Conference 7.286::dcu

    
    RE: .0
    
    I agree with 99.9% of what you say.  But I do not think he should be
    saying he may not stay on if the BoD were replaced (MKO meeting) and
    implying that the credit union would be damaged by their removal.  Many
    have not found fault with Cockburn's positions, so much as they have
    objected to the extremeness of those positions.  A DCU President should
    commit to working with WHOEVER the members place on the Board.  The
    commitment of the DCU President cannot and should not be personalized
    in this regard.  He loses a certain amount of credibility when he comes
    across this way.  I don't want another President at DCU that a BoD
    places blind trust in.  I want a President and BoD that have a good
    working, business relationship in which both parties have certain
    duties and responsibilities.  That is how the system was designed to
    work.  If it does not work this way, we end up with another dangerous
    situation similar to the one that we still haven't gotten the final
    bill for.
    

    I agree with .0
    
    Also I felt that Chuck Cockburn had a hidden message in his speech on
    Tuesday. The message was ' I recognize that you want to punish the
    board and symphthize with that. The instrument of throwing them all out
    is too blunt.' He clearly did not want three months with no board and
    he does not want an entirely new board. My impression is that he would
    like some fresh blood on the board. 
    
    The clues were - and I paraphrase his speech - "on motion 2 you only
    have two choices, throw them all out or leave them all in." Later he
    said "there may be special elections where you can register your
    choice." 
    
    I read his speech as saying vote against motion 2 but vote for motion
    3.
    
    Tim

    Re .all
    
    I too believe Chuck Cockburn is in a very difficult situation. I would
    be very upset if he did badmouth the board. That would be totally
    unprofessional. I think Tim has it in .-1. Nowe that he points that out
    I think I agree with him. I think Chuck fully intended to convey that
    subtle message.
    
    CC also rightfully doesn't want a totally green board. More than that
    he doesn't want nor need (and nor should the members) a board that
    micromanages the credit union. The board should be responsible for long
    term strategy and top level policy. All operational issues should be
    owned by the paid president. The mechanism a board should use for
    substantially changing the direction of a president who won't walk in
    the desired direction is to fire him. It is not to keep on pushing him
    back on the path. How the president chooses to get from A to B should
    be totally up to him and the board should not interfere in details. Or
    at least that's what my philosophy would be if I was on the board.
    
    At the moment the president is marching in the direction the board
    wants him to march in. Ie limited communication etc. I have no reason
    to believe that CC wouldn't change direction if his masters were
    changed. I only hope that the current board don't fire him for that
    subtle message about the importance of question 3.
    
    Let me tell you something. In all the discussions I had with people
    that were close to the organization of the special meeting, publicising
    it etc, we always considered question 3 just as a means to make sure that
    there weren't any shannangigans around actually holding elections
    if question 2 passed. I (and I believe others) never even considered
    question 2 failing and question 3 passing. We expected them to pass or
    fall together.
    
    But when I got to the special meeting and the meeting got to question 2
    I immediately sensed that unless the issue could be debated openly
    the meeting wouldn't pass question 2. I then sensed that there was
    firm support for question 3 from the participants. I feel this was
    driven by a number of things:
    
    	1, The meeting attendees discovered what we already knew. That is
    	   how arrogant and uncommunicative the board (and MS in
           particular) were. Mark's behaviour may have helped his position
           on Q2 but it certainly severely damaged him on Q3.
    
        2, Without all the information that we in this notesfile have
           members quite justifiably felt that Q2 was too drastic. If
           I had the level of information that most people at the meeting
           had (ie educated by the issues but not living them for a month
           or 2) I think in retrospect I'd have been concerned by Q2.
           Especially when the only true debate on Q2 was 2 speeches from
           the board side of Q2 that predicted doom and gloom should Q2
           have passed.
    
    	3, In retrospect, reading Tim's note, I think Chuck Cockburns
           statement may have helped the passing of Q3. Thank's Chuck,
           we appreciate it. We're trying to get you a board you can be
           proud to work for, rather than one you feel you have to defend
           at every turn.
    
    I was well prepared for a good debate as were many others. I'd like to
    think that given the chance we could have got Q2 through. Obviously the
    board felt the same way otherwise the chair would have made sure that
    both sides actually got the floor to debate.
    
    Dave
        

    I think Chuck will fight for the current and future Boards.  One
    caveat.  He left a credit union where the Board had nothing to do but
    look over his shoulder.  He has stated that he came to this credit
    union after interviewing the Board.  I'm sure that he found them to be
    good by some measure.  But, I hope it had nothing to do with the proven
    track record of our Board as far as looking over the shoulder of the
    president goes ...
    
    Steve

    >He left a credit union where the Board had nothing to do but
    >look over his shoulder.  He has stated that he came to this credit
    >union after interviewing the Board.  I'm sure that he found them to be

    This is one of the reasons that the Magnone was able to allegedly
    defraud DCU - the BOD was not minding the store...  The BOD must not
    get in the way, but must be involved.  It is a fine line to walk, but
    we have seen it fail and must move on and do better in the future.

    	- mark

    
    RE: .5
    
    Most definitely!  And an occasional look over the shoulder of the Prez
    isn't necessarily a bad thing either.  Had the BoD looked over
    Mangone's shoulder every Thursday afternoon, they would have found him
    at Barnstable Credit Union acting as an advisor and "de facto member of
    the Investment Committee".
    

My simplistic idea for how the Board and President should get along goes
like this.  

1)  Board decides policy after discussion with the president

2)  President decides whether to implement the policy or quit.

3)  Pres tells board how policy will be implemented after discussion w. Board.

4)  Board decides whether to let the Pres do it his way or fire him.

Reality is naturally more complex.  However, the chief distinction I'm
trying to draw is that the Board *should* watch what the president is
doing, they just shouldn't interfere with how the president carries out 
their policy, unless there is clearly something wrong.  

Setting policy, of course, includes setting up the sort of internal
controls that prevent (for example) a single individual from transferring
$3.5M on his own authority without alarm bells going off.  Again, it isn't
the Board's job to man the alarm bells, just to make sure they are there
and that that it would take a *really big* conspiracy to keep them from
going off.

	Enjoy,
	Larry

.0>      I think chuck is a talented individual in a very difficult
.0>    spot.  He obviously owes loyalty to the "current regime",  whether
.0>    he agrees with them or not.   I'd be suspicious of him if he
.0>    were not acting 100% towards the goals set by the current BOD,
.0>    much the same as I'd expect him to honor the wishes of any new
.0>    BOD.
 
I feel the board and Chuck should honestly deal with their credibility problem
if their goal is to help the DCU. Chuck isn't responsible for the bad loans,
however I do form an opinion of him based on his actions in dealing with the IPP
and his speeches in meetings.

I agree that Chuck needed to follow the boards directive on the IPP to the
letter (*but no further*). When he was queried about the volume of request that
lead to the IPP, he answered "You have no need to know" in what I heard as an
arrogant tone. With the past hidden loans for the former president, Chuck should
certainly expect to be questioned closely. In my opinion, correct behavior would
have been to *patiently* reply that he could not comment further on the issue.
Instead Chuck has not only followed the board's directives but has adopted their
view that the questioners are similar to rebellious teenagers who are impeding
the adults in righting the DCU. I respect him for holding meetings at several
sites.

I also question how Chuck has handled the DCU staff. At the special meeting, I
noticed applause whenever his name was mentioned. Believe that he is very
capable - and the DCU staff appreciate this. However, it appears that the
staff were in fear for their jobs over the votes. Except for a note on how the
staff voted differently than Deccies on question 2, I have only seen positive
comments on the staff and pleas from the "special committee" for members to keep
their money in the DCU. From the board we get bad loans, checking charges, plus
"shop around" - which may have contributed to recent staff layoffs (since
defaults on Deccie loans are at .4%). From Chuck we get worrisome thoughts that
the DCU couldn't operate w/o a board and that he chose the job based on the
present board. I expect that Chuck promoted a particular perspective on the
votes in the DCU.

From both the board and Chuck, I get the impression that the members should
carry-on quietly behind their competent leaders. At the MLO meeting, a very
sincere member asked what she could do to help the DCU - Chuck replied that she
should make decisions based on her financial best interest. (A few minutes
before he mentioned that companies were trying to limit deposits to improve
their capital ratio.) Presently companies are realizing that they are wasting
the insight of the workers. The only way to improve quality, profitability and
productivity is to allow some measure of worker input and control.

Some S&L's began as workmen's building associations in the 1800's, since people
couldn't get house mortgages from merchants' banks. A community of workers would
pool their saving; each year a lottery would allocate loans to member families.
That's membership investment and control over a mutual society to aid themselves
and their community. I could see putting my money in such a mutual aid group if
I felt it belonged to me and my community and I knew where the money was going -
even if it didn't offer the best rates. In the 90's investment money has been
used for risky over-leveraged buy-outs instead long-term investments - wrecking
companies like Eastern & Bloomingdales w/ debt instead of building up our
industrial base.
    

�From the board we get bad loans, checking charges, plus
�"shop around" - which may have contributed to recent staff layoffs
    
    DEC plant closings and layoffs and the resulting DCU branch closings
    may have had more to do with staff layoffs.  Someone reported the
    number of account closings since the "Choices" brochure and they
    weren't that high.

    
>    DEC plant closings and layoffs and the resulting DCU branch closings
>    may have had more to do with staff layoffs.  
    
    Just because people leave DEC doesn't mean they close their DCU
    accounts.  In fact, they are probably better keeping them.  If they run
    into tough times, a credit union should be more compassionate than a
    bank.  I can only think of 1 branch closing, Phoenix.  Anybody know of
    any others?
    
    >Someone reported the
>    number of account closings since the "Choices" brochure and they
>    weren't that high.
    
    Not sure we ever got this number from DCU.  And if it was high, I doubt
    if we would be told that.  Besides, MANY members just took the money
    out and left a token there to retain voting rights.  Numbers of
    accounts may be the wrong indicator to be watching.

    RE: .9 and .10
    
    We may not have been given a "number of accounts" figure but we were
    told, in more than one place, that deposits fell 8% in the month of
    September (following the "Choices" flyer).  While not a huge number, I
    don't believe it's appropriate to write it off as insignificant either.
    
    I can't wait to see what the drops in deposits for Nov and Dec are.

    The branch in APO has also closed. 

I didn't close my checking account after receiving the choices brochure.  But
after "shopping around", I opened a new account at a different institution and
moved my direct deposit of net pay to the new account.

I think you want to measure "account openings at other institutions" rather than
"account closings at DCU".  Good luck getting that statistic...