The NAFCU Journal March - April 2018 - 30

like three pieces. The 2007 market
collapse "made the role of compliance
integral into a lot of aspects of the
daily operations," says Stewart. "It
became more fundamental because it's
expensive if you're thinking about it as
an afterthought."

Myers suggests a thoughtful and intentional approach to "having a human capital strategy in the boardroom, similar to
an organizational human capital strategy.
For example, both boards and organizations need to attract, retain, develop and
advocate for their people."

Board policies direct the credit union's
compliance areas and practices, says
Hiway Federal Credit Union President/
CEO Dave Boden. The process starts
with "understanding what's going on in
the compliance arena."

Hiway is "underway on that transition,"
discussing the need and approaches for
attracting specific skills and diversity
of thought, whether to the board table
or to nonvoting advisory committees,
says Boden. Meanwhile, continuing
education in technology and other
specialized skills helps build a baseline of
understanding that equips the full board
with the competency to address highly
technical issues.

"That's management providing information up to the board - what's new,
what's changing," he says. "It's also
important for the board to get outside
training so they're not solely reliant on
the management team."
Boards must also "be participatory
in audits and exams," he says. "The
supervisory committee probably
handles getting it done, but the board
is the one to be reported to and see if
the organization has compliance issues
to address."
The board is responsible for setting
"the tone for the open acceptance
of compliance, and it is senior
management's responsibility to create
the culture of compliance within
the organization, so that everyone
knows they have a role to play and a
responsibility in complying with the
rules under all of these programs,"
says English. "If you don't have those
things, your institution is going to
struggle because you won't have
absolute compliance."

STRATEGY REBOOT

In this complex regulatory environment, board members are being asked to
tackle - or at least comprehend - highly
technical issues in finance and cybersecurity. Boards should start the process at
recruitment, asking, in Stewart's words,
"What skill sets do we have on the board,
and what skill sets do we need on the
board? They need to have a strategic plan
and make sure they have a well-balanced
board to execute on that strategic plan."
30

Still, it doesn't pay to "put round pegs in
square holes," says Keneipp. His board is
rich in members with financial backgrounds - "Throwing spreadsheets on
our board table is like throwing red meat
to a pride of lions," he says - and doesn't
expect someone recruited for marketing
savvy to become an expert in accounting. When the topic gets dense, board
members ask questions that help them
"make knowledgeable decisions about
what needs to be done."
In November 2015, Federal Financial Institutions Examination Council (FFIEC) guidance indicated that
cybersecurity is a key risk falling into
the realm of oversight. Since then, basic
cybersecurity training has been "more
robust," says Bruyere.
"It's not that they have to get certified as
hackers, but the language is that board
members 'provide a credible challenge,'
which means being capable of asking
those thoughtful questions that will show
where the credit union needs to be for its
risk profile," she says.
As directors confront the training
needed to comply with widening fiduciary duties, they also face opportunities
to redirect their boards in more strategic,
forward-looking directions, says Myers.
While directors recognize their tasks of
CEO oversight and delivering member

perspective to credit union products
and services, they rarely cite the need
for "strategic thinking, critical thinking,
futuristic thinking," she says. "To me,
that's one of the gravest critical challenges of a board."
Teaching board members the value of
strategic and consequential governance,
in addition to fiduciary governance,
helps them "do a better job at oversight,"
Myers says. "Board members with a
single focus of oversight will focus
primarily on details, and it's going to be
challenging to see the big picture. Board
members who are strategic leaders and
add value of consequence are more
equipped to make sense of the details as
part of fiduciary governance."
One danger of increasing oversight and
knowledge specificity is "the possibility
of micromanagement," notes Boden. But
as noted by Tschida, his board chair, a
strategically oriented board can steer
clear of devolving into the weeds. "We
try to stay on the strategic side and not
get into detail," she says.

THE BETTER CREDIT UNION

Directors, executives and consultants
agree: Adherence to fiduciary duties and
compliance makes a credit union better.
"You can look at compliance as a
burden, or you can look at compliance
as a benefit," says Stewart. "If you are
taking good care of your members -
and part of taking good care of them
is having strong operations and good
controls in place - it's also a member service. You can use that. You can
market it."
Adherence carries multiple benefits:
More competitive: Though directors are volunteers, adopting strategic mindsets strengthens the credit
union's competitiveness with for-profit
institutions and their paid boards,
says Myers.
■■ Setting an enterprisewide tone: "If the
board is resistant to their obligations
and doing the training and staying
abreast of things, that resistance will
■■

THE NAFCU JOURNAL  MARCH-APRIL 2018



Table of Contents for the Digital Edition of The NAFCU Journal March - April 2018

Conferences
From the Chair
Your Washington Watchdog
Advocacy Snapshot
Washington and Industry Briefs
Growth Strategies
Understanding Risk and Managing It
The Board of Directors
Best-of-Class Strategies for Retaining Top Talent
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal March - April 2018 - Cover1
The NAFCU Journal March - April 2018 - Cover2
The NAFCU Journal March - April 2018 - 1
The NAFCU Journal March - April 2018 - 2
The NAFCU Journal March - April 2018 - Conferences
The NAFCU Journal March - April 2018 - From the Chair
The NAFCU Journal March - April 2018 - 5
The NAFCU Journal March - April 2018 - Advocacy Snapshot
The NAFCU Journal March - April 2018 - 7
The NAFCU Journal March - April 2018 - Washington and Industry Briefs
The NAFCU Journal March - April 2018 - 9
The NAFCU Journal March - April 2018 - 10
The NAFCU Journal March - April 2018 - 11
The NAFCU Journal March - April 2018 - 12
The NAFCU Journal March - April 2018 - 13
The NAFCU Journal March - April 2018 - 14
The NAFCU Journal March - April 2018 - 15
The NAFCU Journal March - April 2018 - 16
The NAFCU Journal March - April 2018 - 17
The NAFCU Journal March - April 2018 - 18
The NAFCU Journal March - April 2018 - 19
The NAFCU Journal March - April 2018 - Growth Strategies
The NAFCU Journal March - April 2018 - 21
The NAFCU Journal March - April 2018 - Understanding Risk and Managing It
The NAFCU Journal March - April 2018 - 23
The NAFCU Journal March - April 2018 - 24
The NAFCU Journal March - April 2018 - 25
The NAFCU Journal March - April 2018 - The Board of Directors
The NAFCU Journal March - April 2018 - 27
The NAFCU Journal March - April 2018 - 28
The NAFCU Journal March - April 2018 - 29
The NAFCU Journal March - April 2018 - 30
The NAFCU Journal March - April 2018 - 31
The NAFCU Journal March - April 2018 - 32
The NAFCU Journal March - April 2018 - 33
The NAFCU Journal March - April 2018 - Best-of-Class Strategies for Retaining Top Talent
The NAFCU Journal March - April 2018 - 35
The NAFCU Journal March - April 2018 - 36
The NAFCU Journal March - April 2018 - 37
The NAFCU Journal March - April 2018 - 38
The NAFCU Journal March - April 2018 - 39
The NAFCU Journal March - April 2018 - Executive Spotlight
The NAFCU Journal March - April 2018 - 41
The NAFCU Journal March - April 2018 - Management Insight
The NAFCU Journal March - April 2018 - 43
The NAFCU Journal March - April 2018 - Compliance Central
The NAFCU Journal March - April 2018 - 45
The NAFCU Journal March - April 2018 - Inside NAFCU Services
The NAFCU Journal March - April 2018 - 47
The NAFCU Journal March - April 2018 - From the President’s Desk
The NAFCU Journal March - April 2018 - Cover3
The NAFCU Journal March - April 2018 - Cover4
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