Policy Governance® Simplified
for Credit Unions
Policy Governance has been
adopted by a sizeable number of credit unions, both large and small across the
United States. Interest in the model continues to grow as more volunteers
and executives are exposed to it. One of the struggles is to understand
the model within the context of credit unions. There are nuances that
apply to credit unions or definitional shifts that need to be understood.
Most of these revolve around the role of members as both owners and customers.
Within the framework of
Policy Governance, most boards have not aligned themselves with members as
owners. Policy Governance defines the role of members-as-owners and the
relationship between them on the board. This refocusing or redefinition
can provide a regeneration of the energy that originally created the credit
This web page is an attempt to provide a simple way to
describe Policy Governance for Credit Unions. This is not meant to be a full description or
a glossary of terms, and for many, especially those new to Policy Governance,
it will be too short. However, a definition of terms can be found at the
Policy Governance Annotated Glossary.
Policy Governance® Theory:
- Organizations should exist to meet an
End or Ends.
- Ends and
Means are different and should be treated differently.
- Board Means and Staff Means are different and should be treated
Delegation is best done by identifying what to avoid rather than
identifying what to do.
Accountability is assured through monitoring.
The Policy Governance® Model:
- Boards are the link
between the owners and the organization.
- As the representatives of the
owners, boards define the Ends.
- Boards maintain the separation between Ends and Means, and Board Means and
Staff Means by establishing four types of written policies: Ends, Governance
Process, Board-Executive Relationship, and Executive Limitations.
- Boards speak with one voice as represented in their written documents.
Specific Implications for Credit Unions
- A Board's primary
responsibility to members is to treat them as owners rather than customers.
This is a dramatic shift for credit unions. Most credit unions treat
members almost exclusively as customers.
- Boards will have to create
opportunities for members to act as and speak as owners. This too is a
shift for credit unions, and although they typically have annual
membership meetings, these rarely have little to do with connecting to owners
other than electing volunteers.
- Rather than defining the
mission or vision of the credit union, boards define the Ends through the
input of members acting as owners. Ends are the difference that the
credit union is charged to make in the members or the field of member's lives.
Lynn A. Walker, Ph.D.
Copyright © 2003 Boundary Management Consulting
All rights reserved.