved a decision it didn’t really make.
Too much is subtler. A director with deep accounting or IT experience is invaluable, right up until they start doing management’s job. And when one director’s expertise becomes the board’s only expertise, the rest of the table defers. A board of seven quietly becomes a board of one. The goal is enough depth to challenge, not so much that governance and management blur together.
Have a Plan
None of this matters without a plan, and the plan doesn’t need to be elaborate. Start with an honest self-assessment. Map what the board knows against what it needs to know, and note both the gaps and the overlap. A simple grid works. List the areas of oversight down one side and the directors across the top, and have each director rate their comfort in each area. The pattern that emerges usually starts the right conversation faster than a discussion would. Five directors fluent in marketing and none in technology is a pattern worth noticing.
Then get an outside view. Boards are no better than the rest of us at grading their own homework. Someone who works with many boards will spot blind spots that feel normal from the inside.
The plan itself might include targeted training, recruiting for specific skills when seats open, and succession planning that anticipates what knowledge walks out the door. It might also use advisory roles to bring in expertise without a full board seat. Training works best when it’s specific. A director who has never had CAMELS ratings explained needs something different from a director who needs a BSA refresher. The path matters less than having one, written down and revisited every year.
Questions For Your Next Meeting
- Which areas of oversight would we struggle to discuss without management in the room?
- Where do we rely on a single director’s expertise?
- When did we last assess our skills as a board, and did anyone outside the board weigh in?
- If our two longest-serving directors retired this year, what would we lose?
- Does our board reflect the members we serve today, or the ones we served twenty years ago?
A credit union board will never know everything, and it doesn’t need to. It needs to know what it knows, what it doesn’t, and what it plans to do about it. That’s the job members elected it to do, and the whole table shares it.
Peter Gillotte is a Solutions Consultant with Rochdale.
