Will #FICOMBC support @Vancity Credit Union board entrenchment? #democracy

Today I submitted this letter to the B.C. Financial Institutions Commission (FICOM), with my comments on their draft Governance Guideline for Credit Unions. Main points:

Accountability requires competition in board elections.
=> So boards should not be able to disqualify competitors based on subjective assessments.

Lack of accountability opens the door to corruption.
=> Only competitive elections can prevent favouritism in the use of members' funds.

Board control of information can bias elections.
=> Boards should not be allowed to put their recommendations on board election ballots.
=> Without that, Vancity members would have elected Lisa Barrett instead of Allen Garr.

Please don't let the foxes design the hen house.
=> The public interest should take precedence over lobbying by credit union insiders.

Will next week's B.C. election have any effect on FICOM's final Governance Guideline? Just asking...

Reports on member rebellion @Coast_Capital AGM

At the Coast Capital Savings Credit Union's Annual General Meeting of members on April 30, it was announced that members had voted over 79% to take back control of directors' pay. The board had recommended voting "NO", so members have learned to be skeptical of board recommendations. Two recent write-ups on this:

- Press release from the proponent (Coast Capital Compensation Watch)

- Vancouver Sun article

For background and context:

- My article in the Vancouver Observer: We want our co-ops back

- Posts on Coast Capital in this blog

@MEC slides from #democracy to #oligarchy -- AGM report

Mountain Equipment Corporation Cooperative held its 2013 Annual General Meeting on April 25. Unfortunately, the outreach efforts of us 600 MEC Members for a Democratic Co-op were not enough to counter the MEC board's control of information flowing to members. The board's resolution on rule changes passed by a vote of 91% to 9%. For an overview of how the vote was biased, see my article in the Vancouver Observer: "We want our co-ops back"

So in addition to last year's new power to reject director candidates from standing for election, the board can now reject any member resolution for any reason, without submitting it to member vote. The new rule changes reduce the board's accountability to members in several other ways detailed in my March 14 blog post.

Many members were shocked to see how quickly the board took advantage of its new power by rejecting 2013 director election nominee Anders Ourom. His qualifications include:

• MEC Director (1981-1986, 1988-1992)
• MEC Board Chair (1989-1991)
• President, Climbers' Access Society of B.C. (1995-2004)
• Lawyer, Advising Societies and Co-operatives (1995 - present)
• Legal Advisor, MEC Rules Revision Projects (1997-1998, 2001-2002)

Apparently the board decided that MEC members needed to be benevolently protected from having the option to vote for Anders this year. In the AGM's Reports Q&A section, I stepped up to the mike and asked this question:

"Do you think that the MEC members who voted for the board's rule change resolution last year, understood that you could and would use that power to prevent someone as well qualified as Anders Ourom from running in the board election this year?"

=> Board Chair Bill Gibson replied that yes, he thinks they understood. [I don't have a full transcript of Bill's reply -- MEC does not allow recording by attendees.]

MEC voter turnout dropped 30% in the past year alone, from 30,673 in 2012 to just 21,514 in 2013. Only 0.55% of members voted this year. Among the possible factors causing this decline, we can include:

• lack of open competition in the election -- members can only choose among candidates screened by board and its appointed committee;
• lack of an election candidate forum -- only a constrained one-to-one email process;
• lack of convenient access to independent voter information sources -- a permanent online member forum would help with this.

So in the AGM's last Q&A section, I asked:

"I'd like to ask the board if you have any response to us 600 MEC members who signed this open letter on the website democraticcoop.ca. We are asking for member democracy, including a year-round online member forum. It's good that you created an online forum on this year's resolutions. But the forum only started when voting started, which is too late for adequate discussion."

=> Chief Governance Officer Shona McGlashan replied something like they are reviewing how the resolution forum went, and will consider whether and what kind(s) of online forum(s) to have in future.

We members concerned about MEC's lack of democratic member control (Co-op Principle #2) will continue to reach out to our fellow members who may be unaware of this problem and its consequences.

Stand up for member #democracy: attend AGMs @MEC @Coast_Capital @Vancity

You can help reclaim member democracy by attending these upcoming Annual General Meetings:

Mountain Equipment Co-op (MEC):

Thursday, April 25, 2013
Doors open at 5:30pm
Meeting at 6:00pm
Roundhouse Community Arts & Recreation Centre
181 Roundhouse Mews, Vancouver
Please bring your MEC membership card or 2 pieces of ID

Coast Capital Savings Credit Union:

Tuesday, April 30, 2013
Registration and light refreshments from 4:30pm to 5pm
Meeting begins at 5pm
Executive Airport Plaza Hotel & Conference Centre
7311 Westminster Highway, Richmond, BC

Vancity Credit Union:

Tuesday, May 7, 2013
Registration at 6pm
Meeting at 7pm
Italian Cultural Centre, 3075 Slocan Street, Vancouver

(Vancity director election voting ends April 26. Here's why I'm voting for Williams, Barrett & Yaron.)

Reclaiming member democracy in co-ops and credit unions can be a first step toward making our elected leaders accountable to voters in corporations and democracies too -- see recent Vancouver Observer article "We want out co-ops back."

Oppose biased election ballot @Vancity - vote for Williams, Barrett, Yaron

A dominant majority of the Vancity board are using their control of information flowing to Vancity members, to tighten their grip on power over the credit union. Taking advantage of voters who are too busy to search for other info sources, the controlling group ensures that their recommendations are the only info conveniently available to members. I have documented this in a series of posts since April 2012 -- see votermedia.blogspot.ca/search/label/Vancity

Notably this year, one of the board's "recommended" candidates -- Bob Williams -- is not a member of the controlling majority (details in this report, from page 8). So I plan to vote for him. Challengers to the dominant group can help improve democratic competition and thus accountability to members.

I also plan to vote for Lisa Barrett and Gil Yaron, for the same pro-democracy reasons why I voted for them last year.

Vancity members can vote by Friday April 26, via mail or online.

Co-op #democracy reform movement growing @MEC @Coast_Capital @Vancity

Co-op members are waking up to reclaim their democratic rights.

Mountain Equipment Co-op:

Over 400 500 members of MEC have now signed an open letter "The C is for Cooperative, Not Corporation", protesting the MEC board's misleading labelling of a resolution that would transfer control of director nominations and member resolutions to the board. Members can vote on it until March 28, at mec.ca/election. I recently posted this analysis with voting recommendations -- please vote NO on the board's Resolution #1.

Coast Capital:

In a similar push-back, 438 members of Coast Capital Savings Credit Union (a financial co-op) have signed a petition demanding a vote to reverse a 2007 rule change that allowed their directors to decide their own pay, which has grown rapidly since then -- see the member-organized website Coast Capital Compensation Watch. Members can vote on the resolution from now through April 16, on paper ballots by mail or online at www.coastcapitalsavings.com > Log in > Account Services > Online Voting. (Please vote YES.)

Technology Credit Union:

Last year, the board of California's Tech CU proposed converting it into a mutual savings bank, a move that has been criticized (e.g. here) as enriching directors at members' expense. Fortunately, a campaign to alert members to the downside resulted in their defeating the proposal by a 77% vote.

Vancity Credit Union:

In April 2012, the Vancity board of directors elections were criticized for being undemocratic -- see especially the article's comments. Although other candidates can run for election, the board's recommended candidates are listed first on the ballot, in bold, with the word "recommended" -- my analysis here.

Vancity's 2013 board election is next month.

We Want Our Co-ops Back!:

Last year I wrote a report proposing reforms for these democratic deficits, and emailed it to the boards of MEC and Vancity. But judging from our resulting correspondence, they seem unwilling to restore accountability to members.

So more members are getting concerned about the trend, and seeking to reverse it. Last week I published an article in the Vancouver Observer, citing the decline in accountability of elected leaders as a major cause of the 2008 financial crisis. Co-ops can become the starting point for a democratic reform movement that can eventually empower us to also reclaim our corporations and our governments.

We are organizing -- please email me (mark[at]votermedia.org) to join us in re-establishing Co-op Principle #2 -- Democratic Member Control:

"Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership."

@MEC director election endorsements: David, David & David

Members are voting in the Mountain Equipment Co-op board of directors election until March 28, at mec.ca/election. Here's how I plan to vote and why:

Board of Directors (vote for up to 3):

1. David Goldsmith
2. David Wartman
3. David Wexler

Reasons:

MEC member Dru Oja Jay emailed 5 questions to all candidates, and compiled responses in a handy colour-coded chart here. My top priority is his question #1:

1. In an open letter (available here) signed by over 350 people, "MEC Members for a Democratic Co-op" said that recent modifications to the bylaws, which give the MEC board the power to approve or deny members who wish to be candidates for the board based on criteria they set was "not an appropriate power for democratically elected directors" and creates a "conflict of interest." As a board member, would you work to change this? If so, how?

My second priority is his question #4:

4. Another cooperative principle MEC has committed to is "Member democratic control," which states that "Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions." Currently, the board does not consult the membership about any decisions outside of board elections and special resolutions, and contact information for board members is not available on the web site. Do you think that MEC's current behaviour is consistent with this principle? If not, what should be done?

My candidate ranking 1-2-3 above is based on Dru's colour-coded assessments of candidate responses to those two questions.

If you care (as I do) about gender diversity (not to mention first-name diversity), you may want to vote for my fourth pick, Judy Martin, instead of one of those three Davids.

(MEC should facilitate member sharing of this info by simply having an online candidate forum instead of continuing their clumsy email Q&A system, which I critiqued last year.)

Special Resolutions:

#1: NO

#2: YES

#3: YES

Reasons:

#1 is proposed by the MEC Board, and would transfer too much power from members to the Board, by rule changes including:

• Increase the number of members required for submitting a resolution, from 5 to 500.
• Let the Board unilaterally reject any member resolution for any reason, without submitting it to member vote.
• Transfer the power to screen director candidates, from the nominations committee to the Board itself.
• Place the nominations committee explicitly "under the guidance of the directors."

This is the most important vote on the ballot, in my view. I explain why in this article published today in the Vancouver Observer.

#2 and #3 are proposed by two groups of MEC members. I don't feel strongly about either of these resolutions, but I do feel strongly about member democracy so I will vote for them. I thank these MEC members for stepping up and doing the work to draft and propose these resolutions. It will be much harder for members to do this in future if resolution #1 passes.