Dedicated to scrutinizing the governance of our Credit Union, and protecting our

collective wealth from uncooperative self-interest.

Home Topics for Discussion Blog Forum About Me Follow/Contact Me

© 2014-2017. Website last updated June 24, 2017.

Democracy Checklist

About Banking and Credit Unions

Threats

The members of a credit union—just like the members of any other co-operative, and like the shareholders of any regular company—face threats from various self-interested groups:

Competitors are a threat to any business because they want to take the customers for themselves. Coast Capital's paid staff of financial and business professionals are assigned responsibility for dealing with competitive threats and keeping the business successful.

Employees might become a threat if they think more about their career prospects than the interests of the other (non-employee) members. This might happen on any vote among members that affects their workplace situation (such as a vote to convert to a federal credit union). Another type of problem arises if employees are treated badly and then unionize against management.

Senior managerial staff are professional business executives who are interested in personal accomplishment and furthering their own careers. Such self-interest is normal and expected, but it is normally held in check by the oversight of directors. However, directors might also be professional business executives, and their allegiance to their peers might be stronger than their allegiance to the membership because of the greater benefits it provides them. Aligned by the same incentives, senior management and the directors might conduct themselves in a way that's more beneficial to themselves than to the membership.

Governments can be a threat to the well-being of a credit union because they might be influenced by lobbyists and enticed into enacting legislation that favours the interests of chartered banks, or facilitates the types of business deals that favour professional business executives over the interests of co-operative members. The Financial Institutions Commission (FICOM), the provincial regulator agency that oversees credit unions (among others things), is especially vulnerable target to capture by lobbyists because the professionals who work there are conceivably part of the same peer group as credit union directors and managers.

This website is primarily about the threats to Coast Capital members posed by directors and senior management. These threats are addressable through good governance practices. However, we do also depend on government regulatory help, and therefore FICOM.

About Co-operatives      Next: About Coast Capital