Sunday, March 16, 2014

Vote for Member #Democracy @Coast_Capital Credit Union

SUMMARY:         中文

To control excess director pay and restore member democracy at Coast Capital Savings Credit Union, I recommend voting:
AGAINST the Board's resolutions (numbered 1, 2, 3, 4)
and
FOR the member resolutions (numbered 5, 6, 7, 8)
(Resolutions booklet here.) In the director election I recommend voting for three candidates not recommended by the Board. I'm voting for Lisa Barrett, Bruce Batchelor and John Fryer.

Vote now through April 8: You can fill in the paper ballot and submit it at any branch. Or vote online at coastcapitalsavings.com: log in, then click Online Voting tab at lower left. (Joint account members and business members can't vote online, so must use the paper ballots.)

Please spread the word to your friends who may be among Coast Capital's 500,000 members in southwestern British Columbia.
REASONS:

In 2007, the Board persuaded members to let the Board set its own pay based on a pay "philosophy" document. By 2011, the Board had raised its pay to more than double that of Vancity Credit Union's Board -- details here. (Vancity is similar to Coast Capital in size and location. Both have about 500,000 members.)

Members were unaware of this dramatic rise in director pay, until in 2013 two members created the Coast Capital Compensation Watch website, and gathered over 400 member signatures to put this resolution on the ballot:
"Be it resolved that, the members of Coast Capital Savings Credit Union establish the remuneration for the Directors of the credit union and that the amount paid to each Director is published in the Annual Report."
The Board put the member resolution and its supporting statement on pages 10 and 11 of this 12-page booklet, most of which was designed to persuade members to vote against the resolution. Examples of the Board's spin:
Page 5: "...you are being asked to vote on a special resolution brought forward by a member named Phil Embley..."
-- No mention of the over 400 members who signed petitions in support of bringing the resolution to members' vote.

Page 5: "...every three years the Board Governance Committee works with an independent external compensation consultant who reviews director compensation..."
-- Of course, the "independent" consultant is selected by the Board.

Page 8: "Coast Capital advises our members that some of the facts alleged in the [resolution's supporting] statement are inaccurate and misleading."
-- They gave no specific backup to this accusation, in spite of the many pages of their arguments in the booklet where they could have done so.

Page 9: "Vote “Against” if you agree with the 2007 member-approved approach to establishing director compensation"
Fortunately, members were able to see through the Board's spin, and voted 79.7% in favour of the member resolution! Voter turnout in 2013 set a new record of over 23,000 compared with less than 14,000 in 2012 and less than 20,000 in 2011.

Recognizing that excess pay indicated a lack of Board accountability to members, a group of concerned members (including me) worked with Phil and Scott at Compensation Watch to review Coast Capital's governance rules. We were dismayed to learn how the Board had written the director election rules to give themselves effective control of who gets elected, while maintaining a facade of democracy: They put their chosen candidates first on the ballot (in bold face, flagged as "recommended"), and prohibit campaigning. Candidates are not allowed to mention their candidacy on the web or by email or in the media, else they will be disqualified -- see 2014 Campaign Regulations (especially rules 4, 5, 6, 7). For data and analysis of how recommendations on a ballot affect elections, see my letter to the B.C. Financial Institutions Commission.

So we drafted four resolutions to help re-establish member democracy:
  • 12-year director term limit.
  • Disclose pay of top 3 executives.
  • Allow director election campaigning.
  • Set specific pay for directors, at Vancity's pay levels.
Several of us also offered to run for election to the Board, even though in 2014 we would still be subject to the ban on campaigning.

As in 2013, we had to gather signatures from at least 300 members to get these resolutions on the ballot. We got over 400 signatures on each. Here's a photo of me helping deliver them on January 24:



This year, the Board realized it would take more than spin to sway member votes their way, so they drafted four resolutions with the same headings as our four, and placed them ahead of ours on the ballot. Again, they drafted the member voting information booklet with many pages of their spin. Here's a link to the booklet and some rebuttal to their arguments:

Page 3: "Four individuals are bringing forward disruptive Special Resolutions ... which will threaten our great products and services."
-- All four of our resolutions are already in effect at successful financial institutions. Vancity's pay levels attract well qualified directors, who run for election with campaigning allowed. 12-year term limits are a well accepted practice, as is disclosure of executive pay. Each resolution is well supported by the statements on pages 6, 8, 10 and 12 of the booklet. On the contrary, a lack of accountability can threaten the success of a financial institution, as the 2008 financial crisis showed us, so we should strengthen accountability of Coast Capital's Board to us, the members. Similarly, a "democratic deficit" in the UK Co-operative Group was a causal factor in their 2013 scandal.

Page 3: "These individuals are aligned with a small special interest group known as Coast Capital Compensation Watch. Their name is misleading. This group is not the voice of your credit union. It represents the views of only a few supporters – not Coast Capital’s 512,000 members."
-- 79.7% of voting members said that last year's Compensation Watch resolution represented their views better than the arguments of a small group known as Coast Capital's Board. That small group seems to have a special interest in increasing its pay and its grip on power. More members voted for the 2013 Comp Watch resolution than ever voted to elect any of the current directors.

Page 5: "The Individual Resolutions are unnecessary and costly."
-- These resolutions were made necessary by the Board's unreasonable pay increases and unfair election rules. Compare 2011 Vancity Board pay of $366,000 to Coast Capital Board pay of $750,000 and other comparisons here. Also, the resolution proponents have taken care to time their submissions to coincide with director elections, so as not to require a costly extra mailing to all members.

Page 7: "We're already implementing term limits this year."
-- The Board's Term Limit resolution was drafted after the members' Term Limit resolution, in response to it, so there's no "already" about it. It even refers to the members' resolution, giving itself the power to override if both are passed. How can they even be allowed to put their resolution first on the ballot? And the Board's resolution would ignore the 20-plus years that two directors have already served: "... only an individual’s years of service as a Director of the Credit Union beginning on or after April 30, 2014 will be counted..." (page 16) So those two directors would have served at least 32 years each before their "12 year limit" resolution would term them out!

Page 9: "We already do this."
-- The members' resolution calls for disclosing the top three executives' pay individually, to the extent permissible by law. Coast Capital is only disclosing the sum of the top nine executives' pay, which hides information by lumping it together, as explained in the supporting statement on page 8 of the booklet.

Page 11: "Keep our elections democratic."
-- It amazes me that anyone could consider it democratic to silence election candidates and control voter information as tightly as this Board now does -- see 2014 Campaign Regulations (especially rules 4, 5, 6, 7). Even the organizations I criticized in the paper We Want Our Co-ops Back do not silence candidates as Coast Capital does.

Page 13: "Your Board also commissioned an independent member task force to review the credit union’s philosophy that sets Director pay."
-- The Compensation Task Force process was orchestrated by another "independent" consultant chosen by the Board and Board-overseen staff. It concluded by proposing another pay "philosophy" that would continue to give the Board leeway in setting its own pay -- more on that at this Comp Watch page.

[About the author of this post: Mark Latham is a Vancouver-based financial economist (cv: linkedin.com/in/marklatham) specializing in governance reform of co-ops, democracies and corporations. He was appointed by the Chairman of the U.S. Securities and Exchange Commission to represent individual investors on the SEC’s post-financial-crisis Investor Advisory Committee.]

[Last updated on 2014-04-06.]

Wednesday, March 12, 2014

Vote for #Accountability @Coast_Capital Savings Credit Union

This post has been superseded by a subsequent post which includes more recent info, so I recommend reading that instead.

But if you would like to read this older post, it continues below:

Thursday, February 13, 2014

@Liberal_Party of #Canada Members' Voice Proposal #LPC

I’d appreciate your feedback on this 4-page draft: LPC Members' Voice Proposal

(Party members can comment on my post at liberal.ca. Anyone is welcome to comment on this blog or by email to mark[at]votermedia.org.)

Summary –
- Here is something the LPC can do now to help win the 2015 election, by uniting Party members nationally in developing and supporting a consensus platform, while showing Canadians a credible commitment to democratic reform and accountability.

- Proposal: Let LPC members vote at liberal.ca to allocate $20 per day among competing Liberal blogs.

- A similar blog funding competition at UBC’s student union helped engage, inform and connect members with elected leaders — see video Votermedia at UBC

- This LPC blog competition can help generate ideas for future Liberal government policy. For example, nationwide voter funded media could engage and inform voters, broaden policy debate, enhance government accountability and reduce corruption.
My background: I’m a financial economist (cv: linkedin.com/in/marklatham) specializing in reform of democracies and corporations by improving voter information systems. This proposal would help increase engagement by members and voters, but its main goal is to ensure that those who do participate are better informed. The combination of funding plus voting by LPC members would generate new content on the top-voted blogs, and recognition by the LPC community that this content represents a broad consensus of members.

This follows up on my Dec 29 post on this blog: Why I joined the Liberal Party of Canada.

Wednesday, January 29, 2014

@Coast_Capital Credit Union: 4 member resolutions go to vote in March @Comp_Watch

Over 400 members of Coast Capital Savings Credit Union signed petitions to require a member vote on these four resolutions:
  1. Set Specific Pay for Directors
  2. Disclose Pay of Top 3 Executives
  3. Set 12 Year Term Limit for Directors
  4. Reform Director Election Processes
This surpasses the 300 signatures needed to have a vote of all Coast Capital members on the resolutions, on the election ballot March 14 - April 8.

A big thank-you to Phil Embley and Scott Kristjanson at Coast Capital Compensation Watch for spearheading this drive to reform our credit union! I joined Scott at Coast HQ to submit the signatures, so he posted my smiling face on the Comp Watch website announcement here.

Members please vote YES on these resolutions March 14 - April 8!

Monday, January 20, 2014

@Coast_Capital members please sign these #democracy reform resolutions @Comp_Watch

This is the last week for Coast Capital Savings Credit Union members to sign these 4 resolutions for restoring the board's accountability. We need 300 signatures to get them onto the March 2014 ballot, so that all members can vote on them. We have over 200, so getting close.

This is important because the Coast Capital board has been taking advantage of its power to overpay itself with members' funds. In 2011 they paid themselves more than double the pay of Vancity Credit Union's board -- details at coastcapitalcompensationwatch.com.

Members: Please print, sign, and return:

ALL 4 RESOLUTIONS IN THIS PDF FILE

You can scan (or photograph) your signed resolutions and email them to compensationwatch@gmail.com, or fax to 604-542-9369, or mail to address on the form.

FYI we've posted an explanation of each resolution:
  1. Set Specific Pay for Directors
  2. Disclose Pay of Top 3 Executives
  3. Set 12 Year Term Limit for Directors
  4. Reform Director Election Processes
Please forward this to friends in Metro Vancouver and Vancouver Island who may be members. Thank you!

Saturday, January 4, 2014

@modo_carcoop: Vote now to elect 3 directors; but there's no online campaign forum

Vancouver's Modo The Car Co-op members are voting in the annual election of directors from January 4 through January 22. We will choose 3 of these 5 candidates:
  • Aaron Burns
  • Arpal Dosanjh
  • Joel DeYoung
  • Simon Abou-Attoun
  • William Azaroff
I thank all five for offering to serve as directors of our co-op!

This year, Modo has launched online voting for the first time, an important step forward now that we have grown beyond 9,000 members. Each candidate has written a few paragraphs about themselves, and made a 2-minute video -- see www.modo.coop/modo-board-of-directors-2014-nominees-and-voting

It's great that busy members need not attend the AGM to vote, and we now have time for informed comparison of candidates. Unfortunately, there's not enough online support for informed comparison of candidates. We should have a campaign forum, linked from the election page, where members can ask candidates questions and discuss their answers. For example, see the director election campaign forum at Canadian Internet Registration Authority.

How about setting that up for next year?

The Modo AGM on January 22 should be fun. Free registration; all are welcome; only members can vote:
  • Co-op Fair 6-7pm: Meet other local co-ops (500 Granville St)
  • AGM 7-9pm: Complete the director election process (500 Granville St)
  • After-Party 8:30pm-midnight: Enjoy! (200 - 470 Granville St)
Related links FYI:

Sunday, December 29, 2013

Why I joined the @Liberal_Party of #Canada #LPC

I'm a swing voter. At various times, I have voted Conservative, Liberal, NDP, and Green. We swing voters keep politicians on their toes, competing with each other to serve the public interest (or at least to present themselves that way). No party can take our votes for granted.

So I had never joined a political party in my life. Until this year. Why the change?

Democratic competition is essential for making elected leaders accountable to voters. But even though our political systems feature electoral competition, that doesn't seem effective enough to keep our leaders and governments loyal to the public interest. Corruption of varying degrees seems pervasive and persistent, from the Liberals' sponsorship scandal ten years ago to the Conservatives' senate expenses scandal now.

Solving this problem has been my main occupation for the past 17 years, focusing first on corporations (where shareowners elect directors), then broadening to include democracies. As a financial economist, my main contribution is to design a system for voters to pay information providers (such as journalists), creating stronger incentives for journalists to serve the interests of a voter community. Successful tests of this system are reported in the paper Experiments in Voter Funded Media.

Designing a solution is one thing. Getting it implemented is quite another. Those in power are naturally reluctant to shift power from themselves to voters (which is what happens when voters become better informed). So it is difficult to change the system from the outside.

When a friend whom I respect asked me to help him run for election as a Liberal member of Canada's parliament, I soon agreed to do so, but did not commit to any specific type of help. It was only later, as I tried to understand the current dynamics of Canadian federal politics, that I saw a potential alignment of my public interest reform work with joining the Liberal Party of Canada (LPC) myself.

To regain Canadian voters' trust after the sponsorship scandal, the LPC needs to show they (we) are serious about reducing corruption and strengthening accountability. We also need to propose some innovative policy ideas to distinguish ourselves from the other parties (e.g. see this perspective in the Globe & Mail). A new internet-based voter information and engagement strategy could help fulfill these needs.

There are other reasons why the centrist LPC may fit my political orientation better than other parties. I was fortunate to grow up in a home where both my parents cared about politics and public policy. Best of all was their wide range of views, since Mom was NDP while Dad was Conservative. (And they stayed married for life!) I learned to appreciate that there are intelligent people in all our major political parties who are sincerely trying to serve the public interest. I see them all as colleagues in that endeavour.

The issue of democratic accountability can appeal to voters across the political spectrum. A centrist party may be in the best position to attract swing voters from other parties by taking the lead on such an issue.

Of course, voters and party members must try to ensure that an elected party actually delivers on its campaign platform. Backsliding has long been the norm:
"As soon as the new leaders have attained their ends, as soon as they have succeeded (in the name of the injured rights of the anonymous masses) in overthrowing the odious tyranny of their predecessors and in attaining to power in their turn, we see them undergo a transformation which renders them in every respect similar to the dethroned tyrants. Such metamorphoses as these are plainly recorded throughout history." (Michels [1911] p. 114)
When I quoted the above passage last year in a paper We Want Our Co-ops Back (p. 11), I added:
"Therefore in addition to supporting challengers, it is even more important to change a co-op's rules in ways that strengthen a competitive democracy, and reduce the entrenchment of the current leaders. Ideally, we members would like to elect directors that will help implement such reforms. So we should push candidates toward platforms that include reform, and hold them accountable to their promises."
As Lawrence Lessig said eloquently in his February 2013 TED talk (about 11 minutes in): It's not that democratic reform is the most important issue. But it's the first issue -- the one we need to solve in order to solve the more important issues like environmental policy. Although money-driven corruption is not as bad in Canada as in the USA, the power of well-funded narrow interests to misinform voters and influence politicians is a big problem here too.

So I'm heading for the LPC Biennial Policy Convention in Montreal, February 20-23, 2014.

BTW Canadians get tax credits for federal political donations. Your first $400 donated per calendar year only costs you $100. You can do this once by December 31, and then again in January -- donate to LPC at liberal.ca/donate or call (888) 542-3725.