C. Myblog

Bits And Bites For The Board

April 26, 2012

NCUA’s new rule on interest rate risk emphasizes board-approved policy and oversight by the board.  The board is also responsible for setting strategic direction.  With the speed of change the industry has experienced lately, keeping board members apprised of all that’s happening has become more challenging than ever.

Board meetings typically focus on the day-to-day business of the credit union and review of financial results with very little time spent looking forward or learning about industry issues.  Why not take a bit of each board meeting and purposefully devote some time to strategic issues and education?  While formal board education and planning sessions are crucial, regular discussion on these topics can help keep the board moving in the direction that NCUA requires.

Boards share the ultimate fiduciary responsibility for credit unions and equipping them with the tools they need to make informed decisions is critical.  It’s a little bit like sneaking vegetables into the spaghetti sauce, but small, regular doses of education and strategy can go a long way toward healthy boards and credit unions.

Showing 2 comments
  • Carolyn Warden

    I agree with your posting, though my experience working with Board of CUs, as well as for & non profit organizations amplfies my intensitt on how Board meeting time should be spent.

    Because Board’s have responsibility for the trategic direction of their credit union why not spend 45 minutes of very hour discussing what they can or might change? Time spent discussing what has already happened and cannot be changed is, frankly, wheel spinning.

    Yes Directors must understand the current financial & operational position of the CU from a 10,000 foot level, and Risk Management Protections from the 2′ level – or however far it is from their eyes to the page or screen. Spending time talking about what directors already have the competence to understand isn’t HELPING. (If there are directors who need help understanding the contents of the board reports that’s best one off-line where there will be embarassment admitting what one doesn’t yet know.) Board Meeting time is about moving the organization forward.

    What do you think?

  • c. myers

    Yes, we definitely agree that board time should be spent moving the organization forward. Although boards vary from credit union to credit union, we have noticed that high-functioning boards invest time and energy strengthening areas that are weak and reinforcing areas that are strong. Just imagine what might be accomplished if boards really did spend the lion’s share of their time thinking about strategic issues?

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