The role of the board of directors is to set the strategic direction of the organization. So, it would make sense that one of the most important competencies needed by all board members is the ability to think strategically.
What is the board’s responsibility in the area of strategy? The following list will help you understand the role the board should play in creating the vision and the strategy for the organization.
- Develop a clear vision for the future of the organization. Vision is a picture of the future that provides clarity and direction. It is essential for the board to develop a vision and work with the CEO to ensure a mutual understanding of the vision. The CEO should then take that vision and work with his/her management team to develop strategies around that vision.
- Create and communicate a clear sense of the organization’s purpose and mission. Clearly communicating the organization’s mission, vision, and purpose and then energizing people behind that vision and direction is critical to the success of the organization. The board should review the organization’s mission, vision, and value statements on an annual basis to ensure that they are always in alignment with the direction of the organization.
- Maintain a long-term, big-picture view of the organization and identify the long-term, future needs and opportunities for the organization. The board is not there to determine which employee should run the new department, how much employees should be paid, or how to fix a complaint from a customer. But rather, the board should be concerned with things such as: merger strategy, the strategic steps it will take to maintain the financial viability of the organization, etc.
- Recognize when it is time to shift the strategic direction of the organization due to changes in the economy or regulations governing the organization. You, as a board need to have an in-depth understanding of the trends and developments in the credit union industry, so that you can create a vision for the future of the credit union. You can get this information from a variety of sources such as: trade journals or other trade publications, conferences and seminars, subject or industry experts, and/or your CEO.
- Challenge status-quo thinking and assumptions. If your credit union seems to be running on autopilot or doesn’t seem to be growing and advancing, it is your responsibility as the board to step up and create a vision and strategy that will move your organization ahead. It is ok to challenge or question the CEO’s ideas and direction if you don’t feel completely comfortable with them. An open, honest discussion in a respectful environment between board members and between the board and the CEO is critical to creating a strategic vision and direction for the credit union that will lead to continued financial viability and success.
Because strategic thinking is a critical competency needed by all board members, it is important to evaluate whether all of your board members have this skill. If not, it is crucial that the board receive some training in this critical area. It is also imperative to remember to look for this critical competency when you are recruiting new board members.