Ethical actors, community service providers, correct priorities, sense of fairness, a conscience. A recently released study performed by the Public Affairs Council with the support of Princeton Survey Research Associates International shows that these are the traits that the public feels are important and expect from business. What is amazing is that these are the qualities that credit unions have promoted and practiced for generations. Much of what this study illuminates is that the values and principles that are fundamental parts of credit union DNA are fully in-line with what the average consumer wants.
The challenge for us is to continually promote the credit union “brand” and educate consumers on the value of credit union membership. After the financial upheaval of 2008, credit unions received an organic bump in brand awareness as bank’s dirty laundry was being aired publicly and credit unions were a natural alternative for providing services. As an industry we were able to capitalize on this situation with good success and membership increased.
In a recent blog post, Public Affairs Council President Doug Pinkham highlights some of the study’s major findings. Below are excerpts from this post with my analysis on how they relate to credit unions.
Companies as Ethical Actors – More than eight out of 10 people say it’s very important that companies make sure their employees behave ethically. This is especially important since more than 40 percent think corporate CEOs have low ethical standards. A reputation for integrity is pretty much non-negotiable. – Pinkham
Credit Unions have always had an impeccable record for ethical standards and practices. Look at the 2008 financial crisis and, save a few bad actors, credit unions came through relatively unscathed from a reputation standpoint – certainly when compared to the bankers.
Companies as Community Service Providers – In many cases, corporate responsibility programs have become “table stakes” rather than opportunities to differentiate a firm from competitors. Public support remains strong for corporate philanthropy, volunteerism and, in general, companies taking a leadership role in helping the world in ways that go beyond operating a business. At least 85 percent believe these steps are somewhat or very important. Yet only 42 percent believe big companies are doing a good job of contributing time and money to support their local communities.
Expectations couldn’t be much higher. At a time when governments often don’t have the resources to tackle tough national problems, many Americans expect private businesses to take on more financial responsibility for health care (66%), community services (65%), education (63%) and disaster relief (56%). – Pinkham
Credit unions are created and owned by the communities they serve. In some ways, just their existence is a community service. Along with organizations such as the National Credit Union Foundation leading the way, credit unions are at the forefront of community engagement.
Companies With Their Priorities Straight – Corporate slogans often talk about “putting customers first,” but many customers don’t feel high on anyone’s priority list. Only 6 percent say major companies put customers’ interests first, while 49 percent say firms put the interests of stockholders first. Interestingly, one-third of respondents say the needs of top executives get the most attention from major companies. While the percentage assuming firms exist to help their own executives is down 10 percentage points from last year, it is still remarkably high — and it is another indication of the lack of trust in corporate leadership. – Pinkham
Again, our cooperative, member-owned model drives a service, member-driven focus. Without stockholders, such as in the bank model, credit unions direct service model reigns supreme.
Companies With a Conscience – Because corporations have so many different stakeholders, they often struggle when they get involved in social issues. Taking a stand on a mainstream issue such as ending racial discrimination won’t be controversial, but it also won’t draw much positive attention. On the other hand, stepping into public debates over immigration or gay marriage may drag companies unwillingly into the culture wars. – Pinkham
While credit unions, as an industry, do not generally engage in social issues, our battle for “the little guy” and Americans who are unserved or underserved by the financial services industry is part of our bedrock. Credit unions engage where the banks and other service providers are lacking or even taking advantage of the underserved.
Companies With a Sense of Fairness – It’s hard to know what people mean when they use words like “justice” and “fairness.” Yet corporations face severe criticism when they act in a way that doesn’t seem evenhanded to many Americans.
Where does the public’s sense of fairness play out? It shows up strongly in the issue of executive compensation. Only one out of four people think major companies do a good job of paying top executives fairly, without overpaying them. This is probably one reason why so many Americans question the honesty and ethical standards of senior management.
In addition, only 37 percent say companies do a good job of paying their regular employees fairly. Not surprisingly, these rank-and-file employees are considered to have much higher ethical standards than their bosses.
This is not to say that companies need to pay everyone the same salary. But they had better be able to defend their compensation practices, particularly as they relate to executive bonuses. Previous Pulse surveys have shown that the public disapproves of high corporate bonuses — particularly if they are awarded when a firm has not performed well. – Pinkham
From the top down, with our volunteer boards to the relatively meager salaries of many credit union executives, any credit union member or outsider can see that running a credit union is as much of a mission or calling as it is a job. I have known a vast array of credit union leaders from around the world representing institutions large and small. From the CEO of Navy Federal to volunteers running a credit union out of a tent in Haiti, there is a dedication to the movement. The credit union ethos and adherence to the cooperative principles bleeds through in all that we do. Not for profit but for service!
My friends, take a moment to review the findings in this study. Then, take another moment to reflect on the fact, that as a credit union representative, every day you embody what America wants and what America needs. The principles by which you operate are being sought out by consumers, and it is imperative, that we keep our heads high and our voices loud as we spread the good news.