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This post has been superseded by a subsequent post which includes more recent info, so I recommend reading that instead.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


Flash update -- ballot published Friday March 14:

The Coast Capital Board has inserted its own four resolutions onto the ballot ahead of the four member resolutions. They mimic the member resolutions but water them down greatly. I recommend voting AGAINST the Board's resolutions (numbered 1, 2, 3, 4) and FOR the member resolutions (numbered 5, 6, 7, 8).

Director election: I recommend voting for three candidates not recommended by the Board. (I plan to vote for Lisa Barrett, Bruce Batchelor and John Fryer.)

To vote, go to coastcapitalsavings.com, log in, then click Online Voting tab at lower left.

Member rebellion over director pay leads to democratic reform proposals and contested election.

Delivering four resolutions signed by over 400 members, which required Coast Capital’s Board to bring them to a vote of all members, starting March 14.

The upcoming director election and referenda at Coast Capital are a great opportunity for members to stand up for democratic accountability of our elected leaders. The outcome can affect the future of not only Coast Capital, but also other credit unions, co-ops, democracies and corporations.

From March 14 through April 8, Coast Capital members will be voting to elect three directors, and to approve or disapprove these four member-proposed resolutions:

5. Set 12 Year Term Limit for Directors
6. Disclose Pay of Top 3 Executives
7. Reform Director Election Processes
8. Set Specific Pay for Directors

(The links above lead to explanations and full text of resolutions on the Coast Capital Compensation Watch website. I renumbered them on March 14 to match the ballot now published.)

The proponents consulted with many Coast Capital members (including me) when drafting these resolutions. Each proposal is already supported by more than 400 member signatures, which exceeds the 300 legally required to get on the ballot.

I recommend voting for the above four resolutions, and for three director candidates other than those recommended by the current Board. (I plan to vote for Lisa Barrett, Bruce Batchelor and John Fryer.) Here’s why:

I’m a financial economist (cv: linkedin.com/in/marklatham) specializing in governance reform of co-ops, democracies and corporations. I find that the same lack of accountability causes similar problems in all these organizations. Voters find it difficult to monitor elected leaders, leaders prefer it that way, and don’t encourage the development of independent sources of voter information. Rather, they try to control the information conveniently available to voters, to ensure it is favourable to themselves.

From a recent essay in The Economist reviewing democracy around the world: “Many nominal democracies have slid towards autocracy, maintaining the outward appearance of democracy through elections, but without the rights and institutions that are equally important aspects of a functioning democratic system.” “...the first sign that a fledgling democracy is heading for the rocks often comes when elected rulers try to erode constraints on their power...”

We voters need to ensure that our elected leaders are accountable to us. If we don’t, we risk more of the same hidden malfeasance that brought us the 2008 financial crisis. Excess pay is the most obvious abuse of power, but merely the tip of the iceberg. There are many ways to game the system, and many “experts” for hire to help find new ways.

The Coast Capital Board has been gaming the system by putting their director candidate recommendations on the election ballot, and preventing candidates from campaigning to members. That kind of election influence and information control let them think they could get away with raising their own pay to over double that of Vancity Credit Union’s Board. Last year one member brought this to the attention of all members by collecting enough signatures to put a resolution on the 2013 ballot, to restore member control of director pay. Against Board opposition, this was approved by an impressive 79.7% majority. The full story is on the Coast Capital Compensation Watch website.

Since then, the Board has tried to direct the process by which members can determine their pay -- see Task Force Magic. That is why more specific reforms are needed this year: the four member resolutions, and electing new directors to the Board who are independent of the incumbents.

I raised most of these issues with the B.C. Financial Institutions Commission (FICOM) in a comment letter last year, but we credit union members need not wait for them. We can start democratic reform at Coast Capital, then spread it to other credit unions, co-ops, democracies and corporations as outlined in two articles entitled “We Want Our Co-ops Back”, at votermedia.org/publications.

Please spread the word, especially around Victoria, Richmond, Surrey and the lower Fraser Valley where many branches are located. There are half a million members, and most tend not to vote. But if they hear about this, many will step up and vote for reform. When the Coast Capital ballot is published on March 14, I will post updated information at votermedia.blogspot.ca. Comments welcomed below, by email to mark@votermedia.org or tweet to @votermedia.

Mark Latham is an independent financial economist, Founder of Votermedia.org and a Director of ProxyDemocracy.org. 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.