“There is a transition happening within the industry both internally with executive staff, and externally with volunteers,” Mitchell said. “The volunteer role has evolved and a more disciplined approach to developing and recruiting board members will be needed.”

Mitchell said she was recently asked to serve as chair of the nominating committee for several credit unions to facilitate the transition and she is working with several clients to create a formalized recruiting program for volunteers through a training program.

“The level of expertise needed for credit union volunteers is consistent the world we live in today which is demanding, dynamic and 24/7,” Mitchell suggested. “Board members will need to be motivated by making a difference and CEOs need to make their development and engagement a top priority, a passion. Respectful preparation will also go a long way with the regulators and auditors.”

Brad Houle, president/CEO of the $115 million C.A.H.P. Credit Union in Sacramento, Calif., recommended that board of directors and supervisory committee members serve the credit union by challenging management to run the organization more effectively.

“In order for credit union volunteers to accomplish this goal, all interested parties must agree that communication between the board, supervisory committee, and senior management is an ongoing, multi-level process that involves varying opinions and emotional human responses to challenging situations,” Houle said.

The most successful technique C.A.H.P. CU has used to evaluate board and supervisory interaction is the ABC process or achievement, belonging and contribution, Houle noted.

“Everyone involved in the decision making process should feel a strong sense of achievement, belonging, and contribution to help reinforce their charge as a volunteer or employee of the credit union,” he added.

The ABC process creates opportunities for personal growth and development for volunteers to cultivate positive change that capitalizes on individual and organizational strengths through a sense of collaboration, innovation and a sense of urgency, Houle said.

When the board and supervisory committee are motivated and passionate about their credit union, they help develop a culture of trust, accountability, and success that helps credit union staff to overcome challenges,” Houle said. “In my opinion, this is the heart of board governance.”

When a board of directors wants to determine how effectively management is running the credit union, they should ask questions that will make management evaluate current strategies and initiatives, Houle suggested.

Sample questions that may help management challenge the status quo include listing the five worst and most successful initiatives during the last five years, according to Houle. A credit union can also look at what steps it has taken to improve strategic planning throughout the organization.

This approach to board governance encourages everyone to question the status quo, challenge what they are doing and why, deepen the understanding of differing opinions and perspectives, strengthen team dynamics, and promote a culture of innovation.

“These practices may help your credit union achieve more effective communication between board, supervisory and management as it did for our credit union,” Houle said.

Now that the new American Institute of Certified Public Accountants’ Audit Standards Board is in effect, advocates say credit unions will benefit from the new clarity standards. The roles of the auditor, audit committee, and management are different and distinct. Those differences are now more evident in the areas of client acceptance and continuance, annual engagement letter communication, and acknowledgement of key audit preconditions through the ASB guidelines.

Meanwhile, a good deal of interaction between boards and CEOs may be flawed due to a range of issues such as lack of communication and unqualified board members.

Harvey Johnson, senior manager of PBMares LLP, a regional accounting and consulting firm in Newport News, Va., sees problems with communication between boards and CEOs, especially for credit unions with less than $300 million in assets.

“I think the level of talent that sits on the board of many credit unions is a big industry issue,” Johnson said. “The average board member has no background in finance. I see this as big problem.”

Board members should be chosen by their ability to understand finance and other strategic issues, Johnson offered.

“There needs to be a requirement put into place that the board members have some sort of financial literacy prerequisite is met when finding new board members,” he said. “CEOs need to incorporate board development or educational activities into meetings. These are a few ways to keep your board focused on governance.”

Johnson also recommended that CEOs acquire the AICPA Audit Tool Kit because it allows CEOs to evaluate board members.

“It will help you evaluate how strong the board is and who has to go,” Johnson said. “If you don’t wake up and evaluate your weaknesses, you’re going to have big problems.”