Conference 7.286::dcu

    Well, why were some "family members expenses ... paid for by the credit
    union"?
    
    Can any board member choose to bring along family member(s) at the
    DEFCU's expense?
    
    -Glenn-

    I betcha it won't be "allowed" any more.
    
    Since there weren't any rules, no rules were broken.
    
    It sounds like the current board is setting up some rules.  Do you
    think there's a good chance one of the rules might be "no family
    members" on trips like this?  I do.
    
    'nuf said.
    
    K.

    I don't think "no family members" on trips is a good rule. But
    no paying their way is. There is a difference. I know I'd hate it
    if Digital tried to forbid me to take my wife and/or son along on
    some trips at my own expense.

    Training for board members is, IMO, often a good investment. Sometimes
    that means paying their way to convention type meetings. Or
    professional seminars. However, boards should use care in how that
    money is spent. It is not always needful for all members to go.
    Sometimes one or two, depending on how many parallel sessions may
    be run, may be enough. Those members who go can return and share
    information and be a resource for the others. 

    Some special meetings may suggest that all members go. If they cover
    in detail a particular and serious problem for the CU for example.

    In any case guidelines that are known and whose rational is clear
    are a good idea for the future.
    
    			Alfred

>        It is common practice that credit union officials attend local 
>        and/or out of state conferences.  The DCU Board, in general, 
>        has annually spent less on conferences than the average credit 
>        union of similar size.  

    Let's not miss the last line here. At least we can take some comfort
    in knowing that things, while perhaps not what we'd like, were at least
    within some reasonable bounds of expectation.

    		Alfred

.0 is about what I expected.  I hope the new policy allows trips to 
credit union conferences in reasonable places (like Anaheim) but 
disallows trips to remote/resort locations for purposes that could 
be as well served by meeting in New England -- not to mention only
paying for those whose attendance has a clear business justification.
And, of course, full disclosure of the cost and purpose of such events 
is essential.  I think disclosure by itself is enough to ensure that 
this and future Boards use travel wisely.  

	Enjoy,
	Larry

re .4:  It's good that the DCU trip budget isn't out of whack compared to 
other credit unions.  And I don't mean to put disproportionate emphasis on
what has turned out to be a relatively small expenditure (compared to the
Participation Loan losses, for example).  However, the current state of the 
Savings and Loan industry makes me feel that a relative "we're no worse than 
anyone else" scale is not enough.  The Board appears to be moving toward 
policies that are justifiable on an absolute scale, not just a relative
one, which I find quite encouraging (though it's what I expected).

Anyway, the question that intrigues me most regarding perqs is just what
Mangone's perqs were -- and what sort of perqs current DCU officers get.
I realize that cannot be answered in public, but I trust it's something
the Board will eventually get around to.  While compensation needs to be
competitive with the industry, I strongly feel that the bulk of the
compensation that company officers receive should be salary, not perqs.

	Enjoy,
	Larry

	The trip to the CUES seems reasonable. The trips to
	Bermuda do not. Payment by DEFCU for family travel
	expenses does not seem reasonable either.

	I don't care what other credit unions do. I care about what
	DEFCU does.

	Thanks to the new board for researching this, and for
	considering changes to prevent this from recurring.

					Tom_K

    Following the similar guidelines as those DEC uses for education and
    travel would seem reasonable to me.

There is a proposal now before the NCUA to allow large credit unions to
pay for CU volunteer personnel's spouses' expenses to go to conferences. The
rational is that since the BoDs can't be paid, paying spouse expenses is one
way to "encourage" quality personnel on the board. However, full disclosure is
required at the annual meeting if this is done. Previous to this I don't
think there was any rule about it but I could be wrong. While I disagree
with DCU paying for some family members for the trips and for paying for
offsite meetings in Bermuda, I believe the previous board was within their
rights to do so.

>	The rational is that since the BoDs can't be paid, paying spouse 
>	expenses is one way to "encourage" quality personnel on the board.

	I see the point of this but two things are worth noting:

	Given that there were >40 applicants for board positions in the
	most recent election, it would appear that this is not currently
	a problem.

	This does nothing to encourage unmarried members to participate.

					Tom_K

    re .9
    Paying spouse expenses seems allowable to me, as long as:
    	1) There is full disclosure.
    	2) It is only while accompanying a BoD member to a 'major'
           conference (definition of 'major' is TBD)
    	3) Happens relatively rarely (i.e. once a year)
    
    Peter

No, don't do it -- the inequities are insurmountable.  What about single
Board members: should they be allowed to bring an SO?  What about married
members whose spouses work, and cannot get a vacation during that period?

I'm all in favor of a reasonable set of perqs for Board members.  But they
need to apply relatively evenly to the Board members -- as well as having
a reasonable price tag per usage.  I don't think this proposal qualifies.

	Larry

It would seem to me that given the shape the entire banking/S&L/CU industry is
in, the last thing we need to be doing is inventing more perqs for the BoD.

And, as noted previously, just because other CUs (which may be in the process of
going under) do something, doesn't mean that our CU has to follow suit.

I'm adamantly opposed to subsidizing the accomodations/travel of family
members. I'm not even particularly in favor of covering expenses for Board
members to travel to remote locations unless their attendance is mandatory.
In such cases it should require approval by some other body, such as the
supervisory board or whatever they're called, although I'm not sure
even that is sufficient.

-Jack

�	Given that there were >40 applicants for board positions in the
�	most recent election, it would appear that this is not currently
�	a problem.
    
    Well, this last election seemed to be the exception.

I would tend to agree. While no particular conference is mandatory, going
to some conferences is a good idea. That was Chuck's point that the board
spent less on conferences than other similarly sized CUs.

In fact, I'm going to one next week in Boston and will be posting a trip
report when I get back. No, I'm not staying in a hotel there. :-)

    I believe in some conference travel for BoD members to keep them up to 
    date in the job we expect them to do for us. It is just plain and simple 
    good business practice to be up to date on what your competitors are doing!
    
    On the other travel issues, like spousal travel and offsite meetings of
    our BoD, I feel strongly that policies should be followed that are
    similar to policies within DEC, ie, spouses can go along, but not be
    subsidized by DCU, and there is no reason for distant meetings of our
    own BoD when just as much can be accomplished by local meetings. If
    compensation becomes a real issue, as perhaps it should be, then let's
    consider a fixed annual stipend that is controllable, and equitable across
    the "board".
    
                                                     Norm

    Stating the obvious, but the fact that Mangone was sending the BoD out
    for training and could then run the participation loans by them does
    not say a lot for the quality of training they got but does indicate 
    something of what Mangone thought of BoD training.  That is, he was
    apparently in no fear that the training would make the BoD any less
    gullible.  In the end, I suppose the BoD needs to determine what it
    needs for training.  I'm highly suspicious of doing things a certain
    way simply because it is common practice.  Surely $20K per event can
    bring in some of the best consultants to the GMA to train not just the
    BoD but also other DCU officers.  Besides, being on the BoD is not a
    lifetime commitment.  I should think that "training" would be done with
    an eye to how long one will be on the BoD and will be able to pass any
    benefit on to successors.
    
    Steve

>  Besides, being on the BoD is not a
>    lifetime commitment.  I should think that "training" would be done with
>    an eye to how long one will be on the BoD and will be able to pass any
>    benefit on to successors.

	True, but even a job at Digital is not a life time commitment and
	Digital spends a lot of money on training anyway. *And* pays a salary.
	Even without the Masters degree Digital paid for me I suspect that 
	Digital spent close to what the DCU spent on those training trips in
	several years.

	Of course the training does have to be looked at closely for benifit
	but don't not do it just because someone may only be on the board a
	couple of years or a year more.

			Alfred

>        1985   Bermuda off-site meeting			$20,089.92
>        1986   Anaheim California conference		$15,425.02
>        1987   Bermuda off-site meeting			$16,386.78

It would be interesting to understand how many people went to each  meeting
and what the average cost per BOD member/DCU employee was.

I have no problem with 1 or 2 people going, maybe even 3.
Family members for free? No way.

Training yes, boondoggles - NO.

	- mark

    	RE: .20
    
    	While it may be 'interesting', I think it will only be possible to
    determine if each person that went disclosed who went with them. 
    
    While there is a strong and valid argument to have Directors and
    management attend conferences, there is an unstated assumption that
    those be valid, professional conferences given by a third party
    (usually a trade association).  There is no justification IMO for
    'woods meetings' at remote locations.  If there are topics of interest,
    the speaker(s) should be brought to DCU HQ.  If I need to work on my
    tan (and I do) or golf game (don't play) then I can do it on my time and 
    money.
    
    I completely reject the idea of perqs or payment for serving on
    the Board.  It is a VOLUNTEER position.  People should do it because
    they WANT to do it, not because there may be an opportunity for
    personal benefit.  Just my opinion, your mileage may vary.
    
    	From note 484:
    
Regular Monthly Meeting
2-June-1985			E. Anderson, G. Herman
9:00AM - 1:10PM		        J. Lawless, C. O'Brien, S. Shapiro
Southhampton Princess Hotel	M. Steinkrauss (R. Mangone)
Bermuda

Regular Monthly Meeting
17-June-1986			D. Infante, G. Herman
5:25PM - 6:25PM		        J. Lawless,  S. Shapiro
Disneyland Hotel		M. Steinkrauss (R. Mangone)
Anaheim, California

Regular Monthly Meeting (1)
25-June-1987			G. Herman,  S. Shapiro
8:45AM - 11:30AM	       	D. Infante, J. Lawless, C. O'Brien
Elbow Beach Hotel		M. Steinkrauss (R. Mangone)
Bermuda
    

I glanced at the raw data but didn't make an accurate mental note. Most if
not all the board members went on the trips. Some
board members came alone, some brought one or two family members. There
were some DCU employees too, don't know how many. To the point of your
question, there were lots more than just a couple of people who went.

However, these trips are in the past and we really can't do much about
them. The board had the right to approve the trips. You and I in retrospect
may not approve, but it is water under the bridge.

I expect that the current board will put together a policy addressing
the issue of attending conferences.

>However, these trips are in the past and we really can't do much about
>them. The board had the right to approve the trips. You and I in retrospect
>may not approve, but it is water under the bridge.


	Right. It was an emotional issue, and we wanted to know. Now we
	do. Thanks for finding out. 

	Now, that disclosure is made, I hope others will join me in 
	considering it history, and moving on.

					Tom_K
	

    It is now only history, now that the information has been revealed.
    
    Until the information was revealed, it was part and parcel of the
    previous board's failure to communicate.  I also believe that the DCU
    paying for the trips was inappropriate, even if no rules were broken.
    The BoD members knew full well that Digital would not have paid for
    family members' transportation.

re: perqs for board members...

I do not understand the notion of offering perqs to board members in return
for their service.  The fact that the NCUA seems willing to try to recognize
such a notion is beyond me...

Given that Credit Unions are member-owned and operated establishments, I would
assume that only those members willing to put in the necessary time and
energy would bother volunteering to stand for election.  That a board member
would expect anything more than (a) the thanks of the membership for a job
well done, (b) some valuable experience, and (c) a good plug on the resume :-),
doensn't make sense to me.

I'm glad to see data like the Bermuda trip, etc. coming out in a public
way.  This is a clear demonstration to me that our board is trying to
increase communications with the membership, and that they working FOR
all of us.  Thanks folks!

./chris

�That a board member
�would expect anything more than (a) the thanks of the membership for a job
�well done,
    
    As a board member of a couple of other organizations, believe me, I
    don't even expect that.

>�That a board member
>�would expect anything more than (a) the thanks of the membership for a job
>�well done,
>    
>    As a board member of a couple of other organizations, believe me, I
>    don't even expect that.

    Ditto. Expecting the thanks of the membership does seem a bit
    optimistic. My experience, on other boards, is that a few members will
    notice and appreciate your work. But not as many as will give you a
    hard time for "screwing things up."

    			Alfred

    Re .many:
    
    I think it is appropriate for the DCU to pick up REASONABLE costs
    associated with training its BoD members.  While the BoD should remain
    uncompensated, it's also not reasonable to expect them to pay for the
    privilege of serving.
    
    Boondoggles to exotic places don't sound "reasonable" to me.  I have no
    doubt that certain conferences that can be of value to BoD members are
    intentionally sited at vacation destinations, but that doesn't justify
    sending the entire board (and spouses) on a spree.  Common sense must
    prevail.
    
    I would like to think that even without any changes in official policy
    the current BoD is responsible enough to steer clear of the apparent
    excesses of their predecessors.

    Is there any cost info on training or seminars ONSITE?  I wonder what
    the cost difference would be.

    If the cost is close (my def of close is 25%), I would have no problems
    with offsite.  It is nice not to have to worry about personal problems
    while getting training.

    Jim Morton

    Since the Board is establishing a policy, I would like that policy to
    be commensurate with the policy of Digital Equipment Corporation.

    	I was wondering why the data published is till 1987 ? Did these
    numbers went up considerably later on ?
    Abhijit

That's when the trips occurred. They didn't go anyplace exotic in the last
several years.

I feel that a written policy is important to have, not so much for now, but
for when we're all gone and who knows who will be on the board in 10 years.

>That's when the trips occurred. They didn't go anyplace exotic in the last
>several years.

	Oh, I wouldn't say that... 

From 484.0:

Regular Monthly Meeting (2)
17-June-1988 
Jared Coffin House, Nantucket


Special Educational Meeting (3)
8, 9, 10 June 1989
Samoset Resort, Rockport Maine



	However, I am willing to believe that the costs incurred subsequent
	to 1988 were substantially less than in the years for which the 
	figures were provided...


						Tom_K

OK, so they went to *interesting* places, not *exotic*. :-)
I didn't ask for these costs, but I'd agree. I'd expect the costs to be
much lower since there was probably no airfare involved. I'd prefer not to
bother DCU for the accounting of these since it's more water under the
bridge and we already got accountings of the more interesting trips.

	Right, we now have, substantially, the info we wanted. Thanks
	for getting it.

				Tom_K

    I am not an avid user or reader of notes - so please bear with me...
    
    We had a DCU BoD/Management that performed poorly, took these (monthly)
    trips to DisneyWorld and Bermuda for 1 hour meetings while they all 
    ( probably ) lived around the Greater Maynard area. There is a lawsuit 
    pending on embezzlement of funds ... and we have people saying that it is
    all water over the dam...let's forget about it !
    
    Secondly we were looking for the avove information. Now that we have the 
    information what do we plan to do about it?
    
    In any other institutions these excesses would have been disallowed and
    funds returned to the institution.....
    
    Regards,
    
     

    "Disallowed" by whom?  The BoD can approve its own rules. The only
    recourse was to get rid of the old BoD, which was accomplished.
    
    I suppose we could send the IRS a note asking whether the trips were
    declared income on the BoD members' personal income tax returns, but I
    don't recall what the rules were then, and it has been more then 7
    years in any case.

Re: .37

The trips weren't monthly. They were once per year for a few years.
And I suspect they did more than a simple meeting but I wasn't there.
And the Disneyworld trip was for a credit union conference.

I don't regard what they did as embezzlement. Embezzlement means to me
illegally pocketing funds. I have seen nothing that would indicate that
the old board did this. I regard what they did as poor judgement. But
they were within their rights as board directors to do the trips and
therefore the trips were not illegal. They were able to get away with
it because the DCU membership in general (myself included) didn't have
any reason to critically look at the management of DCU until the
Mangone thing.

I don't think there ever was a goal to do anything with the information,
at least in my mind. The information became a big deal because the old
board would not release it. I think all requested information should
be released unless there's a specific reason why we can't (confidential
information, etc.).

The information does show that it's critical that none of us take the
management of DCU for granted again. I encourage everybody to continue to
stay involved over the long haul. If you don't there's always a danger that
over the years, the management of DCU could slide back into what it was
before. It's up to us to keep that from happening by continuing to be
interested in our credit union.

The Elbow Beach thing was bad judgment, and indicative of an overly cozy
relationship between Board and President.  I think most members are inclined
to forget about the travel money involved.  Peanuts, anyway.  At least
relative to other things our new Board _might_ be spending its time on,
such as collecting on the old Board's bond.

In the end what was intolerable was that our old Board wasn't forthcoming
with their bosses.  That got them fired.

    
    These "meetings" may indicate a pattern of behavior.
    I would make sure that this information were made available
    to any agency currently involved in investigating any wrong
    doings by any particular party associated with DCU.
    I would not want the present board to be party to charges
    of withholding evidence.
    
    cbc