Credit Union Good Governance: To pay or not to pay

Deciding whether to compensate credit union and CUSO directors is a hard question

There’s been a lot of buzz recently about whether credit union board members should be compensated. For a long time, this notion was taboo. For many, it literally seemed to go against the very essence of a cooperative credit union.

Then the idea of compensation seemed to shift from being taboo to being merely uncommon. Though federal credit unions can provide compensation  only to one member of their board, usually the treasurer, some state-chartered credit unions may compensate more broadly.

A recent study published by Filene Research Institute (and underwritten by Quantum Governance and CUES, among others) notes that there has been a new and significant shift, with many beginning to support the notion of paying their boards, “with some even believing that doing so would soon be crucial to their ability to attract and retain effective board members.”

The study, aptly titled Should Credit Unions Pay Their Directors?, goes on to report that “At 145 credit unions in 12 states, directors earn somewhere between $60 and $37,597 annually.” The report’s author, Matt Fullbrook, manager of the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto’s Rotman School of Management shares that while “In most states, credit union director compensation is dwarfed by fees paid to directors of commercial banks …the pay trend is slowly catching on, especially among large credit unions.”

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