Letter: Paid Directors Are a Misstep
I have followed with some amusement and interest the recent news about directors of some credit unions receiving director fees.
I have been a credit union volunteer since 1983, serving for many years as chairman of the supervisory committee and then as a member of the board since 1996.
I also have 50-plus years as a director of community banks, with those two responsibilities overlapping and giving my associates in both endeavors lots of opportunity to kid me about the “conflicts” occasioned by such. Fortunately, there were no conflicts of interest as the banks were in one state and the credit union in another separated by over 500 miles.
Paying credit union directors is plain wrong. It will not attract better informed or more responsible individuals who feel good about selflessly serving their fellow members. Instead it will attract some who are motivated by the money. Paying credit union directors simply drives a dagger into the heart of the credit union movement and further serves to weaken and destroy it.
As a director of a for-profit corporation, my obligation is to maximize long-term the stockholder’s investments. As a director of a not-for-profit credit union my responsibility is to protect my fellow member-owners’ financial assets and work toward their financial good health. That is a huge difference. Plus the amount of the director’s compensation will not necessarily serve to attract the most capable people but may be eyed by some simply as a way to enhance their income. I am not aware of any reliable correlation between director’s compensation and beneficial results. Far too often as we see businesses implode, we wonder about how those well-compensated directors could have let it happen.
Evans M. Harrell