This post was originally published on ChipFilson.com.
In anticipation of the required Annual Meeting, most credit union publish their reports for the prior year. Even the NCUA issues a virtual document by April 1 with audits and details of internal processes, albeit little about the state of the industry they were created to support.
How should these documents be evaluated? Are they only the financial stewardship of members’ resources similar to any other consumer financial choices? Or should there be an assessment of the cooperative dimension in their role with members?
I have been reviewing the 2025 Annual Report and the CEO presentation of a virtual annual meeting I want to attend this week. Here are some issues I would like to see discussed by the leaders:
How did the credit union “show up” for members?
Many institutions will detail initiatives, programs, and new services deployed for members, often with large numbers. Do these efforts read like a series of programs or more like a cooperative working out its obligations to members in real time?
Democratic governance in practice
Were elections contested or director vacancies filled via board-nominated candidates by those in perpetual positions of power? Uncontested elections are common in credit unions. The governance implied by the annual meeting requirement can become perfunctory. The credit union is financially sound and service-oriented, but is this enough to be a cooperative? Has the legacy ownership structure become merely ceremonial?
Financial philosophy
Virtually all credit unions today show strong capital positions with an industry average over 11%. How have the financial metrics enhanced member well-being? Do the numbers describe the hardship members face and how the service culture responded?
A cooperative financial overview would also include—here’s what went wrong, here’s what it cost, here’s what we as an institution are accountable for, here’s what the board decided. These issues are as vital to understanding the stewardship of member funds as are the normal financial metric comparisons.
The cooperative as identity vs. the cooperative as aspiration
Annual reports will often update the founding story while celebrating current contributions and roles in the community. These past and current descriptions are real, but are they more than brand positioning? An acknowledgment that credit unions are supposed to be different in their roles with members?
Is the credit union telling what it is doing to enhance its obligations as a cooperative for members in an uneven and unequal economy?
The bottom line
There is no such thing as the “perfect” credit union cooperative. One of the advantages of the charter should be the diversity of approaches it empowers. Cooperative behavior reflects the values of the people currently running the organization. Leadership culture matters enormously.
But the integrity of cooperatives mission cannot depend on the continued presence of mission-aligned executives. That’s not a cooperative structure. That’s a benevolent institution. The difference matters enormously when leadership turns over, when financial pressure intensifies, or when a crisis demands accountability. Or when external offers arise to transfer control. And these challenges will occur. They always do.
Members who have never been treated as owners forget that they ever were. And people who have forgotten they are owners don’t rise to claim what’s theirs. They simply leave, or absorb the loss, or accept what they are told, because nothing in their experience with the institution ever suggested they had the right to do otherwise.
Being a cooperative can result in a myriad of business models. But what should be the common link is member-ownership. Does the Annual Report reflect that fact?
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