Director's Resource - Q4 13

League of Southeastern Credit Unions & Affiliates

Director’s Resource League of Southeastern Credit Unions

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December 2013 | Vol. 3, Issue No. 4

President’s Message For the better part of the past 18 months, we have been looking at our current and future facility needs in Birmingham and Tallahassee. We want the best working environment for our staff. But we also want to make the best use of our space.

About a week before Christmas our Tallahassee office moved across town to the newly coined “Credit Union Center.” We share the building with Corporate One FCU, CU Members Mortgage, and Member Business Solutions. An amended and extended new lease was signed in Birmingham which reduced our overall space at a more favorable rate. It includes lease holder improvements which should be completed by the end of the first quarter 2014.

In Tallahassee, our existing property is for sale. When you combine the new lease in Birmingham and the move in Tallahassee the LSCU & Affiliates is projected to save more than two million dollars over seven years once we sell our existing facility in Tallahassee. This helps our long-term sustainability as an organization, but also allows us to be able to continue to provide the level of service and products our member credit unions have come to expect from us.

We are excited to get started in 2014. I hope you have had a wonderful holiday season. Thank you for your membership with the League. I look forward to seeing you in the New Year.

Five Types of Board Members To Avoid Self-regulating is a board’s best defense against unproductive/counterproductive directors, according to Jack and Suzy Welch.

The husband-and-wife team who co-authored the business and leadership manual “Winning” based on Jack’s fourdecade tenure at General Electric—including 20 years as CEO—identified five types of counterproductive board members in a recent article for BusinessWeek.

Their advice, which applies to credit unions, as well as forprofit companies: Don’t tolerate troublesome performance by those who personify these five behaviors, and emphasize to your nominating committee the need to weed out potential directors who show signs of these traits: 1. The Idler or “Seat Warmer.” This person is more concerned with the prestige or perks of being on the board than investing any time or emotion in the direction of the company. “They rarely manage or probe.

Nor do they venture into the field to make sure what (continued on page 2)

Save the Date Credit Union Quail Hunt Jan. 24-25, 2014 Saturday - Sunday Town Creek, AL Click here for more information ACUA State GAC Feb. 4-5, 2014 Tuesday - Wednesday Montgomery, AL Click here for more information CUNA GAC Feb. 23-27, 2014 Sunday - Thursday Washington, D. C. Click here for more information

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they hear in the boardroom about values and strategy matches what employees feel,” the Welches write.

2. The White Flag. This person lives in fear of taking bold action, especially when that action may have negative repercussions. As a result of this fear, he or she may sell out on their principles “just to get out of the cross hairs.”

3. The Posse. A silent type who sides with the majority, then proceeds to work behind the scenes on a personal agenda. Solid boards often are able to nip this intrigue in the bud.

But when the executive committee IS the posse, you wind up with a “controlling, secretive, board-within-a-board that turns other directors into second-class citizens.” The resulting dynamic of distrust can tear asunder a board’s relationship with management by creating confusion about whose best interests are being peddled.

4. The Meddler. Good directors take a 10,000-foot view, focusing on topics such as succession, strategy, and industry dynamics. Contrast that with the meddlers.

The folks who like to “get all mucked up in operational details” and the “day-to-day running of the business,” which often irritates the board and a company’s staff.

5. The Pontificator. This is the person who places such a high value on his or her opinion on all topics, especially “matters of state” such as world affairs and social trends, that it absolutely must be the leading edge of conversation … with everyone.

The “self-important bloviator” is a constant distraction that saps the board of energy to deal with the pressing matters at hand.

As Welch points out, you don’t have to break the law to be a deficient board member. But a deficient member or three can break the board.

Connect with the League in 2014 • Sign up for access to member-only areas on www. lscu.coop • Be in the know about League/industry/credit union news by signing up to receive eSignal Daily • Connect with the League through Twitter (@LeagueofSECUs) and Facebook (League of Southeastern Credit Unions)

NCUA: Interest Rate Risk a Main Priority The NCUA outlined its main priorities for 2014 and interest rate risk is at the top of the list, along with cyber security. Outgoing NCUA Region III Director Herb Yolles told attendees at the Leadership Development Conference in November that the agency would be keeping an even closer eye on interest rate risk.

NCUA Chairman Debbie Matz told the CU Journal in January that as interest rates rise, the possibility is risk also rises. It’s a main priority of the NCUA in 2014 because interest rates are already beginning to rise.

Credit unions need to look beyond the yield of the loan and make sure that they are mitigating risk on the balance sheet.

A good way to alleviate the stress of interest rate risk is to have an audit from a qualified third party.

LEVERAGE has expanded its audit and consulting services into Tennessee by acquiring the audit services from Hiram Hollifield, Jr. CPA of Chattanooga, TN and formed the CU Audit and Compliance Group.

LEVERAGE now has one of the largest and most experienced audit and compliance staffs in the credit union industry. Tennessee credit unions will continue to have their audits performed by the CU Audit and Compliance Group, while Alabama and Florida credit unions will have their audits performed by LEVERAGE’s Audit and Consulting.

With interest rate risk a top priority of the NCUA, credit unions should consider LEVERAGE’s comprehensive audit services which can service all asset sizes in the credit union industry.

2014 Director’s Checklist Below is a checklist of items that you, as a director, can do to get the most out of your credit union’s league membership in 2014.

• Participate in webinars specifically designed for board members • Attend educational events that help meet training requirements and/or are designed specifically for directors • Be a credit union advocate by attending League advocacy events • Join CUNA’s Volunteer Network

State GACs: Why directors should attend The state GACs are packed full of valuable advocacy and regulatory information with opportunities for directors (not just the CEOs) to learn more about advocacy and build relationships with lawmakers.

Directors who attend the GAC can benefit from the following: • Face-to-face conversations with the state lawmakers who represent your credit union’s district(s) • Timely information on legislative issues impacting your credit union • Information on how you can be more engaged with credit union advocacy issues and the PAC – and why that matters

Director’s Spotlight Why should directors attend conferences, like the Leadership Development Conference, and interact with lawmakers and regulators?

“I think for most, or many, directors or members that attend conferences where an elected official is speaking or visiting, it may be the only time they will get to meet and talk with them. It’s good for the credit union as a whole for us to speak with them and show support for the movement. If we show that we are interested in them visiting, it might get others to attend more of our conferences,” Kenneth Livingston, chairperson of supervisor committee, Family Security CU

• The inside scoop on upcoming campaigns and elections – what’s at stake in 2014 As 2014 is an election year in both Alabama and Florida, attendence at this year’s state GACs is more important than ever.

Make plans to attend today.

Click here to register for the Alabama Credit Union Association (ACUA) State GAC, Feb. 4-5, 2014 in Montgomery.

Kenneth talks with Alabama Lt. Gov. Kaye Ivey at the LDC. He knew Ivey when she served as the state treasurer and he was a Morgan County Commissioner.

Click here to register for the Florida Credit Union Association State (FCUA) GAC, March 25-26 in Tallahassee.

LEVERAGE Welcomes Lisa Burroughs

Register NOW for 2014 CUNA GAC

Lisa Burroughs joins LEVERAGE as its new senior vice president of strategy and business operations. Burroughs has spent the vast majority of her career working in credit unions. She has served as vice president of marketing, president and chief executive officer, as well as chief operations officer for credit unions ranging from $60 million to $1.3 billion in assets.

Make plans to attend the 2014 CUNA GAC in Washington D.C., Feb. 23-27. The more directors that take part in the League’s grassroots efforts, the more progress that can be made. Lawmakers appreciate hearing from volunteers who give of their time to see the industry succeed.

“Joining the LEVERAGE team is an exciting opportunity,” said Burroughs. “I’m looking forward to helping an already successful LEVERAGE as it continues to grow and ensure the company is not only meeting the needs of credit unions today, but also the future needs of credit unions.”

To receive the latest news from the LSCU, CUNA, and the NCUA, sign up for the League’s weekly newsletter, eSignal, at www.lscu.coop. To subscribe to the Director’s Resource Newsletter email: submissions@lscu.coop.