Embrace Election Guidelines

Sometimes it makes sense to do just enough to comply with a regulation. But doing a little more than required—and with the right attitude—may be really beneficial to credit unions when it comes to following the board election provisions in the National Credit Union Administration’s standard federal credit union bylaws, suggests attorney Andrew Keeney, a partner in the Kaufman & Canoles PC law firm, in Norfolk, Va.

According to Keeney, doing more than what’s required for getting board candidates can set the stage for a credit union’s membership to elect new, and potentially young, directors to the board.

Keeney says the standard federal credit union bylaws, used by most federally insured institutions including those with a state charter, provide three ways for credit unions to put candidates on the board ballot. Depending on the election provisions implemented by the credit union, it could 1) appoint a nominating committee to create a slate of candidates, 2) offer members the option to petition for a place on the board ballot, or 3) accept nominations from the floor during the annual meeting.

“The vote will count when the nominating committee takes the approach that its job is to give the voting membership more of a choice in candidates—not just put incumbents on the slate,” Keeney says.

Many times in the past, nominating committees have put just enough candidates on the ballot (and only incumbents) to fill the available slots. This promotes directors getting re-elected by acclamation and does away with the need for an election. Having a nominating committee with a different mindset can help change up the board, and bring in fresh ideas for the institution, Keeney suggests.

“The nominating committee can make an election actually take place by putting more candidates on its slate than there are open slots,” he notes. “Having an election can be time consuming and costs money, but can be well worth the effort in terms of the health of the organization.”

Similarly, truly encouraging members to nominate themselves by petition can expand the candidates members get to consider, and boost the opportunity for young people to get elected.

The minimum notification requirement for nomination by petition is sending written notification to all members eligible to vote. Some CUs may also place a notice in every branch. But “how many people go look at the bulletin board when they come in to cash a check?” he asks. “You can give the minimum notice, or you can make the most of it and put it on your website, social media pages, periodic statements, and talk it up at the teller line.”

Following election guidelines enthusiastically boosts the management team’s credibility, not only with candidates and potential candidates but with new board members as well. “If there are no potholes and an election is all smooth sailing, management looks fine with the board and with new board members,” Keeney says.

On the other hand, he cites the story of a credit union that didn’t do a good job of calendaring the timing for collecting nominations by petition, and ultimately had to push out the date for its annual meeting. “This caused a lot of consternation.”

If the nominating committee and those in charge of a board election for a credit union decide to cast a wider net for board candidates through these methods, “they can significantly help the future of the credit union,” Keeney says, noting that NCUA began a review of the standard form bylaws in 2012 and expanded its review in 2013. “Who knows if they’re going to streamline the election process?” Keeney says. Stay tuned.

Lisa Hochgraf is a CUES senior editor.