Most credit union boards operate for years without having to take some extraordinary action. Most board actions occur with established regimen and with little trauma.

However, if your credit union is like ours, your board, and maybe your management are not ready for an unusual event: the removal of a supervisory committee member by a vote of the membership; in our case, two members of the supervisory committee.

While the bylaws provide for the process of removal of a member of the supervisory committee, there have not been sufficient occurrences to develop a body of knowledge, or practices to follow; at least that we, our examiner or our counsel could find.

Here are some lessons we learned:

1. Get your examiner and counsel involved early. The bylaws are unclear as to what constitutes sufficient cause for a request for suspension by the board.

2. The next step is not covered in bylaws: What is the scope of the investigation? The investigative arm of most credit unions is the supervisory committee.

3. The board needs to set the areas that are serious enough for suspension. In our case, the matter went to the core of the committee's function.

4. Typically, when a volunteer is under investigation a resignation usually follows. However, if you have a member who refuses to resign, the board must proceed with the formal process.

5. The next step is the board's vote on the suspension following the review of the investigation.

6. A special membership meeting is then held, as required under the bylaws. The logistics take up time and money. Here are a few things to remember:

–the purpose of the meeting is to conduct a vote to remove or retain the suspended committee member(s);

–the suspended members are allowed some degree of due process while keeping their statements on point;

–the credit union members in attendance have a right to question the suspended member(s);

–everything, from the member notices, to the ballots, need to be reviewed and checked by counsel, no one can afford a procedural error;

–use of outside firms for member credential verification, ballot control and counting, and physical security are essential;

–script out the meeting, and have it reviewed and the members who have to vote need to be educated.

7. The special meeting agenda and the conduct of the meeting should have the following elements: meeting purpose, a review of the roles of the board, supervisory committee and management in order to educate the members. We had several members who thought that the CEO had suspended the member(s), and were upset.

Other elements are a summary of the suspension process by the board and statements by the suspended member(s). A difficult issue arises if they bring up the matter that was confidential and precipitated the suspension.

The meeting's agenda should also address membership questions. Attempts to keep the questions relevant to the issue can come across as too controlling, or not allowing freedom of speech.

Finally, a summation of the case by the board and conduct of the vote – keep it simple, direct, and done by an independent third party. Announce the results of the vote and adjourn the meeting.

8. Be prepared for irate members, members who think employees and board members do not have a right to vote and suspended member(s) who stray from the specific issues.

Also, be prepared for members who want to use the forum for personal political statements ex-employees or otherwise disgruntled members who want a public forum to air their grievances against the credit union.

9. Balancing the rights of the members to ask questions and maintain a relevant forum regarding the issue.

As I said, some elements of this event are clear, and others have no guidance at all. With good fortune, you will not have to go through what we went through but I believe we are better off now for having done it. We identified things that need improvement, and we maintained the concept the fundamental responsibilities of the supervisory committee.

Tony Steigelman is chairman of CBC FCU in Oxnard, Calif. He can be reached at 805-312-5251 or [email protected].