Built-in Impediments for Director Representation on National Trade Association Boards

I believe that there are many reasons why – and many impediments that act to disenfranchise volunteer credit union board members from serving on national boards and councils. As one who has recently served on one national council and the University of Wisconsin Credit Union board for 34 years, and has broad experience in the credit union movement as a whole, I think the following observations are valid. Here’s my “Top Ten” reasons why volunteer directors are not elected to national boards and councils-regardless of their interest, qualifications, or desire to serve: 1. Volunteer directors are not generally well known in the movement, and often when known-it is likely for the wrong reason. 2. Contrary to some current chat, there is little community among directors on many boards, and even less with directors from other credit unions. There is not an “old boy” network of credit union directors. 3. Sitting on a national board or council brings a significant amount of recognition that is likely to be pursued by CEOs and management-often with little or no notification of the possibility that a volunteer director within the credit union may also be eligible to serve. 4. Only a minority of directors are interested and can give the requisite time to effectively serve on a national board or council, but many CEOs regard service at this level to be of both great interest and benefit to career enhancement. 5. The difficulty (or near impossibility) of service at the national level forces interested volunteer directors to do other things, e.g., trips to weekend programs, “director” conferences, and attendance at national meetings where they can look up at the CEO directors running the meetings. 6. From general observation, many CEOs don’t see their board members as true credit union professionals; the CEOs see themselves as these professionals and the movement’s “keepers of the flame.” 7. The election process for seats on national boards and councils is controlled by the CEOs that tend to perpetuate CEO organizational governance. 8. Many CEOs and management simply look down on their board members, put up with them grudgingly, and are not about to endorse them for any activity beyond their role in the credit union. The best CEOs, however, are interested in a quality board and investing in director development. 9. Fair competition between CEOs and volunteer directors for seats on national boards and councils would create an issue on who controls the movement and how the perks are divvied up. I doubt that CEOs would ever want a “level playing field.” 10. A volunteer director who makes it through and wins a national seat has high standing in the movement and could be perceived as a threat to CEOs and other movement “professionals.” My own experience can be instructive. As an educational credit union, we belong to the national Education Credit Union Council (founded in 1972). The initial nine council directors were CEOs of educational credit unions. While directors were eligible for council board membership from the beginning, it was 18 years, and cycling in and out of 34 CEO council directors, before a volunteer director was elected to the board-and this was only after repeated attempts at the open business session of the council’s annual meeting. I was the third volunteer director elected to the council board in 1996, served two three-year terms, and was President in 2000-2001. (You might regard this as a true success story if you didn’t know that my credit union management had previously encouraged me to run and I lost in 1979 and 1981 and had given up hope of serving on the council board of an organization I truly loved.) When I was elected to the council board, I had attended 22 -and as of today, 30 -successive ECUC annual meetings. In 1995, I was surprised and thrilled to be called by the nominating committee chair and told that, with my permission, I would be placed on the ballot for the fall election that was tantamount to victory since the alternative nomination process was difficult. So, buoyed up by my ultimate success in winning a seat on the ECUC board, I ran for the CUNA board from our district. I was endorsed by two well-regarded credit unions in Madison. But in the election (against two CEOs), of the 30 votes cast, I received only three! (A short time after the election, the board chair of one of the other 27 credit unions told me that had their board known about the election or received the ballot, they would have voted for me.) So much for the politics of the credit union movement. To effectively seat volunteer directors on national boards and councils, I recommend that the following be considered: 1. Each national board and council should designate seats that can only be filled by volunteer credit union directors. 2. Election process rules should be loosened (and opened up) to make it easier for a volunteer director to be nominated, and provide an alternative nomination process that guarantees a name will appear on the ballot. 3. A succession plan and recruitment process should be established to ensure turnover and opportunities for new directors for management and volunteer directors. 4. A current registry of volunteer credit union directors willing and able to serve on national boards and councils, including their qualifications and experience, should be established. The “action” position for credit unions today is that of the CEO. While ostensibly volunteer directors have the governance responsibility, management and CEOs, in particular, are a lot closer to the movement and are naturally positioned to take up the leadership roles of our national boards and councils. This shouldn’t mean that able and qualified volunteer directors should be shut out from boards and councils at the national level. Phillip J. Hellmuth Director UW Credit Union Madison, Wis.