Principle #2: Democratic Member Control

I’m finally getting back to talking about the 7 cooperative principles. You can check out my other posts in the series here.

Let’s talk about Democratic Member Control

Cooperatives are democratic organizations owned and controlled by their members, one member one vote, with equal opportunity for participation in setting policies and making decisions.

This principle gets us a better understanding of how this “volunatary, cooperative, not-for-profit organization” is setup. It’s a democracy. (Yahoo for democracy!)

What strikes me about this principle is it’s simplicity. Doesn’t it sound so nice, simple, and peaceful?

Once again, the modern day credit union is far from looking like this simplistic cooperative principle. (Now that I think about it, just about the only place you hear about “one member one vote” actually playing out is in conversion votes.) We elect a Board and they do most of the “participation in setting policies and making decisions.”

I’m not against this kind of representative system, however, in the credit union cooperatvie (as it does in other representative democracies) representation does create a disconnect between “regular members” and “board members.”

In most cases, this disconnect is fair price to pay for each member in return for not having to deal to many of the policies and decisions that have to be made in a fully functioning credit union. However, as evident by stories of board/member clashes and even board members suing members, this disconnect is one that if left unchecked can get really ugly.

Back to You…

What are you thoughts on the current state of credit union democracy? I’d love to hear your thoughts!

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10 comments so far

  1. Robbie Wright on

    I completely agree. I think the bottom line comes down to the fact that most members don’t even know they can control the outcome of their credit union by voting in board elections, or even running for the board. I’d love to see a credit union ran like MyFootballClub. You buy a membership and then the entire member base votes on which team they wanted to buy, then which players they wanted to keep, who else to acquire, and how the club is ran. That’s how CU’s should really deliver on their one member, one vote ideal.

  2. The Credit Union Warrior on

    Sorry…can’t let you get away with this post without pointing out that these “board/member clashes” are rare at best. In fact, outside of some over-publicized mergers there seems to be quite a bit of harmony/contructiveness between the vast majority of credit unions, their boards, and their membership. If 5-10 out of nearly 8,000 credit unions are having such difficulties (again, still no proof there), we’re not talking about a crisis. Instead, we’re talking about grossly infrequent exceptions.

  3. CU Skeptic on

    @Robbie – Nice find on MyFootballClub. This is the direction I’ve been considering for my next “Pie in the Sky” post. 🙂

    @CU Warrior – The big time “clashes” may be rare, but I don’t think you can deny the inherit disconnect of the Board system as it currently operates.

    How your CU chooses to acknowledge and address that disconnect goes a long way to help dictate whether you end up in that dirty 1%, in the dregs of credit union averageness, or named among the cream of the crop.

  4. CU Skeptic on

    Also worth noting: Even if only 5 CU boards are fighting with their members, aren’t there even less than that who are blogging with their members? 😉

    (Props to Ginny Brady and The Boardcast!)

  5. The Credit Union Warrior on

    @cuskeptic Democracies, at the end of the day, are what the voters make them. You can encourage involvement, but you cannot force it. Our goal should be to do a better job on the encouragement side.

  6. CU Skeptic on

    @cu warrior – Well said.

    I should stop here with that, but I really want to ask: If this is really the prevailing attitude, why do so many CU people get so upset when CU members vote to become a bank? (Or even think about voting to become a bank?)

  7. Morriss Partee on

    @CU Skeptic – Great post. I agree- blogging (or any other way to create and encourage dialogue between members and board) seems to be only logical and natural to the credit union way, the principles on which credit unions were founded. Huge props to Ginny Brady, and now also Luis Barros. In the old days, the connection between board and CU members was very clear-both the board and members were employees at the same office, factory, school, or plant. They were all colleagues of each other. Since that is no longer the case for many CUs, online communication would seem the logical replacement/enhancement for the face-to-face interactions.

    @CUWarrior – Glad you brought up the education point. The founders of the United States, knew that education was the key to this crazy democratic experiment succeeding, and we, as a country, have been doing our best to educate our citizens about it for more than 200 years. The same is true for a credit union. The better our members are educated about finances and credit unions, the stronger the movement is.

    The reason why so many people get upset at the member conversion votes to become a bank is that the majority of credit union members are completely oblivious to the operations and dealings of the credit union. Some people who have influence or power take advantage of that fact, and create or schedule votes that are barely publicized. These votes usually happen with a tiny fraction of the total membership. Proponents of conversions try to stack such votes with pro-conversion friends, and hold the meetings at minimally-publicized, inconvenient times and locations. For such folks, the less notoriety, the less educated the membership is, the better for them. In other words, the more they can act against the spirit and principles of the democratic, cooperative credit union movement, the more likely they can convert it to a bank. That’s why pro-credit union people get very upset in such situations.

  8. Gene Blishen on

    As Morriss points out education is the key. Letting members see how a credit union works by active participation of staff, members and board is critical. Our CU has been very active in making members aware of who and what we are. They are very protective of their CU. And they are very thankful and humbled by what we have as compared to other CUs in the world.

    I have said this before. If some notion came about that we were to merge or vote to become a bank and I presented that to the board I would be fired. If that got past the board and to a special meeting I don’t think I would get out of the meeting without some physical injury. So if someone wants to move that notion forward with my sanction I have a choice – loose my job or loose my physical health.

  9. See You Swagger on

    The disconnect is not just between boards and members but between members and their credit unions. I would challenge you each to look at your own credit union and examine first how many members vote in each election relative to your entire membership. Maybe 6%? 8%? participation?
    I would also challenge each of you to review how your nominating committees are sturctured and the number of challengers/encumbants that are a part of each election. Do you as a credit union make it easy for members to vote (electronic & paper options)? Or is your process confusing and not worth the effort. Education doesn’t guarentee that members will actively participate. I think this is where disconnect begins.

  10. […] one vote, Pie in the Sky | It’s already been alluded to in the comments on my post on Democratic Membership, but wouldn’t it be ground breaking to actually give each member a vote…..on […]


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