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Saturday, May 18, 2024

SECU mulls changes in board election rules

The State Employees’ Credit Union is studying changes to how it elects board members, six months after dissidents ousted three directors supported by leadership of the second-largest U.S. credit union.

The key change involves sending ballots to 2.3 million eligible members, or nearly a quarter of the population of North Carolina. SECU hasn’t mailed election ballots previously, a practice common for publicly traded companies.

Four board members are up for re-election at October’s annual meeting in Greensboro. Voting previously was done by paper ballot requested by members or at the meeting itself.

SECU’s board last year launched an electronic voting option, but only 0.5% of eligible voters took part in the election, or 13,372.

In the October 2023 election, three new directors were chosen: Michael Clements, Barbara Perkins and Chuck Stone. They defeated veteran directors Alice Garland, Thomas Parrish and Jo Anne Sanford, who were favored by SECU’s board that was then chaired by Chris Ayers, executive director of the N.C. Utilities Commission’s Public Staff. SECU’s chair is now Mona Moon, a retired former chief operating officer of the state’s Medicaid program.

The new directors were supported by former SECU CEOs Jim Blaine and Mike Lord, who have challenged the credit union board for weaker financial performance and policy shifts, particularly adding tiered interest rates tied to members’ credit scores. Previously, SECU charged the same interest on loans for all members.

SECU is considering the changes to boost member awareness of the elections, encourage participation and make it easier to vote, a spokeswoman says. The credit union’s board elections have rarely been contested since its formation in 1937.

Blaine says he favors more input from members, including voting on directors in what is likely to be another competitive contest. Whether SECU’s proxy materials provide equal treatment for candidates who aren’t favored by the current board will be critical, he says.

Blaine says his website, which includes consistent criticism of SECU leadership, averages more than 100,000 page views per month. “Mailing ballots is their best hope to avoid another ouster,” he says.

In contested elections of public companies, it’s common for proxy materials to describe board-endorsed candidates in more flattering language than dissidents. A month before last year’s election, SECU sent an email to members that publicized the three incumbent directors.

SECU emailed information about the potential changes to members last week. The board has held webinars with advisory board members and branch members to get feedback.

Changes in policies need to be made by the board 180 days before the October election, which is April 11.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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