The deregulation of Australia's financial system has had a significant impact on all institutions operating within that system. Credit unions represent a small but recent high growth sector within the financial system. Not only have they been forced to re-adjust to operating under the changed environment created by deregulation, but also they have been reregulated by State Governments.
This report investigates the impact of deregulation and \ reregulation on Queensland credit unions, and whether credit union leadership has reoriented itself to meet the challenges of the changed environment created by deregulation and reregulation.
The approach taken in this report is a limited content review of traditional credit union literature followed by an examination of the effect of deregulation and reregulation on credit unions to establish the main environmental changes created. A further content review of current American and Australian credit union literature is undertaken to establish the perceived roles and responsibilities of credit union leadership in response to change. A brief content review of current literature on the broader corporate sector's view of leadership roles and responsibilities is then undertaken to identify whether leadership in the credit union sector is reassessing its roles and responsibilities in line with changes in the corporate sector.
A number of differences emerge, the major ones being the lack of broad commercial experience of directors on credit union boards, and a greater emphasis in the broad corporate sector on leadership responsibility for the implementation of corporate planning and strategy. To examine whether these differences exist in practice, a limited non-random sample of Queensland credit union chief executive officers and directors was interviewed using a Likert-type preference questionnaire and open-ended questions.
The results of the interviews generally confirmed that credit union leadership adhered to the older traditional credit union view of the separation of roles and responsibilities between directors and chief executive officers. In adopting this view credit union leadership is inhibiting credit union access to commercially experienced boards of directors and to the broad corporate sector management processes of corporate planning and strategy.
The conclusions reached in this report are that credit union leadership has not effectively responded to the changes wrought by deregulation and reregulation, and that credit union leadership must redress this potentially damaging position by:
- increasing director education
-broadening commercial experience of credit union boards
- improving the quality and qualifications of chief executive Officers
- introducing corporate and strategic planning practices within credit unions and ensuring that these processes are ongoing.