Establishing the New Merged Board
By Rodrick H. Chatt
As John Bommarito has discussed, each had Boards of nine members. I was the chairman of the TRW Systems FCU Board. Everyone on our Board agreed that the merger would be in the best interests of the credit union members. So one of the first things I did early in the merger discussions was to put the following to our Board members: Should we be willing to put aside our own egos to accomplish the merger, and if so: 1) What would the ideal size of the new Board be? 2) Are you willing to resign from the Board to accomplish the merger? and 3) Are you willing to serve on the Board of the new credit union?
I received complete cooperation from the Board members with respect to these questions. I then asked each Board member to submit to me an unsigned letter of resignation, and each promptly did so.
Everyone pretty much agreed that the new Board should have 11 members, at least to start. When the chair of Western and I sat down together, he promptly volunteered that our credit union could have the Chair of the new Board, plus five seats, and that his credit union would have the Vice Chair and six seats. We quickly agreed on this point. At the next meeting of our TRW Systems Board, we discussed which four members should resign.
A month later the members of the new Board met. I was elected Chair, and the Chair of the old Western was elected Vice Chair. We resolved that we would not fall into such talk as “This is the way we did it at the old credit union” but rather to work hard at thinking of ourselves as leading a new credit union. Later, through attrition we reduced the Board to nine members.
Through this whole merger process, we believe we learned that there is no one way of working through the governance issues of a large merger, and that every credit union operates best in a manner that fits its members and the psychology of its Board.
