From a recent exchange on credit union leadership:
In the specific case of the Supervisory Committee I made the mistake of thinking that the lack of expertise was a problem that justified change. . . the ancient Greeks selected their leaders by lottery and governed that way. They proved that expertise is not the essential but more critical is widespread participation and representation.
In my many years as CEO I found that common sense, proximity to the issue at hand, were as important as expertise. And If expertise was needed it could be hired. Our Supervisory Committee always had a high-quality CPA firm, a high-quality CFO on staff and a high-quality internal auditor on staff. When we ended the Supervisory Committee, we lost one more element of member participation. I did not see the extent then that members would be distanced from their credit union.
I see that distance today. Credit Union executives are paid far more than most of the members and live a life unlike that of the members, in particular those members and potential members who need credit the most, need financial literacy, need housing, and need a community-based member controlled source of credit.
The Challenge of Distance
This issue of distance is critical to how cooperatives function and the difference they claim to make in members’ lives.
How representative is the board of the membership? By income levels? By employment experience? By proximity? By age?
Are directors appointed for “expertise” and “community roles” versus lived experience?
How are new board candidates identified and by whom? Does the existing board reach out to friends first or seek member input and advise?
Inbred Leadership Selection
As in many other areas of life and leadership, an inbred pattern of leadership selection without opportunities for new points of view, is not a problem, until critical choices arise. Should we merge? Invest in this CUSO venture or in that digital shiny new service? Even changing to a new supplier trying to enter the market? Support a new coop campaign or assist another credit union in our area?
When a board opts for friends and experts for leadership, and member voices are not wanted, the critical decisions may reflect a very different perspectives and criteria far removed from members’ lives.
Effective leadership, especially at crucial turning points, is always a judgment not a technical choice between competing experts or data projections. When was the last time your board sought member input on any issue?