Will Board Term Limits Reshape Everwise Credit Union?

Jason Osterhage is the President and CEO of Everwise Credit Union. This guest contribution reflects his personal opinions and experiences.

In my time as President and CEO at Everwise Credit Union ($5.4B, South Bend, IN), a key focus of ours has been to mature, to govern better, and to be worthy of the trust our members place in us. We believe a pivotal part of that journey, one that set the stage for what’s to come, was the adoption of board term limits in 2023.

This is just one story of one board’s recent governance maturity journey. I won’t pretend the journey is complete or that we do everything right. But I am proud of the progress the Everwise board is making and inspired by their commitment to continued development.

What we’ve implemented at Everwise is not a one-size-fits-all model, but I do think every credit union CEO and board chair can use our experience to reflect on their own boards, governance challenges, and opportunities.

Adopting term limits was not an easy or quick decision. It took much deep reflection, hard conversations, and a willingness to look in the mirror. Today, it’s a critical driver behind our board’s journey of accountability and growth.

The Debate Behind the Decision

Our governance journey began, as many do, with some big changes.

A few years ago, a long-serving board member who had served on the board for nearly 40 years stepped down and we had a new board chair for the first time in a quarter century. Around that time, I was hired as the credit union’s fifth CEO in 93 years. I was also the first to come from outside the organization. That shift brought a fresh perspective to a traditionally stable, internally led organization.

The new board chair came in committed to bridge from our past to a new high-performance future. Management helped by setting up a governance operations squad to provide stronger support—a small team of people with professional skills, who know about good governance, and who work full time supporting the board’s effort to operate well.

Debates about term limits began in early 2023 with some of the expected objections.

“What if we lose a great director?”

If you’re afraid to lose one person, maybe you don’t have enough strong directors.

“How do we preserve institutional memory?”

If institutional knowledge lives too much in people’s heads, maybe you need better documentation.

“Shouldn’t we just coach underperformers instead?”

Are we actually doing that? If you don’t coach or remove ineffective directors, then term limits are probably necessary.

The board and our leadership team ultimately realized term limits could serve as a “forcing function” for maturity and pipeline development. We settled on five terms of three years, or 15 years total, and no renominations after age 75.

Get Comfortable With Being Uncomfortable

In mid-2023, our board was facing some ongoing difficulties. Although this was uncomfortable, we needed that. Sometimes we should feel uncomfortable — that tension creates urgency and the will to act.

Myself, my board chair, and the chair of the governance committee began to seriously reflect on how Everwise was performing. We had to ask, “How strong are we, really?”

Adopting term limits helped ignite a shift in our mindset. They forced our organization to:

• Plan Ahead — If you know someone’s rotating off the board in three years, you start building a pipeline today.
• Improve Onboarding — You don’t have 15 years to get a new director up to speed. You have one.
• Clarify Expectations — If a director is underperforming, you no longer kick the can. There’s a clear time horizon.
• Distribute Leadership — No one person becomes irreplaceable. Everyone is expected to lead.

In short, term limits require a board to have more structure, intention, and discipline, and that changes how directors engage with one another, with the CEO, and with the organization as a whole.

It is a two-way street, though. A high-functioning, mature board requires more athleticism from the CEO.

Look, we’ve probably all heard a credit union CEO or two remark that they were glad their credit union didn’t have term limits because, “I’ve got my board where I want them.” Although some part of me I’m not proud of might envy a CEO taking it easy, that’s not what’s best for any credit union. It’s better if the CEO has to hustle, to continuously earn that confidence and trust. Every new director needs to rehire me as the right CEO to lead the credit union forward. That’s a feature, not a bug. It means I can’t get complacent. Term limits create higher accountability for the CEO, too.

It’s OK To Ask For Help (Recommended Even)

During this process, one thing became clear: We weren’t going to figure this all out on our own, and we shouldn’t try.

Just as we expect our members to lean on us when making financial decisions, our board needed an outside perspective to challenge assumptions and expand its toolkit.

We joined the National Association of Corporate Directors (NACD), a move that might seem commonplace in the corporate world but is still rare in the credit union space. This made it possible for our directors to access resources, frameworks, and peer conversations that elevated the way they think about board work.

We also brought in a consulting firm to help us take a hard look at our board composition, skills matrix, succession planning, and meeting cadence through the lens of what our organization would need in the next five, 10, or 20 years. Critically, each board director received individualized 360º feedback on their contributions and development opportunities. It was through this partnership that our board developed the roadmap we’ve been following ever since. The board term limits were just one part of that.

Imagine plotting all your board members on a two-by-two matrix. How many great directors do you really have? (illustrative example).

Now imagine improving director accountability and board governance operations such that individual directors improve and to overall board develops (illustrative example).

Don’t Be Scared To Evolve

Everwise is now among a relatively small group of state-chartered credit unions in the United States that both compensates board members and imposes board term limits.

Between 18 and 22 states currently allow board compensation for credit unions, and federal credit unions can’t compensate or impose formal board term limits under current law. But where it’s possible, I think we in the credit union industry should be asking tougher questions. And, the law shouldn’t be an excuse. Mature, excellent governance is mostly about talent and culture. Any board can be great.

None of this is easy. Our board has stumbled. We’ve had hard conversations. Our journey has required growth by management, too. This isn’t a one-size-fits-all solution. There are some other strong CU boards out there. This is simply our case study in progress.

Don’t Stop Here. Did you enjoy these insights? If you did, I encourage you to join the NACD and buy the book “Building Better Boards” for yourself and your chair. Read that book together and discuss.