As credit unions nationwide grapple with meeting the NCUA’s new rule on succession planning, succession planning data from Quantum Governance, L3C, provides an understanding of what is needed to meet today’s governance challenges.
In the firm’s State of Credit Union Governance report, Quantum Governance asked two central questions:
- What are the skills that add the most value in the boardroom?
- What are the highest priorities when recruiting new board members?
The results are surprising.
WHAT BOARD MEMBERS VALUE IN THE BOARDROOM VS. WHAT IS PRIORITIZED IN RECRUITMENT
FOR STATE OF CREDIT UNION GOVERNANCE RESPONDENTS
SOURCE: Quantum Governance, L3C
Although Ability to focus on the future (prioritization 51% and value 76%) and Financial literacy (prioritization 50% and value 45%) fell in the top three responses for both questions, there was little alignment beyond this.
Most respondents prioritized Demographic diversity (53%) over Ability to focus on the future (51%). Hard skills like Financial literacy (50%), Specific operational expertise (48%) and Professional services expertise (43%) rounded out the top five responses.
But on the question of what skills add the most value, the respondents told a different story. Only one of the top five responses — Financial literacy (45%) — was related to hard skills; the remaining skills were human skills like Ability to focus on the future (76%), Independent mindedness (66%), Understands the membership (44%) and Consensus building (38%).
Strategic Insights
- Credit unions are not aligning their recruitment efforts with what they value most in the boardroom, but they should.
- The most valued skill in the boardroom is Ability to focus on the future — or directors with a strategic mindset.
- There is a shift away from valuing hard skills in the boardroom to valuing human skills.
- Financial literacy is the most valued hard skill in the boardroom.
- Although credit unions prioritize Demographic diversity most in terms of recruitment efforts, significantly fewer respondents actually value it.