Credit union elections are a vital aspect of any financial cooperative. As cooperatives are owned by their members, members are responsible for electing the board of directors. The board, in turn, manage the credit to handle the management of the credit union.
While legislation regarding credit unions varies internationally, it shares one common feature: credit unions exist for the benefit of their members.
In contrast to most banks, which are managed for the benefit of their shareholders, credit unions focus on the maximum benefit of their members and the community as a whole. Credit unions are financial cooperatives and work as non-profit organizations. Profits made are reinvested into the credit union or are passed onto their account holders. Credit unions typically provide more affordable loans and better rates of interests as the membership is working together for the benefit of the community.
A board of directors to manage the credit union
In order to run the credit union efficiently, there needs to be high level management. In short, a board of directors. The board assess risks, determine the direction of the credit union and decide on interest rates on loans and savings. A good board will work for the benefit of all members. The board is always accountable to its members in the form of elections. Democratic values lie at the heart of all cooperatives and financial cooperatives in particular. Board members who are seen as doing a poor job will not be reelected when their term is over.
The term of office is on average three years but can vary between credit unions. Larger credit unions are often split into regional or local branches. Smaller divisions help to better serve their local communities while being part of a larger community enables access to more resources and economies of scale. Local divisions elect delegates to represent them on a national, or regional level and elect the board of directors on their behalf, usually at an AGM.
Voting systems in credit union elections
While shareholders in companies can have several votes, credit union elections are conducted based on the ‘one member – one vote’ policy. This cooperative principle ensures that all votes are weighted the same. Regardless of how much money a member has invested into the cooperative, or has saved in their accounts, members are all equal. The larger the membership, the more complicated the voting procedure becomes. Online voting can help you reach more voters in your credit union, increasing voter turnout.