In the next week I will present three active situations where members are deeply unhappy with their Board leadership. In every case the board has tried to ignore, at best, or at worst, silence, these efforts at member engagment.
These cases are unusual but not in the board’s hunkering down and ignoring the owners. Rather it is in the members’ efforts to share publicly their frustration trying to engage as owners.
There are similar member attempts that have yet to rise to public visibility. These cases are just a few of the concerns that members and even employees have shared with me.
Today’s example is from a member-owner and long time credit union professional who started his career with this credit union. He then moved to manage a national CUSO of leading credit unions and became a consultant for several more credit union organizations. In other words, he is a true believer.
This is his letter to the Board Chair. I have added the subheads and deleted specific names or identifiers in the letter.
April, 2025
Mr. Chairman:
Since I first began to discuss the matter of board governance almost 10 years ago with (names omitted) and in my further discussions with you, I have stood on the position that it is one of the primary responsibilities of the Board to continuously improve, enhance and encourage member/owner participation.
Our credit union should represent the best principles of the co-operative business model, and my board should be acting in a manner that builds on those principles that make us different from for-profit financial institutions. As we have discussed in the past, the continuation of the current practices surrounding the board nomination and election process and the annual meeting fly in the face of such principles and practices.
The Annual Meeting
Let’s address the issue of the Annual meeting first. How exactly can you defend having a 9:00 am meeting on a Wednesday as having anything but a negative impact on encouraging member participation? How can you defend the restrictive rules that control and limit the agenda and discourage any member interaction with the board at the meeting? How can you defend the minimalist attempt to notify and promote the meeting to the owner members? Where is the big banner proclaiming the date, time and location of the meeting on the credit union’s website? How about some signs or interactive messages in the branches? How about a social media campaign to your members using email and text messaging to encourage their participation?
I dare you to ask a teller or even a branch manager about when the annual meeting is being held, I have, and I was embarrassed for them. How about the search function on the website? Try entering, “Annual Meeting” and see what you get.
What are you afraid of?
What are you afraid of? Give me one good reason why any member- owner should not be able to come to your meeting next week and ask you or XXX a question about anything they want concerning credit union governance, operations or products and services. Why shouldn’t one of your owners be able to ask you what a board member actually does to earn around $40,000 per year, why the 2023 Form 990 reflects a Split dollar benefit loan to the former fired CEO in excess of$10 M, or what a subsidiary LLC does to earn $8.5 M per year?
Solutions Rejected
What really upsets me is that we have talked about actual solutions to these issues more than once. I have even written and submitted sample by-laws which would require the nomination of at least two qualified members for every open board position so that there is an actual election that could be easily accommodated using electronic voting.
We have also talked about the need for term limits to make for a healthier board turnover and broader owner participation. I have no complaint about the qualifications of the current board, but with several hundred thousand owners you can certainly identify enough other highly qualified options to have a real election for board positions.
Incumbents should be required to supply some modicum of justification for their re-election to a very important, difficult and highly compensated position.
An Oligarchy
The word “oligarchy” gets tossed around a lot today. I would suggest that the current nomination process and pursuant “Non” election process along with the seemingly secretive and hidden nature of the Annual meeting is signal to any half-way informed owner that the credit union is in fact a practicing oligarchy. A governance model in which power rests in a small group.
The second of the Rochdale 7 Cooperative Principles is democratic control and the third is member economic control. I ask that you and your fellow board members make an effort to make sure my credit union is the best representation of those principles. I am hopeful that my suggestions will finally get the attention and action they deserve
S. A Lifelong Member