If you tell someone who knows nothing about credit unions that policy is set by unpaid volunteers you may be surprised by the reaction you get. Instead of all those endearing words I mentioned above, you may find people are not exactly confident about putting their money in an institution run by volunteers. The days of cigar box credit unions are over. Today's consumer wants low-fees, convenience, service, and expertise in their financial institution. Unpaid volunteers are not an advantage in the marketplace.

They are also not always a strategic advantage in the boardroom. We all know of credit unions where board members are "hanging on" because they like the perks. Board members get great travel benefits. Look at recent meetings. You have NAFCU in Hawaii and CUNA in Las Vegas. Some board members relish in the travel opportunities their volunteer position provides. But is that the type of director credit unions want to have "hanging on." I can hear some directors writing letters to me now about this blasphemy, but we all know it's true for a segment of board members. And we also know this in no way characterizes all board members. There are so many great ones out there who epitomize the selflessness and dedication of a volunteer and deserve our admiration. But the fact that most people reading this can conjure up an image of a "hanging on" board member tells you something–I am not making this up.

So what will paying directors do for the credit union and its members? Remember it's all about the members, not the volunteers. Paying directors solves many problems. It can immediately boost the number of qualified board candidates. Too many credit unions have trouble attracting a full ballot to run for open seats. It will attract younger directors who can bring a fresh perspective. It will attract professionals skilled in accounting, marketing, real estate, etc. who can bring new knowledge to the board that could dramatically change the way the board sets strategy. It will attract community leaders who can bring deep ties to the market the credit union is serving.

The people I described above are busy. They are working. They have families. It's hard to bring them on the board with the promise of nice trips. Paying directors makes attracting these board members all that much easier. You shouldn't get rich serving on a credit union board (like the board members of the former Community CU did), but you should be compensated. And that compensation should be structured beyond the generous travel policies many credit unions have for directors.

Attracting skilled directors benefits the members. Credit unions are in cutthroat competitive times. They need the best and the brightest employees and management teams. You won't get those people if you are not willing to pay. The same goes for the boardroom.

Attracting this new kind of director may also help the CEO. Too many CEOs like having rubber stamp boards, or they waste a lot of time making sure their board members are happy. There are CEOs out there who are grossly underpaid because the board is made up of retired workers from the former original sponsor who don't believe anyone should make as much as a top credit union CEO should. Attracting directors who are successful in their own lives means the high-performing CEO will have a board that understands the importance of compensating a CEO who is leading the credit union to success.

I think paid board members could also help with the growing trend of credit unions converting to banks. While no converting credit union has come out and said that greed on behalf of the board was the reason for converting, I think it's played a factor in too many conversions. Is it that boards are getting a sense of entitlement that they deserve something after all their years of "volunteer" service? Hopefully not, but offering modest compensation for board service could combat that.

Some will say paying board members makes credit unions more like banks. No. Credit unions are still owned by their members and exist for their members. Credit unions still operate in a much more restrictive regulatory structure.

At one time credit unions didn't offer share draft accounts, credit cards, or mortgages. Should credit unions have not evolved there as well for fear of looking like banks?

The time has come for credit unions to modernize the boardroom. It is in the members' best interests.

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