“The agency should diligently work to preserve small credit unions, as well as minority and women-operated credit unions. In addition, the agency should require all merger solicitation documents to provide, without limitation, a discussion of any change-in-control payments and other management compensation awards and agreements, and that such disclosures are written in plain language and delivered to voting members in a reasonable time prior to the scheduled merger vote.”
A First Reaction to NCUA’s July Board Meeting
Has NCUA heard of Zoom? The July meeting with audio presentation and downloads does not seem technically up to date.
As churches, schools, book clubs and even families have mastered the art of live video conferences, it would seem the minimum skill for a government agency which overseas a $1.6 trillion credit union system.
Maybe credit unions could offer to set up a system for them? Makes one wonder what the remote exam experience is like…
McWatters on Risk Based Net Worth Rule
At NASCUS conference, October 22, 2015, a news summary:
Regarding the new risk-based capital rule, McWatters repeated the statement he made during the board meeting that he believes the final rule is “illegal.” “A future new NCUA board may take a different view (than the current board) with respect both to the legality and approach of the new rule.”
April 2016 from NCUA’s Newsletter: “NCUA and credit unions will need to keep an eye on the House Financial Services Committee, which is reviewing capital standards for community banks. NCUA will need to watch this process very carefully as it unfolds, and the board may need to reconsider our risk-based capital rule. . . I dissented to the adoption of this rule because I found many aspects of it were not justified under the Federal Credit Union Act. As credit unions for the most part are thriving without the rule, I continue to challenge this action, and nothing has dispelled my very serious concerns about its impact when it takes effect in January 2018.”
RBC Status
Today the rule is still on the books with the implementation date pushed out to 2022. (https://www.ncua.gov/newsroom/press-release/2019/board-proposes-delaying-risk-based-capital-rule-until-2022)
What NCUA Nominee Kyle Hauptman can learn from McWatters’ NCUA Tenure
A reporter asked me what was Mark McWatters’ legacy of his six years on the NCUA Board.
My answer from a credit union point of view: “His promising potential was unmet, and he was a major disappointment in the way he led us on.”
However, there could still be an important lesson for Kyle Hauptman, should he wish to learn from his predecessor’s experience.
The Initial Enthusiasm
When McWatters came to the NCUA Board in August 2014, his critiques of agency practice and policies were well reasoned, documented and on target.
His concerns included a lack of transparency on NCUA’s budget, the OTR calculation, the failure to detect fraud resulting in NCUSIF losses, and the condescending approach of the agency and examiners.
He voted against the agency’s budgets and against the “illegal” RBC rule which were nonetheless approved 2:1.
His most stinging rebuke of NCUA’s leadership was in a May 2015 speech to the Pennsylvania League’s Annual Meeting:
NCUA should not treat members of the credit union community as Victorian era children–speak when you are spoken to and otherwise mind your manners and go off with your nanny—but should, instead renounce its imperious “my-way-or-the-highway” approach and actively solicit input from the community . . .With the strong visceral response within the agency against budget hearings, it seems that some expect masses of credit union community members to charge the NCUA ramparts with pitchforks and flaming torches to free themselves from regulatory serfdom. I, conversely, welcome all comments and criticism from the community.
Regulatory wisdom is not metaphysically bestowed upon an NCUA board member once the gavel falls on his or her senate confirmation. NCUA should not accordingly pretend that it’s a modern-day Oracle of Delphi where all insight of the credit union community begins once you enter the door at 1775 Duke Street in Alexandria, Va.”
Credit unions welcomed this honest assessment. It was their lived experience. At the 2015 GAC, he described his vision for NCUA as having “confidence, courage, and conviction to chart a regulatory path for the credit union community. . . based upon a transparent and fully accountable appreciation of the unique structure and attributes of the cooperative, not-for-profit business model.” He called on NCUA and the credit union community to work together in a new direction through a “collaborative and collegial process with the goal of building trust and inclusiveness.”
Upon being appointed Chairman by President Trump he said, “We best fulfill our obligation to protect America’s $1.3 trillion credit union community. . . by making the NCUA more efficient, effective, transparent and fully accountable.”
Good Intentions Not Realized
All of his intentions to change the agency’s culture were unrealized. Budgets increased every year even after closing two of six regional offices. The largest fraud ever discovered, the $40 million loss at CBS Employees FCU, was addressed only in an IG whitewash. RBC was not repealed, but just kicked down the road. Credit unions were closed and conserved without comment or explanation.
As for the promised annual review of the NCUSIF’s normal operating level, raised in 2017 to 1.38% as a temporary action using unsubstantiated numbers, two more budget cycles have passed with no efforts to reduce back to 1.3%.
Most importantly, when the opportunity came to close the TCCUSF and return up to $3.0 billion to credit union members, he instead kept the funds in the NCUSIF promising future dividends. This action was taken despite more than 2,000 comments opposing the proposal in whole or in part, and only 6 in favor. The era of Victorian Children and regulatory serfdom was fully back.
What Happened to McWatters’ Promise?
I believe two factors contributed to his leadership failures. The first was that his heart did not seem to be in the job. Twice his name was announced for other political appointments, once in a Presidential nomination for the EXIM bank board; and second, as a rumored director for the CFPB.
Throughout this tenure, the Washington Post reported he was working from home in Texas, traveling to DC only for Board meetings or testimony. He was in effect an absentee landlord.
Whether the result of his professional style, his philosophy of the board’s role or just ennui, he ended up adopting the agency thinking he had so decisively and accurately critiqued.
He defended selling 4,000 member loans to a hedge fund. When members showed up at a board meeting, they were shunted to a separate room (with their placards, not pitchforks). He waffled on rescinding the “illegal” RBC: “I concluded this was not the right time for a material diminution in the RBNW capital requirement for credit unions.” (June 2020) He publicly advocated for more resources: self-funding liquidity options for the CLF and a larger NCUSIF.
In August 2018 he spoke to the African American Credit Union Coalition: “ The NCUA has a statutory obligation to preserve minority depository institutions and encourage the creation of new ones, and that it is one we take seriously.” In his June 25, 2020 NCUA board meeting his recommendations for the future of MDIs were merger, merger and merger: “for example five $100 million MDI credit unions could consolidate into one $500 million MDI institution and economies of scale and market force.” So much for statutory obligation.
In leadership, he gave up. No efficiency, effectiveness, transparency, or full accountability achieved.
Why is open to interpretation. Mine would be that he lost any commitment to the credit union mission. His primary goal was protecting the agency and its resources. He became the bureaucrat he had initially challenged so eloquently in Pennsylvania in 2015.
What Kyle Hauptman Might Learn
There are critical questions Hauptman will have to answer that will influence his role as an NCUA board member. Bureaucracies do not like change. There will be constant pressure to conform to the traditional agency verities. That is the option McWatters took.
- Is it a part-time or fulltime job? What is my personal commitment to the position?
- How do I learn about the different approaches to board members’ responsibilities?
- How do I learn most effectively about the history of the industry and agency I am regulating?
- What kind of personal staff resources am I given and how do I select them?
- To whom am I accountable for my decisions?
- What role, if any, do I perform in overseeing the performance of agency staff? What duties are delegated, and which are retained by the board?
- What is my view of credit unions’ mission? How do credit unions differ from banks?
- How will I measure my effectiveness as a board member?
- How will I interact with the industry?
- What is my contribution to the agency’s agenda?
How Hauptman approaches his learning curve, the constituencies and resources he approaches and the lessons he takes away in the next six months, will likely determine the direction of the rest of his tenure.
One More Time: Why Risk Based Capital is a Bad Idea
In the June 2020 NCUA board meeting, Chairman Hood’s latest RBC proposal was withdrawn from the agenda at the last moment. It did not receive the light of day, so we do not know what was in it. Even so, outgoing board member McWatters indicated his opposition to any change in a June 29 credit union press release stating; “this was not the right time for a material diminution in the RBNW capital requirement for credit unions. . .”
Even though all three banking regulators ended RBNW as a valid approach for community banks in September 2019 and McWatters earlier opposed the rule as “illegal” it appears this destructive concept has somehow come back to life.
With that prospect in mind, I think it is useful to remember some of the reasons why the concept Is so flawed. The article excerpt below urged credit unions to comment on the second RBC proposal by NCUA in 2015. It looks as if the battle may have to be fought again.
Training Fleas and RBC
Escape the circus and live beyond the limits of the imaginary lid. (March 2015 Creditunions.com)
This YouTube video demonstrates how to train fleas. This column urges credit unions not to behave the same way when it comes to NCUA’s redrawn risk-based capital proposal.
The sequence of events the video illustrates are as follows:
- The fleas are placed in a glass jar.
- A lid is placed on the jar and left undisturbed for three days.
- When the lid is removed, the fleas will never jump out of the jar; their behavior has been set for the rest of their lives.
- Moreover when the fleas reproduce their offspring will follow their example.
Policy Lessons For Risk-Based Capital
The NCUA’s RBC #2 proposal lists more than 70 categories for which credit unions would be required to calculate capital according to their legally mandated rule’s risk weighting.
These weightings — like the lid on the jar — become the primary screen for filtering decisions such as what assets a credit union should hold, how loans should be priced, and the composition of the balance sheet.
This one-size-fits-all formula will reduce the diversity of credit union activity and in so doing, change the focus from serving members needs first, to meeting examiner expectations.
Two Comment Letters Address This Outcome
Chuck Bruen, CEO of First Entertainment Credit Union ($1.1B, Hollywood, CA) wrote this in his Feb. 13 comment letter:
“The NCUA’s risk-based capital rule is overly complex and inappropriate for credit unions and their business model. … NCUA’s risk-weights also experimentally incent and dis-incent credit union lending and investment behaviors in unprecedented and untested ways.”
This steering of balance sheet decisions was also a concern in a comment posted by Randy Karnes, CEO of CU*Answers:
“I believe the revised RBC rule penalizes credit unions for specific activities such as real estate lending, member business lending, and credit unions chartered to assist the un-bankable, by placing a capital tax on the resulting assets from low income or credit lending to the poor.
“We believe the end result will be thousands of homogenous balance sheets in 2025 that the NCUA can easily understand from a supervisory perspective. However, this current risk posture of the NCUA cannot but fail to lead credit unions to shy away from diversity or the cooperative reason for the charter and field of membership.
“This rule would ultimately force credit unions into potential areas of investment and lending in which the credit union lacks experience, or create industry-wide concentrations that could be impacted by similar economic variables. In and of itself, this rule creates more risk than it proposes to control.”
FDIC Vice Chairman Analyzes RBC And Finds It Flawed
These concerns are not theoretical. The banking industry’s reliance upon the RBC formula already shows how it creates results that do not enhance safety and soundness. The outcome can even undermine the critical economic value contributed by financial intermediaries.
FDIC vice chairman Thomas Hoenig noted this in a speech to the International Association of Deposit Insurers in April 2013:
“If the Basel risk-weight schemes are incorrect — which they often have been — this too could inhibit loan growth, as it encourages investments in other more favorably, but incorrectly, weighted assets.
“Basel systematically encourages investments in sectors pre-assigned lower weights — for example, mortgages, sovereign debt, and derivatives — and discourages loans to assets assigned higher weights: commercial and industrial loans.
“We may have inadvertently created a system that discourages the very loan growth we seek, and instead turned our financial system into one that rewards itself more than it supports economic activity.”
RBC Comments Needed More Than Ever
The second comment period is even more critical than the response to RBC #1. The debate now is not about risk weights, ratios, phase-in periods, etc., but whether this new rule is good public policy for cooperatives.
The impact of the rule will be to create behaviors contrary to credit unions’ purpose and their role in the market place. It will decrease diversity and increase asset concentrations.
Credit union leaders must not become fleas in a jar. Comments on RBC#2 are more critical than ever — or this new rule could become a lid on the future of your credit union and the credit union movement.
Source: Training Fleas And RBC | Credit Unions https://www.creditunions.com/blogs/chip-filson-on-credit-unions/training-fleas-and-rbc/#ixzz6T48VFVHt
Getting the Best Leadership for NCUA: A Case Study
For the last decade the appointments, or repeats, to the NCUA board have been a total surprise to the credit union community. New names, no industry references.
After the fact, we learn the selections arose primarily from their Washington insider connections. Their lack of credit union cooperative understanding and/or management experience is glaring.
With no vision or expressed views on the unique role of credit unions, appointees instead swear an oath to safety and soundness. That mantra is used to justify whatever actions, regulations or policy changes are subsequently proposed.
Appointees lacking credit union experience has not always been the case. Until credit unions reassert their collective interest in NCUA board nominations, these three positions will continue to be consolation prizes for party loyalists seeking a government sinecure.
Appointing the First Federal Regulator
When the Federal Credit Union Act was passed in 1934, the responsibility for creating a new federal system was placed in the Farm Credit Administration (FCA). The concern of Roy Bergengren (a founder with Filene of the credit union system) was that there should be a single integrated movement, not dueling state and federal charter designs.
The Governor of the FCA asked his first assistant, Herbert Emmerich (who had helped draft the federal legislation and coincidentally, was a credit union member) to serve as interim director of the credit union division, until he hired an assistant to devote full time to this new responsibility.
Who did Emmerich ask for leadership recommendations? Roy Bergengren. They had worked together on the final legislation.
Bergengren knew that the new legislation must be implemented by a credit union advocate or end up stillborn. He gave Emmerich seven recommendations. Bergengren was in turn asked to determine each person’s interest.
The “Proper Credit Union Spirit”
Bergengren’s first choice was Claude Orchard, who when approached, said he would accept the $4,600 per year job. He thought Orchard had “the proper credit union spirit.”
In his July 17, 1934, response to Bergengren’s outreach, Orchard wrote: “I hope the “assistant director” will be permitted the chance to get out into the field to actually set up a few key credit unions and have the opportunity to train organizers both paid and volunteer. That would be a fine sort of job for me.” (Moody & Fite, page 167)
Once on the job, Orchard got Emmerich’s permission to actively encourage the founding of both state and federal charters. His main goal — to increase the number of credit unions in the United States — was a spectacular success. One example of his public advocacy is a speech to the New York Credit Union League in 1937 as reported in the New York Times.
Who Was Claude Orchard? Why was he so successful as the first Federal Regulator?
Claude Orchard began working at Armour and Company in Omaha, Nebraska in 1903. He was intimately acquainted with the financial problems of the company’s employees, many of whom were poorly educated blacks and immigrants working for 17-18 cents per hour.
He first heard about credit unions in 1929 from a lawyer sent by Bergengren to help organize credit unions in Nebraska. The two quickly organized the first Armour credit union which so impressed the company that management freed Orchard to travel to other Armour plants to organize more credit unions. By 1933 the number of Armour credit unions had grown to 70.
The Takeaway for Today: Speak Out
Ed Callahan, NCUA chair (1981-1985), frequently observed “people do what they know.”
Experience matters especially for those in positions of senior leadership. It frames relationships, brings life’s hard-earned lessons and shapes the values a leader follows in the job.
Two of the most sought-after outcomes in secular life today are money and power. But cooperative design is based on an inversion of these traditional market driven ambitions.
For credit unions to continue as a unique resource for America will require modern day Claude Orchards. These leaders must define and implement policies to bring renewed purpose to a movement whose regulatory institutions are desperately short of cooperative belief and understanding.
Isn’t it time for credit unions to SPEAK OUT before NCUA board openings are filled — rather than spending years trying to educate board members about the industry they supervise? Or more likely, to be totally dependent on the bureaucracy’s recommendations?
Issues Bigger Than Regulator’s Rules
In 1978, Sangamo Electric Company announced the closing of its Springfield, IL manufacturing plant and head office to move to Georgia.
The company had its own credit union. I had been Illinois Credit Union Division Supervisor for one year. My dad had worked at the company in the 1950s, so I felt an interest in the situation. The issue: what should happen now to Sangamo Employees Credit Union?
For me, the answer was simple. The sponsor and all its direct support, plus the members’ jobs, no longer existed. The employer-based “common bond” was gone. Therefore, it no longer complied with the state’s chartering requirements . It should be closed.
That was not the view of my boss, Ed Callahan, the Director of the Department of Financial Institutions. His logic was that with the company’s closing, the members needed their credit union more than ever. Their jobs were gone. The credit union would be more vital to their future than before.
He suggested we find a way to modify the charter so that the members, not the company or the regulator, could determine their credit union’s future. And that is what we did .
Regulators and the Current Pandemic
This incident came to mind when a CEO sent me NCUA’s interagency joint announcement: “Examiner Guidance for Assessing Safety and Soundness Considering the Effect of COVID-19 Pandemic on Institutions.”
The purpose of its eleven pages: “to promote consistency and transparency across the agencies, examiners will continue to assign supervisory ratings in accordance with the applicable rating system. . . CAMELS.”
“. . .it is essential that examiners maintain a clear understanding of the financial condition of each institution.” And “. . .examiners will distinguish between problems caused by the institution’s management and those caused by external factors beyond management’s control.”
Why is NCUA Sending this “Guidance”?
The paper appears self-serving, citing circumstances familiar to everyone. It reads more like a warning notice, than “guidance.”
Its bottom line is “we are telling you, be careful.” Is this a prelude to circumventing normal supervisory due process, using the pandemic’s uncertainty as an excuse?
There are three concerns with NCUA’s forwarding this directive to “promote consistency and transparency across agencies.”
- Why did NCUA believe this bank-drafted warning message was even appropriate for credit unions?
Credit unions are different from banks in fundamental ways. Their cooperative design, tax exemption, “common wealth” and reserve/capital options are intentionally unlike privately owned firms created to profit shareholders.
Credit unions fulfill a different purpose, one of which is to be an antidote to the shortcomings of for-profit financial options. The CLF and NCUSIF’s designs incorporate these cooperative differences.
- At this time every other arm of government including Congress, Treasury, the IRS, SBA and even the FED are crossing all their traditional “red lines.” Why is NCUA joining bank regulators to announce “business as usual” contrary to the activities of every other government entity?
- This “examiner guidance” makes no mention of the special credit union role in times of economic distress. Every day credit unions are waiving fees, lowering rates, providing forbearance and other special accommodations for members. These actions reduce a credit union’s “normal camel ratio ” outcomes. That is what coops are supposed to do with their members’ collective savings.
A current example is how 15 Vermont credit unions have provided $385 million in member relief, so far. Isn’t this the special “guidance” NCUA should be highlighting?
Rising Above Rules
While hitching NCUA’s wagon to other regulators may seem to enhance NCUA’s image, it diminishes credit unions’.
Credit unions were well positioned financially entering this crisis. The cooperative regulator is most effective when knowing how to see beyond the letter of the law and support the spirit of the movement. That is the Sangamo lesson Ed Callahan helped me to see.
This instinct to put members first lives in most credit unions. In this time, shouldn’t NCUA’s “examiner guidance” be to promote this essential mission? And even co-develop special programs with the industry to help members recover financially?
“Democracy Dies In Darkness”
As I listened to NCUA’s streaming Board meeting Thursday, June 25, I was reminded of this phrase on the Washington Post’s masthead : Democracy Dies in Darkness. The paper’s first slogan was aired in a 2017 super bowl ad.
The words convey a basic truth of democratic governance. They point to the powerful role of public information in discussion, analysis and decision-making, especially in regulation.
Listeners heard, as described below, that the agenda had changed with no explanation. Without transparency, actions become suspect. Trust is forfeited. Confidence lost.
An Email of Public Interest in the Meeting
A friend forwarded a copy of a credit union CEO’s email to the NCUA Board prior to the meeting:
NCUA Board and Staff,
In 1867, Samuel Fay invented the paper clip. Originally Mr. Fay was trying to find a tool to easily attach tickets to fabrics. It worked and evolved its uses with the same foundational design to the tune of 11 billion purchased annually.
In 1899, Johan Vaaler tried to reinvent it. A different design to accomplish, in essence, the same goal. He went so far as to claim it better, campaign and erect sculptures in its honor, but the failure of this design was its impracticality. Many paper clip versions can be seen today but Fay’s original design, with the greatest history and track record of performance, leads the industry. Vaaler’s patent expired quietly.
The FDIC, FED and OCC have unanimously ended RBC requirements and all the work related to its calculation. . .From their September 2019 press release: “The leverage framework will greatly simplify regulatory determinations regarding capital adequacy and eliminate the need for qualifying community banking organizations to calculate and report quarterly risk-based capital ratios in their Call Reports.”
This (new leverage framework) capital adequacy standard is the same calculation that the credit union industry has been using for over 100 years and banking regulators have concluded there is no benefit and high cost burden to move to RBC.
I ask you to consider Vaaler’s paper clip and let RBC discussions and concept expire – for good. We have a proven model, like Samuel Fay. Moving away from the RBC discussion will allow NCUA to proceed with a refocused effort toward doing the work of helping credit unions find ways to help our members – especially in these unprecedented and trying times.
Withdrawing RBC from the Agenda
Opening the meeting Chairman Hood announced the RBC topic had been withdrawn. No reason given.
Was it because he did not have a second vote to discuss the issue? Was it concern the topic was insufficiently addressed? Of all the topics on the agenda, none had more immediate or long-lasting impact on the industry.
Credit unions are “in the dark” about Hood’s decision. At the prior monthly board meeting, the directors failed to second to move a topic forward, but then explained why they refused to do so. This time no discussion. Board members avoid presenting their points of view. There is darkness on both process and substance.
Credit unions are left to wonder what their politically appointed leaders are up to. Board members are subject to public confirmation so their expertise and view of their responsibility can be assessed by the Senate. Appointees embody the public interest in credit union oversight.
Board members’ role is to be publicly accountable for agency performance. Their collective silence prevents any assessment of NCUA’s latest thinking on this vital topic. It sidelines industry input and experience.
Most critically it fails to enlist credit union support for their action. Regulations become edicts imposed, not rules cooperatively and democratically generated.
How Freedom Is Lost
NCUA’s abrupt withdrawal of the RBC topic, deals a double blow to democratic governance. The board shirks its public accountability. Credit unions are denied information to make their voice heard. RBC, the most far reaching regulation ever proposed, lies in limbo.
As the industry speculates on this event, the incident shows the fragility of the public process meant to direct and control the administration of regulation. The board works in darkness; the industry has no light, and another democratic check and balance is minimized.
And that is how freedom is lost, one small step at a time.
Awards and Institutional Culture
Most credit union associations, many credit unions, CUSOs and even some vendors present periodic awards to individuals or credit unions. These honor specific contributions and reinforce values the groups want to celebrate. Internally, awards reinforce the culture an organization is trying to cultivate.
NCUA’s Awards in 1977
My first recollection of industry awards for results was in a 1977 NCUA press release. Details are now vague. But I recall two specific recognitions.
The first was for the agency employee(s) who had helped charter the most new credit unions during the year. The second was for credit unions that achieved the highest amount of savings growth.
Both awards embodied the agency’s view of its mission and results. The contrast with today’s absence of new charters, promotion of mergers and idolatry of net worth is stark.
An Insight from Police Reform
The Denver Police Department’s decade long effort at cultural reform included reviewing its award ceremonies.
Prior to this effort, every year officers were recognized for “justified use of force,” that is deadly shootings in the line of duty.
The new award, honoring efforts to deescalate encounters, was named the “perseveration of life.”
Awards Say Who We Are
Whether the action be a lifetime achievement or a one-year recognition for outstanding results, awards publicize organizational mindsets.
For many years NCUA and state regulators have viewed their primary task as a mortuary for credit unions they supervise. The announcements come on Friday evenings after reporters have gone home of another “justifiable homicide.” IBEW Local Union 712 Closes; West Penn P&P Assumes Loans, Assets, Shares
Might a new recognition change this regulatory mindset? Is now the time for the credit union community to honor the regulator, supervisor or examiner(s) whose present actions best exemplifies cooperative innovation, credit union ideals and most importantly, sustainability?
NCUA’s Mindset in Responding to Problems, Is the Problem
Every organization will experience problems. Some imposed by external events. Others by internal failures because all are run by imperfect human beings.
Internal performance shortfalls occur even with the strongest, well-documented corporate cultures: harassment, inappropriate comments, disdain for conflicts of interest, performance failures, improper expense claims or even showing up on time.
Unfortunately, the instinctive response by government is to spend more resources. Moreover, the situations are addressed in secret with no explanations or analysis, except for after the fact announcements of a “solution.” With no transparency, there is no accountability.
A classic example is NCUA’s approach is the response to the recent revelations of a corrupt General Counsel and an earlier IG report on questionable travel reimbursements for senior staff.
Throwing Money at the Issue
Instead of addressing issues head on, the NCUA Board reacted to the public revelations of these in-house shortcomings, by creating a new position: Chief Ethics Officer.
The salary range: $227,113 to $263,000 per year. However, this may be just the initial increased cost as the person’s duties include “direct(ing) the activities of the office, and assisting and advising subordinate attorneys and/or other staff on assignments”
A Leadership Failure, Not a Resource Problem
The Chief Ethics posting above also lists the follow requirements:
EXECUTIVE QUALIFICATIONS: you (must) possess all the executive qualifications listed below. (details omitted)
Leading Change.
Leading People.
Results Driven.
Business Acumen.
Building Coalitions/Communication.
These would be superb qualifications for a Board member. It is instructive that the Board did not believe these qualities existed within its own body or within the staff of the agency. One has to question whether these capabilities can be imported if they are not part of the culture.
Spending more resources when problems occur is a mindset that provides a façade but not real change. The “ethics issues” or other challenges will just come back in another guise. For effectiveness has to start at the top. It cannot be delegated. In most organizations it is called leadership.