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 union.

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 differently.
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.

Policy Governance® Simplified for Credit Unions

Policy Governance® Theory:

The Policy Governance® Model:

Policy Governance® Simplified
for Credit Unions