NCUA Clarifies Role of Board and Top Executives at FCUs
The boards of federal credit unions can delegate hiring, firing and compensation functions to the executive committee and, within limitations, to the CEO.
That was the opinion of NCUA General Counsel Robert Fenner in a letter responding to an inquiry from NAFCU General Counsel Carrie Hunt. Fenner explained that the Federal Credit Union Act and the FCU Standard Bylaws give boards the right to delegate these functions to the executive committee. Those committees must have at least three members, all of whom are on the board.
He added that the board can delegate personnel functions to the CEO, except those regarding his or her own compensation or disciplinary acts against him. But Fenner noted that if the board gives CEOs such authority, it should “place appropriate standards and controls on such delegated authority.” He added that this is especially relevant to larger, more complicated FCUs.
Hunt’s inquiry was prompted by the NCUA’s recent letter on the duties of directors at FCUs and a section in which the agency wrote that while an FCU board can delegate certain personnel-related functions to senior management, it must hire, fire, determine duties and set compensation for senior management. Fenner wrote that this wasn’t a new policy but a restatement of existing policy.
To read Fenner’s letter to Hunt, go to: http://www.ncua.gov/News/Express/xfiles/11-0221.pdf
To read the original NCUA letter to FCUs, go to: http://www.ncua.gov/letters/2011/FCU/11-FCU-02.pdf