“Following discussion we've had with our directors, led by our CEO Pat Smith, starting back at least four years ago, we realized that given the new regulatory scrutiny, we needed to make sure we had a pipeline to the membership to bring on new ideas,” said Laurie Kresl, vice president of planning/business development.

In an online article published by the Northwest Credit Union Association, Smith said term limits remain “one of the most difficult topics for a credit union board and management.” She added, “At the very least, having the conversation is an important place to figure what is best for each individual credit union.”

I thought that this was very forward thinking for a credit union, but I wanted to get some additional opinions, so I posed the question to a member of our executive leadership team. Currently our credit union does not have a restriction on the maximum amount of years. As a good leader does, he challenged me to think on the reasons why it is beneficial to have unlimited terms. The easy answer for me was a “lame duck” director, in which it is quite possible that as the director gets closer to the completion of their term, he or she will choose not to effect change and coast to the finish line.

Two areas that I had not considered were continuity of thinking and governance competencies.

Having limited terms could cause change in the philosophy of the credit union. Change is constant in the financial services industry, and changing the direction based on the continued addition of new directors could impact not only your staff but also your membership. Having minimal change to the turnover of your board could potentially bring fewer new ideas to your credit union, but could also ensure that the vision and mission stay on the path determined by the existing group.

As for competencies, it is more and more common that credit unions are investing in continued education for their board of directors, no different than investing funds into education for staff. The learning curve can be quite steep and intensive with a substantial cost to the credit union. Just like providing this benefit to employees, a credit union does not want to see its investment walk out the door without receiving a significant return.

I posed an informal poll to the National Young Leaders Committee Online Community, a credit union young leader group from Canada, and the Crash Network, a credit union young leader group from the United States. Of the 21 responders from Canada, nine credit unions had no cap and 12 had a cap, although I would put a Barry Bonds asterisk on the cap because nine of the 12 credit unions had “soft” caps, which allowed for their directors to reapply to join the board after one year of absence following a maximum term (typically either 9 or 12 years). From the 17 Crash responders, 15 credit unions had no cap, while two had soft caps.

While I appreciate that the amount of responders is limited to the North American credit union system, it does bring some intriguing results in that we are opposite to one another. Why is that? Unfortunately, I have no idea, so I'll leave some really smart people at Filene to answer that one.

So what is the right answer?

Simple. There isn't one.

Each credit union is going to use a model that best suits its current strategic plan. For Unitus, it wanted to go in a new direction by infusing new enthusiasm into its membership. I applaud that. For others, ensuring that the human and intellectual capital provided by the existing board stays within their credit union will ensure that their credit union philosophy stays intact. 

Devin Selte is a senior relationship manager at Servus Credit Union, Lloydminster, Alberta.
Contact 780-808-4780 or [email protected]

The Crash Network is a grassroots organization of more than 160 young credit union professionals. Its activities include meetings, mentorships online collaboration and development projects. Opinions expressed are the personal views of the author.