Coast Capital executive responds to column on board compensation

Low voter turnout endemic for all credit unions, Glenn Wong writes

Re: West Shore columnist seeks upgrade to three per cent election (Goldstream News Gazette column, April 10)

I read this article on director compensation with a great deal of interest, but also with several concerns, given that it fails to provide readers with both sides of the issue.

The artcile questions the legitimacy of Coast Capital’s electoral process because voter turnout is admittedly lower than we would all like it to be. With specific reference to the two special resolutions on board compensation that were approved by more than 80 per cent of voting  members in 2007, you suggest that low voter turnout calls into question the results of those votes.

Low voter turnout is a challenge faced by all credit unions. Coast Capital has made strenuous efforts to boost participation in elections and getting as many members as possible to vote remains a top priority of the board. We were among the first credit unions in Canada to introduce online voting, with this very goal in mind. This was no different with our 2007 special resolutions on board compensation, as we mailed out voting packages to all eligible voters. And for the ongoing special resolution vote as well, we sent detailed information on director compensation, information on how to vote and ballots to all eligible members. We have also posted this information on our website and have made it available in all our branches, where members can also cast their ballots.

I disagree that the choice of those who opt to vote counts as “zero” simply because many others choose not to. Coast Capital has an obligation to respect the decision of those who voted in 2007 to approve the compensation philosophy currently used by the board. Their vote is valid and representative of the choice of the membership, under provincial legislation and the credit union’s rules. We of course hope that member turnout in the ongoing special resolution vote will be high, but if it ends up being low, would either side be justified in arguing that the decision of those who made their voices heard is somehow invalid? I would say no, and I’m sure even proponents of the special resolution would agree with me on that point.

It was also suggested that Coast Capital directors are free to set their own compensation. This is false. Under the terms of the Director Remuneration Philosophy approved by the membership in 2007, the credit union’s members decided on the parameters for board compensation, which the board is obligated to follow. Members approved a range within which board compensation should fall and mandated the board to work with an independent consultant to ensure compliance with this philosophy. It’s worth noting that the compensation philosophy set the top end of this range much lower than what our peers on the boards of the big banks and other private companies receive.

I think Coast Capital members will be assured to know that our governance practices model the recommendations of the 2012 Financial Institution Commission’s task force on advancing credit union governance. And when all is said and done, this issue will be decided by our members, because governance at Coast Capital Savings is founded on strong democratic principles, openness and transparency. This has always been the case and will not change. I encourage all Coast Capital members to participate in the special resolution vote April 16 and I hope they examine both sides of the issue before doing so.

Glenn Wong

chair, governance committee

Coast Capital Savings board of directors

Victoria News

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