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CU limits directors to four terms
PORTLAND, Ore. (4/26/11)--Unitus Community CU has implemented board term limits in an effort to increase member engagement. In its first meeting after the rule change, the credit union welcomed two new members to its board. Jim Lewis and Scott Thompson were elected to the board as board members Pete Reinecker and Barbara Leonard stepped down. Unitus Community CU board members are limited to four, three-year terms, or 12 consecutive years on the board. The decision to implement term limits--a controversial topic for many credit union boards--was part of a long process, according Unitus Community CU Pat Smith Northwest Credit Union Association Anthem April 14). The process began about four years ago when the board created a succession planning chart to document each director’s future plans, she said. “After a couple of years, we realized that we had no hard plans and that dates continued to be either ambiguous or were being updated to a new date each year,” Smith said. The topic of board limits was floated by the board’s chair, Gordon Akeson, who was among the board members considering retirement. The governance committee followed up by researching the pros and cons and the different elements associated with limits for board members. After 18 months of research, review, and discussion, the committee presented the various options and selected those that fit best with Unitus Community CU. The major benefit is the possibility of engaging more members in the governance process, said Smith, who points out that engagement is one of the foundational differences between banks and credit unions. Also, the board has reduced the ambiguity of its succession planning efforts and created a mechanism for new ideas. At the same time, term limits create some concerns, according to the Northwest Credit Union Association. Many long-time board members bring expertise, stability and continuity to the governance process. Learning the cooperative financial model takes time, and too much turnover can create a knowledge gap. With the current pace of regulatory change, educating a new board member is a challenge, observers say. However Laurie Kresl, vice president of planning and business development at Unitus Community CU, said Smith and Akeson, who has since retired, worked to educate the board throughout the process and ensure that a “pipeline” was developed to attract and develop new board members. Kresl said part of the term limits discussion was developing a more formal board application process that identifies candidates and competencies and board development with existing volunteers. “The board understood our needs,” Kresl said. “I think they understood if they loved they loved the credit union it was right thing to do. They owed it to the credit union to put someone in place to lead us into the future.”


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