Democratic Member Control: The Second Cooperative Principle
Giving people control over their own destiny – what a concept. The second organizing principle of the International Cooperative Alliance’s seven principles of cooperation begins to put “meat on the bones” to the purpose and meaning of a cooperative entity like a credit union.
Democratic member control – Bringing it all together
You help call the shots by electing a board of directors. One member equals one vote. This is local democracy in action.
Please Note: I want to take a moment once again to acknowledge this handout prepared by Synergy Credit Union in Saskatchewan. It does a beautiful job of presenting these principles in simple and straightforward terms.
That, in a nutshell, describes where member control comes from. As a member of your local credit union, you participate in deciding who will oversee the general direction of the institution, and it will act to serve its members and community. And refreshingly, your influence is based on being an individual member – not on the number of voting shares you bring to the table. In some ways, it seems like a radical concept, but it doesn’t need to be.
Credit unions work by offering members a sense of ownership along with the feeling of inclusion I talked about in my last post. And that sense of ownership can be empowering.
But that sense of power brings with it a feeling of responsibility. We are collectively involved in real decisions with real consequences. And those decisions should not be taken lightly.
It’s your chance to be involved
The credit union is driven by the needs and interests of its members. The size of your account or your status in society doesn’t have an impact on the impact of your vote and shouldn’t affect your choice to become involved. Credit union membership is even more widespread than the electoral sector, where we also talk about the ideals of democracy.
Decisions about age and share purchases are included in an individual credit union’s bylaws – as decided upon by the members. And while this allows a wider array of people to become involved, members elected to the board must be Canadian citizens and at least 19 years old.
Keep on refreshing yourself – and your credit union
It seems to me that we are constantly being reminded to refresh ourselves in order to stay on top of our game. That is true for institutions like our credit unions that depend upon their membership for their growth and vitality.
An MNP report titled Credit Unions and Millennials points to statistics gathered for a survey on Canadian credit union membership. From that report, MNP highlights the fact that “While individuals aged 18-34 make up more than 27 percent of the Canadian population, they only represent 15 percent of all credit union members”
So, it would seem that credit unions may have a renewal issue. We all know that we live in an ever-changing world. I mean, it’s a cliche, and I’m sure there are plenty of memes out there about this.
And to remain viable and appeal to a new generation of potential members, credit unions are going to have to pursue and perfect the tools that appeal to young members who have grown up in a world constantly connected to the internet and mobile technology.
This MNP report goes on to describe the kinds of efforts that could successfully bring in a new generation of members. I thought these recommendations were a fascinating blend of emerging technology and existing strengths.
New technologies are shaking up the banking sector
The introduction of Bitcoin fifteen years ago is probably one of the most famous examples of new technology in the financial and banking sector. As the leading example of a technology called decentralized digital currency, Bitcoin has acted as a lightning rod for this new technology. And seems to me that by now everyone has a strong opinion, good or bad, about it. In fact, by 2021 approximately 50 countries have banned or implicitly banned while other countries have identified it as their official currency (El Salvador), accepted it for accepting donations (Ukraine), or even used it to avoid international sanctions (Iran).
Online lacks the personal touch
While Bitcoin might be one of the most high-profile fintech stories of the new millennium, other changes have been quietly taking place as well. Things like electronic funds transfer (think PayPal and Interac) and online banking (think Tangerine or Simplii).
Although I have written about the credit union response to decentralized currencies here, I think online banking holds a special place in this discussion. Tangerine and Simplii (wholly owned by the Bank of Nova Scotia and CIBC, respectively) are online only. While you and I may do most of our day-to-day banking online, there are times when you will want to see a friendly face. Getting a car loan, securing a line of credit or discussing mortgage options could fit into that category.
MNP points out how the in-branch interaction with fellow human beings highlights the strengths of your friendly neighborhood credit union.
Old-style values solidify the benefits of credit unions
MNP also points to the pivotal role that credit unions across Canada and around the world have played in defending and helping out the “little guy” and standing up for something more than the bottom line. They highlight the role of environmental, social and governance (ESG) and the principles of responsible investing that credit unions can promote while attracting younger consumers.
Credit unions continue to have a role to play because of their values and principles
The democratic member control at the base of the credit union model anchors everything else, and it will continue to do so into the years to come. So take advantage of the opportunity to be involved and have your say. Doing so will only serve to strengthen your credit union and movement itself across the country and around the world.