The issue is particularly poignant for credit unions. The volunteer boards of credit unions are just as responsible for the decisions they make as the boards of for-profit companies-yet credit union boards are not paid.
The argument is decades old regarding whether or not to pay credit union board members. On one side, potentially solid board members claiming they don't have the time might suddenly find it. On the other is that volunteerism is part of the defining philosophy of the credit union system.
Sticking to credit unions' knitting has been part of what has kept them safe and sound and trusted institutions for their members. It has been one of the arguments for maintaining the tax-exempt status. It's a marketing tool for some credit unions. I think paying board members is a consideration to be kept in mind but in the recesses.
Other options exist before turning to payment for services rendered. Particularly in times of upheaval, the best and brightest of the credit union volunteers will rise to the top, while those that hang on for the status or free trips will also become apparent. As credit union travel budgets have received machete treatment, the focus will turn more toward educational value of the conferences attended as well as online educational opportunities. The perk will be a pat on the back for a job well done. Oh yeah, and a safer and stronger credit union on solid footing for tomorrow when the storm clouds break.
Although not oriented toward volunteers, I think the CUNA CFO Council's ROI tool for its conference is an excellent idea. Not only does it show the credit union the value to be gained, but it also is a unique marketing tool to attract participants. Despite the Vegas location, the council is standing up and clearly stating: this is no junket.
MAC recently announced that it is offering online programming rather than an on-location conference this year. I think in addition to the general economic crisis, they're also the unfortunate victim specifically of marketing budget cutbacks (a bad idea!). In any case, this decision makes the conference even more about the education and less about the travel.
Proper volunteer training is crucial right now. The education is needed to help the credit unions navigate murky waters and also to ensure that board members comprehend the depth of their fiduciary responsibility at a time when various decisions could be called into question. What will be telling will be those board members who had eagerly jumped at the chance to attend training events in Hawaii but balk at an online offering.
My hope is that this scenario will be infrequent. And I want to strongly emphasize that the problem is not about age or time served on the board but passion and true understanding of purpose as a credit union board member.
But as any of us who have stood in a vendor hall booth for more than five minutes knows, there are those attending who wander around picking up trinkets without bothering to find out what the actual product or service is about. And those important, but often not terribly exciting, sessions on crucial subjects like ALM can be sparsely attended.
Credit union executives are in a tight spot in recruiting new board members; after all, they are the ones to determine whether the CEO should report to work tomorrow or not. If Bob, who sleeps through meetings and is unprepared, has served on the board for 20 years with his best friend, who happens to be your chairman, the situation can become an exercise in self-preservation.
However, new board member recruitment is crucial to the continued success of a credit union. Even credit unions with good solid boards can stand some improvement-even if it doesn't mean replacing board members but providing incentive to improve currently seated board members through competition.
Talking with long-time industry executives, most boards do not have open elections. Many are placed because no one else is running against them; this is dead wrong. Credit unions must market their elections better. Simply mailing a ballot with a blurb and photo of candidates, when there are any, is not enough.
Credit unions should be using their e-mail databases to send out notices that elections are coming up. Include some bare minimum qualification requirements for running
and encourage members to apply. Outline what the responsibilities would be, including time estimates, for serving on the board.
This is good for credit unions today to ensure the best possible board members are in place but also to recruit the younger generations for participation in credit union governance. Frequently when credit unions are liquidated or merged out of business, the reason given is lack of volunteers, but how many credit unions are really, honestly trying to recruit them?
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