Credit Union Board of Director Responsibilities
The board of directors at a credit union is made up of volunteer members who are elected by the credit union’s membership. The board is responsible for overseeing the credit union’s operations, making strategic decisions and ensuring the credit union is financially stable.
Let’s take a look at the various responsibilities of the board of directors and how they benefit the membership of the credit union.
Responsibility for the general direction and control of the credit union
The board’s primary responsibility is to establish and strengthen the direction of the credit union and oversee control of its operations. They may delegate some operational functions to management, which can include the credit union’s CEO, but the board holds responsibility for overseeing the credit union’s overall direction, such as its budget and marketing plans.
The board of directors is responsible for establishing policies for the credit union. This includes membership criteria, product pricing, account fees and cash withdrawal limits. The board of directors will also determine or approve proposed dividend rates on share savings accounts and certificates, as well as interest rates on loans and lines of credit. These policies will always be established to ensure healthy operations of the cooperative while best benefiting the financial wellness of the credit union’s members.
Monitor the credit union’s operations
While the managers and the CEO will be responsible for carrying out the policies of the credit union and for facilitating its daily function, the board of directors oversees the general operations.
Ensure the credit union operates in a sound business manner
A credit union, while not-for-profit, must be run in a way that ensures it is continually operating efficiently and producing appropriate revenue to ensure it has safe capital reserves. In addition, the board members must ensure the funds that credit union members place on deposit are adequately protected.
Hire and supervise the CEO
It is the responsibility of the board of directors to choose the Chief Executive Officer (CEO) of the credit union, oversee their performance and ensure they are managing the institution in a way that best benefits the membership.
Offer ongoing financial education
The board of directors at a credit union is responsible for offering continued financial education to all credit union members, volunteers and staff. Education can be administered in the form of online or in-person classes, e-books and more. Ongoing education helps members and staff remain well-informed so they can continue making responsible money decisions for strong financial wellness.
Administer the affairs of the credit union fairly and without discrimination
The board of directors at a credit union can never discriminate against a member due to their age, race, color, sexual orientation, national origin, disability or genetic information.
Discrimination on the part of any member of the board is generally grounds for immediate dismissal.
Advocate for and influence credit union policies with the government
A credit union board of directors may advocate for and influence credit union policies with the government in several ways:
- Lobbying. The board may hire a lobbyist or contract with a lobbying firm to represent the credit union’s interests and concerns to legislators and government officials.
- Grassroots Advocacy. The board may encourage credit union members to contact their elected representatives to express support for credit union-friendly policies.
- Political Action Committees (PACs). Credit union boards may contribute to PACs that support candidates who are sympathetic to the credit union movement.
- Participation in Trade Associations. Credit union boards may participate in trade associations, such as the Credit Union National Association (CUNA) or the National Association of Federal Credit Unions (NAFCU), which represent the credit union industry to the government and advocate for credit union-friendly policies.
- Educating. The board of directors may educate the public and government officials about credit unions, as well as the ways in which they differ from banks. They may also choose to educate others about certain policies that are important to credit union members and the overall financial well-being of the community.
« Return to "North Star News"