A new report presented at the International Summit of Cooperatives in Quebec explores the importance of the monitoring and control function by board members of credit unions.
The paper is authored by Sylvie Guerrero, Marie-Ève Lapalme, Olivier Herrbach, and Michel Séguin of the University of Quebec at Montreal.
The research took into account board members’ personality, the importance they give to the monitoring function and their identification with the shareholders. Based on how strongly they identify with shareholders, board members will have different perceptions of the importance of their own monitoring and control function, argue the authors.
They define “conscientiousness” as “an individual’s propensity to be dependable and to strive for achievement. The report explains how conscientiousness is related to characteristics such as persistence, effort and responsibility.
The paper argues that board members’ conscientiousness is related to monitoring behaviours in accordance with their perception of the importance of that function. The relationship is also influenced by board members’ identification with the shareholders, argues the report.
To test the hypothesis, the researchers contacted the regional networks of a large Canadian credit union corporation and involved three regional networks of credit unions. A total of 166 participants took part in the survey.
The questionnaire for directors included questions about conscientiousness, identification to the credit union owners, and their perceived importance of monitoring activities in directors’ role. The chairs of the boards also filled in a questionnaire designed to measure directors’ monitoring and control behaviours.
In terms of practical implications, the paper argues the findings prove it could be desirable to have board members who are high in conscientiousness. The study suggests looking for potential board members who have occupations and other features that are more likely to be associated with high conscientiousness. However, the report also points out that high conscientiousness is negatively correlated with the ability to adapt quickly to environment changes.
- For more of our coverage of the International Summit of Co-operatives, visit thenews.coop/summit.
