Recently the Canadian population went to the polls again for thethird time in five years.

While this isn't meant to be a political article, in Canada, wecould have the same prime minister effectively forever, while theU.S. political system allows for a maximum of eight years. Thisleads me to the recent news that Unitus Community Credit Union of Portland, Ore., set termlimits for board members.

Bent on nurturing greater member involvement in its growth,Unitus Community will limit directors to four three-year terms–or atotal of 12 years on the board.

The $836 million CU said the new procedure drafted “in amethodical and deliberate process well received by the members ofthe board” took formal effect last month at the CU's annualmeeting, at which two incumbents agreed to retire.

“Following discussion we've had with our directors, led by ourCEO Pat Smith, starting back at least four years ago, we realizedthat given the new regulatory scrutiny, we needed to make sure wehad a pipeline to the membership to bring on new ideas,” saidLaurie Kresl, vice president of planning/business development.

In an online article published by the Northwest Credit UnionAssociation, Smith said term limits remain “one of the mostdifficult topics for a credit union board and management.” Sheadded, “At the very least, having the conversation is an importantplace to figure what is best for each individual credit union.”

I thought that this was very forward thinking for a creditunion, but I wanted to get some additional opinions, so I posed thequestion to a member of our executive leadership team. Currentlyour credit union does not have a restriction on the maximum amountof years. As a good leader does, he challenged me to think on thereasons why it is beneficial to have unlimited terms. The easyanswer for me was a “lame duck” director, in which it is quitepossible that as the director gets closer to the completion oftheir term, he or she will choose not to effect change and coast tothe finish line.

Two areas that I had not considered were continuity of thinkingand governance competencies.

Having limited terms could cause change in the philosophy of thecredit union. Change is constant in the financial servicesindustry, and changing the direction based on the continuedaddition of new directors could impact not only your staff but alsoyour membership. Having minimal change to the turnover of yourboard could potentially bring fewer new ideas to your credit union,but could also ensure that the vision and mission stay on the pathdetermined by the existing group.

As for competencies, it is more and more common that creditunions are investing in continued education for their board ofdirectors, no different than investing funds into education forstaff. The learning curve can be quite steep and intensive with asubstantial cost to the credit union. Just like providing thisbenefit to employees, a credit union does not want to see itsinvestment walk out the door without receiving a significantreturn.

I posed an informal poll to the National Young Leaders CommitteeOnline Community, a credit union young leader group from Canada,and the Crash Network, a credit union young leader group from theUnited States. Of the 21 responders from Canada, nine credit unionshad no cap and 12 had a cap, although I would put a Barry Bondsasterisk on the cap because nine of the 12 credit unions had “soft”caps, which allowed for their directors to reapply to join theboard after one year of absence following a maximum term (typicallyeither 9 or 12 years). From the 17 Crash responders, 15 creditunions had no cap, while two had soft caps.

While I appreciate that the amount of responders is limited tothe North American credit union system, it does bring someintriguing results in that we are opposite to one another. Why isthat? Unfortunately, I have no idea, so I'll leave some reallysmart people at Filene to answer that one.

So what is the right answer?

Simple. There isn't one.

Each credit union is going to use a model that best suits itscurrent strategic plan. For Unitus, it wanted to go in a newdirection by infusing new enthusiasm into its membership. I applaudthat. For others, ensuring that the human and intellectual capitalprovided by the existing board stays within their credit union willensure that their credit union philosophy stays intact. 

Devin Selte is a senior relationship manager at Servus CreditUnion, Lloydminster, Alberta.
Contact 780-808-4780 or [email protected]

The Crash Network is a grassroots organization of more than160 young credit union professionals. Its activities includemeetings, mentorships online collaboration and developmentprojects. Opinions expressed are the personal views of theauthor.