Learn the numbers so well that you can spend less time with them
Credit union board members have to have a very good handle on the organization’s financials. This is often so time consuming that it takes away from valuable time that could be spent on important strategic initiatives/goals. Learning the numbers well enough to get past this is a valuable place that many take years to reach … while others may never get there at all. This holds the credit union back.
We in the credit union industry do love our ratios, don’t we? It’s a way to make better sense of raw numbers and an attempt to get closer to an “apples to apples” comparison that is of value for strategic or oversight purposes. Now we need to learn and know this stuff well enough that we can spend dramatically less time with it. Sounds a bit contradictory, right?
Problem: What we’ve seen across the country is that new, and relatively new, directors don’t have a reasonable handle on the ratios and financials for a significant amount of time. We measure that in years often, not weeks or even months. (The dirty little secret is that there are also long serving directors who don’t know this stuff well enough.) I remember way back when I joined the CU movement at CUNA, learning them myself. It took some time for this English major. I don’t hold this against the volunteers, but it has very real ramifications for many credit unions.
Context: Too often, board meetings are spending valuable time on reviewing the financials. This is a problem for a variety of reasons. For one, this is backwards-facing information. The financials are looking in the rear-view mirror and asking “how did we do?” This is necessary and is, of course, part of the fiduciary duty of the directors to keep track of. But what I see and hear is that this is requiring CEOs, CFOs and others to spend inordinate amounts of time reviewing these numbers, explaining them, teaching about them … mostly during the board meetings.