In credit union boardrooms, the words "sustainability" and "resilience" are used constantly, often interchangeably. While closely related, they are not the same. Understanding the distinct role each plays—and how they work together—is one of the most critical responsibilities of a forward-thinking board. Misunderstanding the difference can lead to a critical gap in your strategic planning, leaving your institution vulnerable.
Sustainability: The Plan for the Marathon
Think of sustainability as the marathon runner's long-term training plan. It's the ability to create value over the long haul by balancing economic, social, and member-centric considerations. A sustainable credit union has a robust business model, engages in ethical practices, and is deeply committed to meeting the needs of both present and future members. It's a measure of enduring health and long-term viability.
Resilience: The Ability to Take a Punch
Resilience, on the other hand, is the boxer's ability to withstand an unexpected punch and stay in the fight. It is your credit union's capacity to absorb shocks—whether from an economic downturn, a natural disaster, or a sudden competitive threat—while maintaining core operations and continuing to serve members. Resilience is about robust contingency planning, agility, and the ability to adapt when the unexpected happens.
How to Build Both: A Board's Checklist
While distinct, these two concepts are mutually reinforcing. A sustainable organization is naturally more resilient, and a resilient organization has the stability to pursue long-term sustainability. Here's how boards can foster both:
To Build Sustainability:
- Regularly Review Your Business Model: Ensure it is still creating unique value for your member segments.
- Integrate ESG Principles: Consider Environmental, Social, and Governance factors in your strategic decisions.
- Invest in Your People and Community: A strong culture and deep community ties are foundational to long-term success.
To Build Resilience:
- Conduct Annual Scenario Planning: Stress-test your strategy against a range of plausible futures, not just a single forecast.
- Maintain a Strong Capital Position: A healthy capital buffer is the ultimate shock absorber.
- Develop a Robust Governance Calendar: Ensure that risk management and contingency plan reviews are proactive, scheduled events, not reactive afterthoughts.
By intentionally cultivating both sustainability and resilience, a credit union board can fulfill its ultimate duty: to ensure the institution not only survives for its members today but thrives for generations to come.
Our consulting frameworks for strategy and governance are designed to build both sustainability and resilience. To learn more, schedule a private consultation.
