Winninger added, “If I were a director of a credit union, I would be even more concerned with regulators because I think we've seen them act very decisively with respect to corporate. If your credit union runs up against a problem, the day is going to come when they are going to come after directors. I think it's going to happen.”

Meanwhile, are members tuned in to all the changes? Winninger suggested if things are going well, members don't think of themselves as owners but as customers. But if things start going south, they start responding as owners and get involved. He acknowledged that most of the credit unions he works with are trying to improve. Over time, as a credit union grows, the board needs to shift its focus and they may require help doing that. Winninger said the board has the two key jobs of setting policies and hiring a CEO who makes those policies happen.

“We've heard many stories about hiring and firing decisions that seem capricious. A good governance system assures that the right targets and boundaries are articulated and the CEO is held accountable,” Winninger said. “A CEO should also get credit for the good things that happen.”

Winninger said although some boards have not changed with the times, many others are becoming more sophisticated. Another observation is not many young people are serving as volunteers. Indeed, too many directors, he stated, look like him – a white male with gray hair. The board makeup may continue to look that way unless young people and others are asked to join, he added.

“Under old style governance, the board was concerned with superficial things such as the color of the bricks or approving things after the fact. I guess it was very much what people expected when they signed up for the board,” said Ron Carlson chairman of the $500 million Community Financial Credit Union in Plymouth, Mich., who has been on the board for 30 years.

Today, there's certainly an attempt by the regulatory agencies to make sure board members have basic fiduciary knowledge.

“Boards have come to realize they're providing the direction for the credit union. This is where we want to go and it's the CEO's job to get us there,” Carlson said.

Next Page: Dealing With Regs

One thing boards struggle with is complying with a constant flood of new regulations, Carlson noticed. He said CFCU, which recently changed from a federal to a state charter, has established a fulltime position to track regulatory issues. If there's a problem, there's a potential for someone to say, “Well, the board told me to do it this way,” Carlson said. There's also a constant struggle to make a credit union relevant to younger members who want mobile banking, apps and other innovations.

Meanwhile, board members are encouraged to take part in available education opportunities. One of CFCU's vice presidents prepared an online tutorial on fiduciary and regulatory issues that is probably more helpful than other canned packages because on numbers and issues specific to the credit union, Carlson offered.

Regulations and open FOMs are on the minds of the directors at the $1.65 billion Washington State Employees Credit Union in Olympia, according to Ritz Koontz, the cooperative's chairman. So far, regulations have not been interpreted well, Koontz said, but the credit union and board are still held accountable to do the right thing. The board just voted to have an open FOM prompted by the state's government employment rosters decline and shrinking agency budgets. The credit union now uses the moniker WSECU. With a large portion of new members coming from the families of state employees, the credit union had already been drifting into an open FOM and as a result, the board wanted managed growth.

“One thing that has not changed is that we want to stay abreast of current issues and feel we are keeping up with the times,” said Koontz, who has been a WSECU member for 40 years and has served on the board for six years.Technology has moved to the fore. For many years, the main way WSECU met its members was most likely at the branch.

“Giving our members the technology they want is one of the more interesting, challenging things we're looking at,” Koontz said.

One indication of just how complex board decisions have become is the topics that boards thought might require 10 minutes of discussion ends up eating 45 minutes of meeting time, Koontz said. Still, she underscores the importance of asking staff to bring issues to the board at the early stages. There are two WSECU retreats a year where the board digs more deeply into credit union concerns, Koontz said. For instance, expanding beyond a FOM that historically focused on state employees, was a big issue, she recalled.

Technology is also one of the main focuses at the $106 million Dane County Credit Union in Madison, Wis. Chairman Joe Guastella has been on the board for 13 years.

“We're looking at technology trends – mobile banking, bill pay, remote deposit. How can we attract new members? What are they looking for? How much of our resources do we want to allocate,” Guastella said. “We kind of want to wait and see where others are going,”

Guastella emphasized he's been blessed with what he considers a great board. Members have different backgrounds and listen to each other. Those diverse backgrounds means they may offer ideas the others hadn't even considered, he said.