Chapter 1 » Structure of the Board The Board of Directors Role as a Director Credit union directors are elected During board meetings, you share by the general membership. A person in the responsibility for the credit must first be a member of the credit union’s future. You contribute to set- union to run for a board position. The ting policies, approving budgets and election may take place at the credit all the other board functions that help union’s annual meeting or balloting guide the credit union. may be accomplished electronically In board deliberations, you must or by mail with the results announced put on your director’s hat. You are Now that you’ve at the meeting. Your credit union’s expected to make decisions that are been elected to the bylaws specify the terms of office and good for the credit union and for the the election procedures. members as a whole, regardless of how board of directors, The average credit union board has those decisions affect your personal seven members, according to a survey situation. For example, your savings in you have two by Credit Union Director’s Newsletter. the credit union or your plans to take roles at the credit The following is true for federally char- out a loan should not affect your judg- tered credit unions: The board must ment about rates. union—director and number at least five directors and no You also wear your official hat when more than 15. The board must have an the board grants you authority to work member. odd number of directors. The mem- on its behalf. For example, the board bers of the board all serve the same could give you authority to disburse length of term. This can be either two funds, invest funds, or sign contracts. years or three years. Terms are usually In doing this, you are acting as an staggered so that about an equal num- agent of the board, not as a member of ber of directors are elected each year. the credit union. If a vacancy occurs between elections, Your power as a director is restrict- the board appoints someone to fill the ed to those two situations: taking part position until the next regular election. in board meetings and acting on the board’s behalf as its authorized agent. Dual Role In all other situations, you have no Now that you’ve been elected to special power or authority in the credit the board of directors, you have two union. roles at the credit union—director and member. It’s important to keep the two Role as a Member roles separate and to understand the When you conduct personal busi- distinct differences. ness as a credit union member, you have the same power as any other member, no more and no less. You are BOARD OF DIRECTORS: DUTIES AND RESPONSIBILITIES 3 Chapter 1 » Structure of the Board not entitled to better service or bet- detail the duties of the executive offi- ter rates than other members. Never cers. See figure 1.1 for a summary of apply pressure on staff to give you these duties. While different titles may special favors. If you are dissatisfied be used, the general responsibilities are with a product or service level, work as follows. for change through the board, which has the authority to make changes on Chair behalf of all members. The chair (sometimes known as the board president) presides at all meet- The Federal Credit The Monthly Meeting ings of the board and at all meetings The Federal Credit Union Act of the credit union’s members. Other Union Act requires requires the board to meet at least once general functions of the chair are to maintain an effective board, to serve the board to meet a month at a time and place agreed on by the directors. A meeting may be as liaison between the board and the at least once a held by conference call or videoconfer- management of the credit union, to make sure meetings are productive and month at a time encing if it is inconvenient to assemble at one place. However, at least one all directors are heard, and to serve as a and place agreed meeting per year must be conducted spokesperson of the credit union. The in person. The board chair, or in the board may designate additional duties on by the directors. chair’s absence, the vice-chair, may call to the chair as long as these duties fit a special meeting of the board at any within the boundaries of the Federal time and must do so at the request of a Credit Union Act. majority of directors. Vice-Chair Board Appointments The vice-chair exercises all the The board appoints the members duties of the chair in his or her absence of the supervisory committee. When or when he or she is unable to perform vacancies arise on the credit commit- them. There may be more than one tee or supervisory committee, they are vice-chair, in which case ranks may be filled by a vote of the majority of the attached to the title. directors then holding office. (This applies to federal credit unions.) Treasurer In a small credit union, the board The Executive Officers treasurer may serve as manager of The executive officers are the leaders the credit union and receive a salary of the board of directors. The officers for this work. In a federally chartered may serve as an executive commit- credit union, the treasurer/manager’s tee to deal with issues between board duties include: meetings. Most boards have a chair, a • having custody of all funds, secu- vice-chair, a secretary, and a treasurer. rities, valuable papers, and other The credit union bylaws spell out in assets of the credit union; 4 BOARD OF DIRECTORS: DUTIES AND RESPONSIBILITIES Chapter 1 » Structure of the Board • providing and maintaining full days after each meeting. (The supervi- and complete records of the assets sory committee should receive a com- and liabilities of the credit union plete copy of all the board minutes.) in accordance with federal laws The secretary also prepares meet- and regulations; ing notices and performs other duties • preparing and submitting to the as notified. A staff person may be board a monthly statement of the appointed as recording secretary of a credit union’s financial condition, meeting. In this case, the staff person and also posting it in a conspicu- prepares the minutes and the board ous place in the credit union’s secretary approves and co-signs the office; documents (along with the recording • ensuring that financial and other secretary) before distributing them. reports required by the National As owners, members have the right Credit Union Administration are to know about the condition of their prepared and sent; credit union. A federal credit union member has the right to inspect the • hiring and discharging credit credit union’s books and records, union employees. including the board of directors’ min- In most credit unions, however, utes. The inspection must be made in the board hires a separate manager to good faith and for a proper purpose, carry out these duties under the direc- such as trying to determine the finan- tion of the board or the board trea- cial condition of the credit union or surer. Managers typically have the title the manner in which the credit union’s of credit union president or president business is conducted. The inspection and chief executive officer. cannot be to satisfy mere curiosity or for vexatious purpose. Secretary Before making minutes and records The secretary prepares and main- available, the credit union must delete tains complete records of all meetings any confidential material that identifies of the members and the board. Min- the transactions of, or personal infor- utes should be prepared within seven mation about, other members. Profile of a Director What qualifies a person as a com- petent credit union director? Candi- dates for the board of directors must be credit union members. In addition, they should be committed to the suc- cess of their credit union and inter- ested in credit union affairs. At least four other factors clearly Polka Dot/Thinkstock contribute to the director’s perfor- BOARD OF DIRECTORS: DUTIES AND RESPONSIBILITIES 5 Chapter 1 » Structure of the Board mance: background or experience, examples of forward thinking in their technical knowledge and ability, job performance or other areas of their forward thinking, and enthusiastic sup- lives? People who consistently cling to port. the past and defend or yearn for the way it used to be will hamper the credit 1. Background union’s growth and responsiveness to The first refers to board candidates’ the membership. general experience and education. Have they worked previously with 4. Enthusiastic Support credit unions? What experience have Are the candidates active members they had in other businesses, coop- of the credit union? Do they use all the eratives, or financial institutions? Are services? Are they enthusiastic about they familiar with the credit union’s the credit union’s philosophy and pur- memberships, and do they understand pose? Are they excited about serving the members’ particular service needs? on the board and serving the mem- These are the types of questions to bers? These are questions to consider ask about a potential director’s back- because directors are role models to the ground. membership. If elected officials are not enthusiastic supporters and users of 2. Technical Knowledge the credit union, how can they expect Technical expertise is another con- others to use it? sideration.