Richard Garabedian (left) and John Gorman (right), partners for Luse Gorman Pomerenk & Schick P.C., discussed credit union board of director fundamentals at a live NAFCU webcast Wednesday.
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March 14, 2013 – Demands and expectations have expanded for credit union boards, and directors must not only be engaged and informed, but perceived as such, attorney John Gorman told NAFCU webcast participants Wednesday.
Gorman and Richard Garabedian, partners with the firm Luse Gorman Pomerenk & Schick P.C., provided webcast participants with an overview of credit union board of director fundamentals. The webcast addressed a broad range of board issues, including bylaws, fiduciary duties, director duties of loyalty and care, standards of independence and monitoring, risk management and board evaluation and succession planning.
Among the key takeaways:
- NCUA requires that credit union directors be financially literate within six months of appointment.
- Credit union directors are permitted to delegate the execution of operational functions to credit union personnel, but the ultimate responsibility for the credit union’s direction and control is non-delegable.
- Adopting a corporate governance policy is one method of providing direction on the operation of the board and its relationship with management as a supplement to the charter and bylaws.
- Breaches of duty of care are usually characterized by a failure to obtain adequate information or to give thorough consideration to a decision.
- Credit union boards should have a policy defining independence and a process for periodic testing of independence.
- Regulators are focusing on risk exposures and risk management and credit union boards must be prepared accordingly.
- The most important board responsibility is selecting, evaluating and compensating (and as necessary, replacing) the CEO.
Wednesday’s webcast is archived and will remain available for one year.
Credit unions can also learn more about board of director functions and responsibilities by attending NAFCU’s Credit Union Board of Directors and Supervisory Committee Conference, slated May 15-17 in Asheville, N.C., (an early bird discount is available until March 29) and NAFCU’s 46th Annual Conference and Solutions Expo, held July 9-13 at the Hynes Convention Center in Boston. Both conferences offer board members the opportunity to earn BSA training certificates of attendance for participating.
NAFCU also offers an online training program primarily geared towards training for board members.