Executive Summary
This governance report, the first in a series of three, encourages directors and leaders of credit unions to lay more than threadbare clichés at the altar of good governance. Through a comprehensive comparison of corporate and credit union governance, it seeks to separate the received wisdom from the effective reality of modern credit union leadership.
What is the research about?
This report casts a wide net to offer critiques of annual meetings, CEO compensation, antidemocratic board renewal policies, hostile mergers, and board perks, all in the service of separating credit union rhetoric from credit union reality. The author of this report draws on an exhaustive literature review and decades of firsthand experience to frame each chapter with helpful conclusions, recommendations for credit union boards, and hypotheses that, while not proven, are excellent conversation points for improving governance.
What are the credit union implications?
As the responsibilities and expectations of boards change to match an evermore-complex marketplace, individual directors have to keep up. Seventy-five years ago—even 40 years ago—it was the credit union or nothing for many consumers. But today, it is the credit union or a national bank or a regional bank or a community bank or another credit union. Democratic credit union participation is rarely required, and therefore rarely practiced in a world where consumers vote with their feet. And as that participation continues to dissipate, and “ownership” slips into the theoretical, credit union directors have to remake themselves for the needs of the day.