You might have seen today’s – I have to say not completely unexpected – news news that the Co-Op is up for sale.
It’s been coming for a long time.
So, you’re a director of a credit union that is still banking with the Co-Op that still has hundreds of thousands of pounds in it?
Let me ask you something …Why is that?
Is it simply that because you believe in the co-operative movement you will support it where ever you can?
That’s great, the co-operative movement has done and continues to do a lot of really very good things. But the problem is if you’d been acting on purely commercial grounds – which is the test you are required to satisfy as a director – you would probably have moved the money out of the Co-Op a long time ago.
Let me ask you, given that there’s no certainty that the Co-Op Bank can be sold, and won’t instead be either broken up or go bust, do you think you might be playing Russian roulette with your members’ money given today’s news – which after all followed a pretty inglorious few years (facts like this will be relevant to the points below, it’s not as if you’re in the dark about the Co-Op Bank’s problems or that they’ve happened overnight)?
The point is you might only have a short period of time now to get your members’ money out of the Co-Op and into something safer…
And if you don’t do so, let me ask you another question…
If your credit union should be forced under by the problems at the Co-Op Bank and your liquidator took you personally to court for negligence, would you be able to defeat such an action?
It might just be worthwhile you asking your lawyers this question… you see, your following a principle that is not built on hard commercial grounds is probably no defence.
Oh, and an afterthought… some directors of your credit union will have deeper pockets than others and will therefore be the main targets of such a negligence action. Are you one of the prime targets? You see it’s easier for board members who have nothing to lose personally to stick to their principles, but if your home and savings are on the line, then it’s a completely different proposition.