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Analysis by: |
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George Hofheimer, Vice President |
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Credit Union Executives Society |
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December 2004 |
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The current mission statement, which primarily
calls for service to low income people, is often in conflict with some of
the programs and practices of Alternatives FCU. The programs and practices
which stress making money from fees, interest, income, etc. do not always
best serve the needs of the low income people. |
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Our mission is the lifeblood of our
organization. It’s why I am proud to be a board member. We’ve never
distinguished “mission” and “vision” as far as I know. |
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We have recently taken steps to include the
mission statement on all board minutes to keep it before us at all times.
Because we are a CDFI, we feel a strong identity with the mission and
vision. |
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If we have a vision statement, I don’t know what
it is. It clearly does not have the same emphasis/prominence of our mission
statement. |
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We should be more explicit. Before every
vote/decision, we should ask out loud, “Is this consistent with our
mission?” |
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I think systematic member surveys, every 2-3
years, would help the board understand members needs and interests better. |
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We are at a crossroads in terms of how we expand
from here. Looking forward to working with AKWESASNE. |
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We conducted a five-year strategic planning
retreat. We have adopted yearly goals to meet the strategic retreat and
have institutes twice yearly to review the goals. |
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I think the board needs to be more strategic and
not depend on the CEO for strategy. |
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(#2.6) This may not need to be annual! |
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Key indicators of success for our objectives may
be difficult to distill into convenient measures, but it seems appropriate
to have even if they have to be guidelines. |
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The board is not given enough information about
the budget implications of program changes, making decision-making
difficult. |
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The continuing losses from the new building are
beginning to be troublesome. Our membership is growing so we need to expand
walls even more. |
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The board does not have an asset liability
committee. We do have a budget committee which reviews the budget monthly
along with other issues, and the loan committee reviews pricing. All final
decisions are made at the monthly board meeting. We need to get more timely
budget figures, but this has improved. |
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The board needs to be stronger with setting
goals. It needs to work on #3.3 especially. |
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We do march to a different drummer in some
respects, which causes us to take different risks than some regulators or
traditional lenders are uncomfortable with. |
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Staff does a great job in developing new loan
products. |
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Our managers are excellent at
presenting/researching new products and services. |
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I think the board gets painted a rosy picture,
not a realistic one. |
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I’m not sure how systematic our evaluation of
services are. We do learn of problems at new programs as they occur. But I
do not know if we, as a board, get regular, systematic evaluations of all
services. |
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Our cu - I’m not sure whether rightly or wrongly
at this point - suffers from a widely held opinion that we make “mistakes”
- a lot - more than other local financial institutions. This can be a
touchy topic, understandably, but I’m not aware of “us” addressing this
issue head-on and systematically - and evaluating efforts. Again, I think
ongoing, systematic member surveys would help. |
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Yeah, Hillary! |
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We have had discussions regarding the role of
the board in deciding the kind of issues we will comment on – issues which
impact our mission. |
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Our management maintains extremely open ties
with the membership. The board does not have to work to ensure open
dialogue. |
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The
board understands that our CEO is official spokesperson, sometimes COO. The
board is rarely called upon to act in this capacity. |
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I feel we have good relations with staff
members. |
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We recently conducted a six month review of
staff/board interaction and developed a policy on communication and areas
of responsibility. |
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6.11 & 6.12 – We have never had to conduct a
search for CEO until “now” – emergency succession plan is in place. |
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Staff, rather than board, tend to run meetings. |
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Often Board membership doesn’t seem to serve any
real purpose. |
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There is a lot of respect/trust between the CEO
and the board, however, the CEO has a lot of power of knowledge that seems
to significantly tip the balance of power to the relationship. |
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I worry that the board acts as a rubber stamp
for the CEO too often. Succession is a big, looming, overriding issue. |
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There has been only one CEO – who recently gave
the board five years notice of his resignation. We have established a
succession committee and are developing a process and procedure. |
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We are now embarking on our first search for a
new CEO. Ever! |
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Difficult to recruit new board members;
especially minority candidates. |
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Hard to find board members with skill, who will
work for free. For #7.4 – no plan here. |
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Recruiting new potential board members is a huge
challenge. Not strongly emphasized as many remain on board for several
years. |
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Since the agenda becomes the minutes, it is very
structured and organized. The disadvantage is that it is difficult to
introduce new topics. |
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We recently established a governance committee
to renew board policy and to insure board training. |
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#8.6 – Gray area that is probably adequately
covered by regulations compliance. |
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Board members often attend without first
reviewing the agenda. Governance has been weak, with an emphasis on this
only recently. |
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Agendas come just one or two days before a
meeting which doesn’t seem sufficient. |
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I feel that I have not done enough as chair of
the public relations committee, but I’m not sure how to improve. |
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The committees I serve on are largely staff run.
The development committee doesn’t do anything really. We receive updates
about grant progress, basically a report, which is well done. It seems that
we (board members) provide some “community” for the development director,
whose work is somewhat isolated, perhaps. Perhaps we’re (the board members)
not in a position to contribute significantly to this committee. The
personnel committee has a clear focus/and work plan. |
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I’ve had enough with risks since Y2K. I think
that prepared us for just about anything. |
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I believe the insurance review happens as part
of the yearly or semi-yearly examination. The board does not conduct or
review that I am aware of. |
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#9.4 – Talked about, may not be reduced to
writing – I expect people have conflicts. If they don’t, they are not doing
anything! |
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That’s what this survey is all about, no? |
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Have not really done this. |
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This is first board self assessment in my 6-year
tenure. |
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I’m glad we did this assessment and hope that we
will continue to do this. |
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1) Planning for the retirement of the current
CEO by recruiting new CEO |
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2)
Ensuring the profitability of core operations |
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1) Expansion into new geographic areas |
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2)
Expanding our services (including more low-income people as members) |
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3)
Profitability |
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4)
Greening |
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1) Succession planning for the CEO and
retirement |
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2)
Return to profitability and maintain strong programs |
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3)
Stay focused on the five-year plan |
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Succession plan |
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1) CEO succession |
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2)
Return to profitability after building program |
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3)
Keeping focused on being Alternative |
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1) Possible legislation to tax profits of credit
union’s |
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2)
CEO succession and transition |
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3)
Micromanagement of CEO in staff affairs |
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Our founder and CEO will be leaving in June
2007. Creating a comprehensive succession plan is our highest priority. |
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1) What does growth look like? |
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2)
How does growth fit with our mission? |
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1) Regaining profitability |
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2)
Planning for a planned CEO turnover |
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1) The board can work toward developing new
leadership among board members – rotating committee chairs and board
officers |
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2)
Board can create its own agenda for cu performance |
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1) Use results of survey |
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2)
Have more proactive board which has enough information to digest the big
picture |
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3)
Stop rubberstamping |
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1) Strengthen board education and understanding
of the financials |
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2)
Strengthen board’s ability to keep shape the long term health and vision of
AFCU. |
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Put agenda in the hands of the board, not in the
hands of the CEO. |
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Intensive, all day workshop on what works and
what doesn’t work at cu. |
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All board members must commit to ensure the
strength needed to see the organization through this transition. This
self-assessment is one tool we’ve adopted. An ongoing process for
assessment is an important component. |
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Because of our planned CEO transition, I think
the board needs to be more active and accessible. Currently, we rely a bit
on long-time CEO as a leader and visionary. I think the current CEO was
“leading” the board and it seems to work okay because of long term
relationships and trust over CEO’s competence and vision. The board needs
to be more assertive with a new CEO coming into the organization. To ensure
the safety of the CU. |
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It’s a great group of people that I have really
enjoyed working with. I’ve learned so much that I’ve been able to apply in
other areas. |
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Many of our board members run hot and cold.
They’re “there” and active for a period, then drift off. We need greater
consistency and also need a greater emphasis on strategic planning. |
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This is the strongest, most involved and
educated board I have served on. Members of the board come from diverse
backgrounds, yet all are dedicated to helping AFCU succeed and meet the
needs of low income residents of Tompkins County. |
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CUES has accumulated approximately 300 data
points from credit unions who participated in the board self-assessment
exercise. The table on the next two slides provides a comparison of your
credit union’s average scores versus the cumulative average scores of all
credit unions in each responsibility area. While it is very difficult to
draw any concrete conclusions from such data, CUES feels the comparative
data are qualitatively valuable for your credit union to consider. |
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Notes
