Benjamin Franklin once noted, “An investment in knowledge pays the best interest.”

Yet, too many board meetings focus more on interest rates and other operational issues than on addressing strategic issues, anticipating future member needs, and embracing continuous learning.

Boards often fail to receive proper training and education around their true roles as strategic leaders of their credit unions, says Tom Sakash, CUNA’s manager of small credit union initiatives.

“The most important job of a credit union board is to set the strategic direction for the organization at the highest level,” he says. “Too many boards spend the majority of their time in the weeds and on the day-to-day operations of the credit union.”

Board members don’t typically come from financial backgrounds, Sakash says, so it’s more difficult for them to understand the context of the financial services industry.

“Understanding the options current and potential members have with other financial services providers is becoming more difficult,” he says. “Knowing your competition is crucial for boards so they can make the appropriate strategic choices.”

Meeting training requirements

At a minimum, directors need training about board roles and responsibilities, financial management and analysis, and risk management, says Alison Carr, consultant at Your Credit Union Partner.

“The biggest issue we see in our work with credit unions is the lack of development plans at the board level,” she says. “Boards need to have a development plan that outlines mandatory training topics. Then they need to budget for that training and have annual assessments and accountability for completing the training.”

Many credit unions include training and educational requirements in board policies or director job descriptions.

At Community Credit Union in Lewiston, Maine, all board members are required to attend yearly Bank Secrecy Act (BSA) and red flag training that covers identity theft, fraud, and information security.

“New directors are required to attend an orientation, which includes training on our financial statements, the credit union difference, and other timely topics,” says Jennifer Hogan, CEO at the $99 million asset credit union.

According to NCUA, directors should have at least a working familiarity with basic finance and accounting practices. This includes the ability to read and understand balance sheets and income statements, “and to ask, as appropriate, substantive questions of management and the internal and external auditors.”

This should occur at the time of election or appointment, or within a reasonable time to not exceed six months, the agency reports.

In addition to BSA training, Harvester Financial Credit Union in Indianapolis holds educational sessions during board meetings about topics such as the current expected credit losses standard. Board members are closely tied to the credit union’s more than 5,000 members, staying in touch with their needs and concerns, says Jason Ford, president/CEO at the $71 million asset credit union.

Reaching out to others in the movement also enables board members to not only learn new information, but also collaborate, share, and support others.

Caitlin Brama, CEO at $17 million asset Farm Credit Employees Federal Credit Union in St. Paul, Minn., invites the Minnesota Credit Union Network’s (MCUN) compliance specialist to provide BSA and risk management training. Hogan also turns to her network.

“I’ve asked other credit unions to Zoom into board meetings and share their expertise or experience in different areas,” she says. “This was a successful strategy we used this past year for strategic planning. We discussed contact centers, cannabis banking, interactive teller machines, and more. I invited credit unions from across the country to share their stories and engage in a question-and-answer session with the board.”

At Community, Hogan and the board chair are responsible for ensuring board members meet training requirements. At the end of each year, the credit union sets a board meeting calendar for the upcoming year that includes training for specific months.

Board members also are encouraged to attend an additional educational opportunity outside of board meetings.

“The required sessions are held during regularly scheduled board meetings, so it’s not something extra they have to do. We try to incorporate as many of the training requirements into board meetings as possible,” Hogan says. “I track this and follow up with board members who may have missed a training to schedule one-on-one time with them. Attendance is tracked in the board minutes.”

Hogan notes that training is more effective when the materials are shared in advance of the board meeting.

“There’s an expectation—that the directors set themselves—that everyone reviews the materials in advance and comes with at least one question for discussion,” she says. “We also review the materials at the meeting, but spend most of our time with their discussion questions. This typically leads to great conversation and a better understanding of the topic.”

Clearly communicating the timelines of requirements and gaining commitment is crucial, says Brama.

“Planning ahead of time and discussing the deadlines as a group helps tremendously,” she says. “It allows everyone to be on the same page, and leaves little room for miscommunication.”

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