Democracy is hard work. Most people have more urgent personal priorities than worrying about the direction and leadership of their credit union. Or for that matter even the circumstances of the many other organizations organized on democratic principles in which one participates.
However in credit union design, democratic governance–one person one vote–at the annual election of directors is the most powerful tool the member-owners have to exercise their oversight. The reality is that contested elections are a rarity. Most boards are self-appointed in a perpetual process of nominating just the actual number of internally selected candidates as there are current openings.
Even routine member Q&A at annual meetings rarely happens when the agenda comes to the “other business,” item. Comments are carefully controlled if even allowed. “All questions must be submitted in advance.” “Speeches will be limited to two minutes.” etc
The annual meeting’s formal rules are controlled by the incumbents’ chosen parliamentarian who rules out of order, any motions or conduct not consistent with the board’s intentions.
A Member-Owners’ Representative Takes the Floor
On October 11, 2022 at SECU’s annual meeting the unexpected happened. A member and former long serving CEO, Jim Blaine, rose to make a statement about the “change of culture and new direction” the board and recently hired CEO were taking the credit union.
His statement had three parts.
- A history of SECU with its strategic and business priorities and overall performance since chartering in 1937.
- A description of six current activites for which further explanation to the membership was requested. These changes he called Open Membership, Merger with Local Government FCU, Introduction of risk-based lending (RBL) for consumers and business lending, Cancelation of the tax preparation service and Expansion outside North Carolina.
- Two motions were proposed after describing these initiatives. The first called for a response to specific questions about the six areas and the second: The Board update, publish, and make available to all member-owners its’ Strategic Plan for SECU no later than 90 days prior to the 2023 Annual Meeting.
Several members spoke up in support. Both motions were approved without any voiced opposition or objection. Thus SECU’s member engagement and awakening began.
A New Blog: SECU-Just Asking
Blaine’s full statement given at the meeting is here. He also posted it on his new internet blog called SECU-Just Asking. The site evolved to become a public dialogue on the board’s response to the motions. Almost daily updates are being posted on these topics and other events related to SECU’s priorities or performance issues.
Blaine’s writing style is forceful and creative relying on logic and data to support his positions. He is an ardent advocate for his views. He is committed to the daily task of presenting observations and alternative views to prevailing priorities. The blog has become an open forum for multiple member comments.
As of now some of these six topics have been put on hold: the proposed merger with LGFCU, the change in FOM and expanded operations outside North Carolina. Tax preparation services have been discontinued.
The most significant issue remaining at the forefront of current posts is the impact of RBL and the financial performance of SECU.
Jim Hayes the CEO resigned in mid 2023 to become CEO at State Department FCU . He was succeeded by longtime SECU senior executive and Chief Operating Officer Leigh Brady. She has continued the RBL and other internal projects initiated by Hayes.
A First Takeaway: What Democratic Practice Entails
Most CEO’s to whom I spoke about this event were critical of Blaine’s 2022 spokesperson’s role in challenging the credit union’s direction. Most asserted he had ended his tenure at leadership. Now it was time for him to be silent and give the new CEO and the board who chose them, the freedom to take the credit union in whatever direction their collective judgement decided.
For Blaine this was not a solo exercise. His statement distributed at the Annual Meeting was prompted by numerous calls from current and former employees, members and others who were deeply concerned about the direction and new “culture.“ They asked that because of his standing in the cooperative community, he take the floor to articulate their worries and seek public dialogue between the credit union leadership and the member-owners.
Blaine’s presentation-request is the first lesson in member governance. Democracy is a public, not a private event. It entails open meetings with points of view which may challenge current wisdom or practice. Such public dialogue is often uncomfortable for those in authority.
From the annual meeting video, the moderator seemed surprised at Blaine’s ask on behalf of the owners. The members quickly approved the two motions made under the regular rules order for the meeting.
The first condition for democratic government is public “speech,” ideally full and open to all points of view. It is no accident that the 1st amendment to the Constitution was for freedom of speech. Or that the public press in America is called the fourth estate, a necessary parallel to the proper functioning of the executive, congressional and judicial branches of government.
Uncomfortable in Public
For those in positions of authority, public dialogue can seem threatening to their prerogatives and assumptions about leaders’ roles. The response to critics is often PR or marketing campaigns designed to overwhelm one side of an issue. Sometimes even special crisis managers or experts in publicity are hired to promote the message.
For those in positions of public service, direct dialogue with constituents can be uncomfortable. Written statements are preferred sometimes with FAQ’s attached, or “no comments” issued about key events. Public board meetings are carefully controlled and sometimes cancelled. Speeches by principals to their audiences are made over zoom avoiding live in-person contacts.
Democracy depends on public expression. Whether it is public rallies to oppose a dictator’s rule as in Venezuela, or the weeklong public conventions shows by the two parties, democracy is best served by open meeting spaces.
The Next Event in Democracy’s Awakening at SECU
Readers can follow the details about the Board’s response to these two 2022 motions by going to Blaine’s blog. I will pickup the story further down the road when the board decided that this exercise in member democracy was too unsettling to be left open ended in future annual meetings.
The SECU board’s surprise to this event is itself instructive. Most persons in elected or appointed positions of responsibility believe in their presumed authority. “I was chosen to make these decisions based on my personal ability.” Or just the explanation, “I’m in charge now.”
An outsider might ask of SECU’s leaders as they would any group in this situation: Were there no ears to the ground? Did the board and executives truly grasp the scope of the changes they were introducing? Were the strengths and advantages of the previous SECU model and its decentralized leadership understood?
As one watches this two-year-old drama unfold, look around and assess one’s own awareness of the organizational environment in which one navigates. Is there open dialogue on critical issues—or just public posturing? Are leaders approachable or hiding behind a veil of press releases and written speeches? Do boards actually meet and discuss vital issues, or just keep the group consensus intact to avoid personal controversy?
Democracy is hard work. It takes practice. It entails public events. Many are uncomfortable taking this role; but we can learn from those who do, whether we agree or disagree with their positions.
I strongly disagree that his blog is an “open forum” for comments. Just go there and try to post literally anything critical of Blaine and his “logic”, and see how quickly it DOESN’T get posted.
You have a strong point, E.C. I used to live in N.C. and have friends who are members and attempted to post their comments on the site. Some agreed with Blaine, but most did not. Only the favorable comments were posted. The others were censored and never shown. While Blaine was fully within his right to express his opinion as a member, the vitriol that he expressed on his “open forum” was entirely unprofessional. It was not an open forum at all.