Directors Gain New Rules of the Road From Consultants
Consultants seem to agree that governing a credit union has become more daunting. And the trend toward greater board accountability isn’t likely to go away.
Dan Clark of Dan Clark Associates noted the impact of NCUA Reg. 701.4, which mandated financial literacy training for board members. Board members have always been required to be informed and educated enough to take good care of a company. Most nonprofits get away with recruiting one financially savvy board member, and the other directors look to that person to determine whether the organization is in good financial shape. Now every credit union director needs a working knowledge of financial issues, he said.
He indicated many governance models are available to help boards. People are looking for best practices in governance, and there is more sharing of ideas. Directors listen more, and they look more closely at governance than in the past. He sees a much greater knowledge base among directors. Some of that has happened through more education for board members.
At the same time, Walker added, “Vulnerability concerns people more. Regulators and regulations continue to focus on boards, holding them more accountable. I don’t see any end to that. Among the membership, there’s beginning to be a greater sense of their voice within the credit union.”