Compensating credit union board members–It's an idea whose time has come! This is another example of a much-needed modernization to ensure credit unions remain viable financial institutions. Paul Gentile was absolutely right when he said in his August 8, 2007 column, "It's all about the members, not the volunteers."
Compensating board members will help to ensure credit union boards are well balanced professionally and demographically to reflect the members they serve. The increased competition to fill vacant board seats will give credit unions the broadest and best selection of available talent. As an industry or as a movement–take your pick–we need the most qualified, and they may not always be the most available. We need to establish added motivation for new board members; motivation that will bring a variety of skills to our industry to better ensure its continued growth, profitability and expanded member services.
Credit unions no longer run plain vanilla operations. Board members with expertise in investment services, insurance, mortgages, commercial lending, marketing and accounting will prove beneficial when developing future strategic plans. The expanded products and services credit unions now offer are the result of market forces and member demands. If we're to protect the credit union value proposition for future generations, we must protect its maturity today.
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Tying board member compensation to term limits is a key relationship which needs to be explored. Term limits will create a pipeline of members with new perspectives that will have an opportunity to join a credit union's board. Credit union board members do more than compliance monitoring. There is a substantive value that board members add to the overall success of the credit union. Board members set the tone for the direction of the credit union; it influences culture; and is responsible for strategic development. The governance provided by credit union board members ultimately impacts member service levels and organizational excellence.
Credit union board members give much of their time attending to the credit union's business; missing work in their daytime jobs often necessitates working more days and longer hours. The hard work associated with being a credit union board member makes the job unattractive in the face of competing alternatives.
Compensating credit union board members will go a long way in piquing the interest of qualified individuals, who might otherwise not be inclined to fill a vacant credit union board seat. Compensating board members will also underscore the importance and seriousness of being a member of a credit union board.
In the end, it's not about compensating board members–it's about recognizing the role of those challenged with adding value to the institution, for its members. And it's about time…
Mark Hawkins
CEO
Altura Credit Union
Riverside, Calif.
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