This year’s election cycle is putting the issue of what American democracy means front and center. Some believe it is about majority rule-the winner calls all the shots. Others have a more nuanced view of participation, diverse representation and compromise.

One of the ways citizens in America learn about democratic practice is its use in the many civic and public organizations in which we all participate: churches, local elections, volunteer and nonprofit groups.

Credit unions are designed to be democratically governed. One person, one vote. The primary means for how this process is exercised is at the members’ annual meeting and the election to fill board openings.

Practice Without Substance

In a conversation yesterday, a long-time credit union member (he joined at age 5 in 1966) said he never saw an actual election. Instead, as he learned, the Chair would appoint a nominating committee led by the Vice Chair. That committee selected just the number of persons as there were open seats. The candidates were all familiar faces from the existing board or “associate board” members. The test was loyalty – would they “go along to get along” with the rest of the board. The tenures of several of these board members extended over three and four decades.

This description would be familiar to many credit union boards. The election process is managed so as to perpetuate the incumbents or their fellow travelers. It is democratic in neither practice nor theory. In the end, the credit union is led by persons who believe in their special skills to remain in office for as long as they wish.

The justification for this self-perpetuating board selection is the idea of a “leadership class” like trustees, that should not have to answer to voting owners, let alone face a contested election. This is especially so when external factors suggest satisfactory organizational performance. Why tinker with success? Aren’t we doing what is expected, and leading successfully?

However, when a minority – no matter how talented – takes control of a credit union board and the selection process, the responsiveness and accountability of the institution to its member owners is at risk. Which means the future of the credit union is not in the hands of the members, but of a small group who eventually may tire of the task and decide to merge — not find new leaders.

A Case Study of a Contested Board Election

Breaking this cycle of self-appointment without member choice is tough. Democracy is not easy. However, there is an example unfolding at State Employees Credit Union (SECU) in North Carolina now in its second year of a contested board election.

In later posts I will cover the election procedures and efforts to provide alternatives to the traditional board self-nominations and election by acclamation.

The future of credit unions may depend on recovering their democratic roots and practices. SECU is an example that even very large and powerful cooperatives can change when members engage.

Without the annual accountability of true elections, the “leadership class” will be tempted to just continue on its chosen course and priorities. That isolation is one reason why the number of credit unions has fallen from 6,000 to 4,600 in just the past seven years.

These are not “safety and soundness” failures. They are failures of leadership and morale. And it all depends on having a passive, uninvolved member that will act as a customer and not an owner-especially at the annual meeting.

The Ultimate Goal of Democracy

Democracy is about something more than elections. Elections ultimately undergird freedom. As Richard Rohr has stated in another context: But it’s a freedom we must choose for ourselves. It is almost impossible to turn away from what seems like the only game in town (political, economic, or religious), unless we have glimpsed a more attractive alternative. It’s hard to imagine it, much less imitate it unless we see someone else do it first.

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