Conference 7.286::dcu

    I'm also a board member for several boards.  I disagree with assertions
    that there should never be secrecy and that dissenting board members
    should always publicly voice their concerns.
    
    One of the boards I serve on is for my church.  One of our
    responsibilities involves determining whether or not members of our
    church who are alleged to have violated the rules of the church will be
    allowed to retain their memberships.  Though the results of such
    meetings are made public, the details of what was said and done in the
    meeting are kept secret.  Notes are destroyed.  This is because we are
    dealing with information that is confidential and personal.  It would
    be utterly inappropriate for such information to be made public as it
    would violate the rights of the individuals involved.  
    
    Another board I serve on has to make political plans and set strategy
    during elections.  Obviously, if the information was revealed to the
    opposing parties our plans could be foiled and the desires of party
    members that we represent would be frustrated.  There are times when the 
    information presented to a board should be kept confidential.
    
    Another board that I serve on involves the running of a local
    orchestra.  We have to make decisions regarding how the money will be
    spent.  We have to act as one unit, though we may disagree as we
    discuss different aspects of a decision.  But, we depend almost
    entirely upon the generosity of the public in contributing to our
    orchestra and supporting our performances.  If any of us were to come
    out and speak against the board or the orchestra we would probably see
    our contributions drop and threaten the survival of the orchestra as a
    community service.  There are times when differences need to be put
    aside so that the organization does not suffer because of public
    perception issues.
    
    So, the real question is, should the BoD of the DCU reveal everything
    they know?  Should board members be speaking out against the board?
    I don't think so.  They can't reveal personal details they might know
    about individuals from participation on the board.  They should support
    decisions of the board once decisions are made.  They can't be faulted
    for this.
    
    In the case of the DCU, however, disagreements about policies during
    board meetings are supposed to be recorded for later inspection.  There
    is a provision, as I recall, for striking from the record any
    information that would be of a personal nature and improper to
    document.  But, for the most part the board is supposed to keep a
    record that they can show to whomever they are accountable to.  And,
    who are they accountable to?  The shareholders.  If they doing what
    they are supposed to do, I fail to understand why it is that the
    minutes of board meetings cannot be inspected by concerned
    shareholders.  
    
    So, even though I feel that some things should be kept secret and that
    board members should act in concert, I also believe that there are
    times when a board should take steps to prove its accountability. 
    There are times when hiding behind the need to act as one body or the
    need to keep confidences are inappropriate excuses for failure to prove
    accountability.
    
    Steve

George Bush, and Ronald Reagan before him, have always made a point of
insisting that their subordinates be "loyal".  One of the things that
loyalty means to them is that the subordinates never disagree with the
boss in public.  So, when the President has made up his mind what to do,
it's the job of the subordinates to not only carry it out, but to say
that they think the same way (or else say nothing).

Whatever one may think of that style of managing subordinates, it is
clear that it doesn't apply to an elected committee such as the DCU Board
of Directors.  In such a committee, no one is subordinate to anyone else.
Even the chairman, if I understand it correctly, does not have authority
over the Board members, but only over the conduct of their meetings.

One might argue that, although there is no boss in a committee to whom the 
members ought to be "loyal", they should apply the same sort of loyalty
to the committee as an organization.  The fatal flaw of that reasoning
is that it assumes that the individual board members are accountable to
the board itself.  They are not.  All elected officials are accountable
to their electorate, not to the organization into which they are elected.

Alas, it's a common failing of legislatures and elected committees to 
think in terms of their organization rather than in terms of those they
represent.  I think this is one of the main reasons behind the Mass.
"open meeting law", which requires public access to the deliberations of
elected officials.  It helps to reduce the occurance of back-room deals
and hidden agendas when debates must be carried out in the hearing of
the real bosses, namely, the electorate.  The open meeting law can be
a pain, but like democracy itself, all of the alternatives are worse.

Therefore, I would like to have a BoD that consists of members who feel
that their #1 priority is to be accountable to the members.  I'd like the
Board meetings (and their minutes) to be accessible to ordinary members,
excepting only the occasional item that cannot legally be revealed or
that might damage the DCU (as opposed to any particular DCU officer)
by being revealed.  If most of what the BoD discusses is policy, then
that restriction should not apply very often.  I'd like the Board to take
the attitude (and write it into the bylaws) that all DCU members have a
right to know about how their credit union is being run.  

In short, I'd like the DCU to be run as a cooperative, which is owned by
the membership, managed by paid professionals, and overseen by a Board of
Directors who hold themselves accountable to the entire membership for
the quality and integrity of their stewardship.

	Enjoy,
	Larry

    
    RE:  .2
    
    Perfectly stated!  It would make a perfect preamble to the DCU Bylaws.

    Yeah.  I like it, too.  The point about being responsible to the
    electorate is often forgotten.  I take it as granted that board members
    should always be asking themselves how it is that they can best serve
    the interests of those they represent.  The impression that I have had
    in my contact with the DCU Board has been that the relationship is
    adversarial.
    
    Steve

    Re .1:
    
>   I'm also a board member for several boards.  I disagree with assertions
>   that there should never be secrecy and that dissenting board members
>   should always publicly voice their concerns.
    
    We're probably in violent agreement, but it looks as though we're still
    working out how to say what we mean.  I believe that there's a BIG
    difference between SECRECY (which the DCU BoD has been practicing of
    late) and CONFIDENTIALITY.
    
    I think we agree that DCU members (even including its officers and BoD)
    have a right of privacy regarding their personal affairs.  That falls
    within the realm of "confidentiality".
    
    Much of the rest of the BoD's deliberations, though, would NOT.  If
    there was lively debate at some point over the DCU's decision to
    participate in the infamous BCU loans (either at the outset or later,
    after the NCUA had reclassified them from "investments" to "commercial
    real estate loans"), the DCU membership is entitled to know about it
    (including who took what position).
    
    Many states have "Sunshine Laws", which are intended to prevent
    government bodies at all levels from operating in secret.  Except for
    SPECIFIC types of information that must be held in confidence (and
    which usually also fall under federal or state privacy acts), all
    meetings of such bodies must be OPEN.  Sadly, the DCU Bylaws contain no
    such provision.

	There presently presently exists a situation where a significant
	number of DCU members are sufficiently dissatisfied that they
	have succeeded in forcing the DCU to hold a special meeting.

	There are a number of costs to the DCU associated with this:

		o Rental of a meeting hall

		o Printing, postage and mailing costs of notices to the 
		  membership

		o Time spent by DCU employees preparing for the 
		  meeting (renting hall, other preparations)

		o Time spent by DCU employees answering questions
		  pertaining to the meeting

	Also, I expect that there has been some expense in consultations
	with legal counsel with regard to the meeting. 

	These expenses are borne by the DCU membership.

	I hold that under a competent board, such a meeting, and 
	the associated expenses, would not occur.


						Tom_K
	

�    after the NCUA had reclassified them from "investments" to "commercial
�    real estate loans"), 
    
    When did this happen?  I know Phil has classified them as such, but I
    didn't know he was on the NCUA.

    Re .7:
                                                               
> � after the NCUA had reclassified them from "investments" to "commercial
> � real estate loans"), 
>    
>   When did this happen?  I know Phil has classified them as such, but I
>   didn't know he was on the NCUA.
    
    DCU financial statements for 1985-1987 list them as "Participation
    Loans with Other CU" and for 1988-1990 list them as "Commercial Real
    Estate Loans".  The explanation given at the first "informal meeting"
    was that the NCUA had directed the DCU to reclassify them this way.
    
    I've seen no evidence that the DCU BoD "took the hint" and either
    decreased or reconsidered its participation in commercial real estate
    loans to non-members of DCU (especially in light of the crumbling of
    the "Massachusetts Miracle" as the decade drew to a close).

>              <<< Note 336.7 by CNTROL::MACNEAL "ruck `n' roll" >>>
>
>�    after the NCUA had reclassified them from "investments" to "commercial
>�    real estate loans"), 
>    
>    When did this happen?  I know Phil has classified them as such, but I
>    didn't know he was on the NCUA.

    If DCU and the BoD would have released copies of the auditors notes as
    they had been requested to do over 2 months ago, you could have seen
    this for yourself.  I happen to be the only person lucky (?) enough to
    sneak into DCU HQ (on my vacation time) and see these before the 
    BoD-PP was implemented.
    
    See what you're missing by not having the notes in your annual
    report.  I recommend you send mail to the BoD asking to read them
    yourself and then take vacation time to go to DCU HQ.  Wouldn't want
    all this highly confidential (pronounced em-bar-ras-sing) information
    falling into the hands of dumb members... ;-)