Why Credit Union Boards Must Take the Lead on Cybersecurity

As cyber threats grow more sophisticated, frequent and damaging, credit unions face a new reality: The board of directors must play an active role in cybersecurity oversight. This shift is not optional. The NCUA and other regulatory bodies have made it clear that cyber risk must be addressed at the highest levels of leadership.

Historically, cybersecurity was considered a back-office function best left to the IT department or outsourced vendors. But today’s landscape has changed dramatically. Threat actors are targeting financial institutions with increasing precision, and the stakes have never been higher. A single cyber event – whether a ransomware attack, phishing breach or third-party vulnerability – can bring operations to a halt, erode member trust, and result in serious financial and reputational losses.

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In this context, credit union boards have both a responsibility and an opportunity to lead.

Cyber Risk Is a Boardroom Issue

The idea that cybersecurity is purely a technical issue is outdated. In reality, it touches every part of a credit union’s operations, from member services to compliance, finance, human resources and branding. Effective cybersecurity requires strategic direction, proper funding, strong policies and a culture of awareness, all of which start at the top.

There are several compelling reasons why board-level engagement in cybersecurity is essential.

First, informed board oversight significantly improves risk mitigation. Directors who understand the threat landscape can help prioritize and resource risk-reduction strategies. This means making informed decisions about cyber insurance, business continuity planning, and investments in detection and response tools. Without board support, these efforts are often underfunded or reactive.

Second, credit union boards play a critical role in regulatory compliance. The NCUA has increased its scrutiny of cybersecurity preparedness, requiring credit unions to demonstrate that they have governance frameworks in place to manage cyber risks. This was articulated specifically in the NCUA’s Letter to Credit Unions 24-CU-02 (issued October 2024) entitled Board of Director Engagement in Cybersecurity Oversight.

Regulators are no longer satisfied with seeing IT policies on paper. They want to know how the board is involved, how risk is being measured and reported, and how oversight is being exercised. Cyber governance is now a requirement, not a recommendation.

Cybersecurity is also intrinsically linked to strategic planning and resource allocation. Whether launching a new digital platform or evaluating core system vendors, cyber risk must be factored into every major decision. Boards that engage in regular cybersecurity discussions are better positioned to align technology investments with long-term business goals and ensure that risk is properly managed from the outset.

Finally, visible board engagement enhances member trust. Members want to know that their personal and financial information is being protected. When boards demonstrate leadership in this area, it reinforces the message that security is a top priority. In an era of high-profile breaches, this kind of assurance can be a powerful differentiator for credit unions competing on service and trust.

Assessing Board Readiness

While many boards understand the importance of cybersecurity, fewer have taken concrete steps to assess their readiness. Conducting a board-level cybersecurity governance assessment is an important first move that can uncover critical gaps.

These assessments should be comprehensive and tailored to the institution’s size, complexity and risk profile. Key components include interviews with board members to gauge awareness, roles and perceived responsibilities in cybersecurity oversight and a review of governance policies to determine whether cyber risks are adequately integrated into board charters, committees and reporting structures.

Also, custom training programs can build foundational cyber literacy among directors, helping them ask the right questions and interpret risk metrics, and strategic recommendations and reporting go beyond compliance checklists to offer actionable improvements to governance practices.

The goal is not to turn board members into cybersecurity experts, but to ensure they are educated, engaged and empowered to oversee this critical area effectively.

The Value of Independent Insight

To get a clear, unbiased picture of cybersecurity governance maturity, many credit unions benefit from engaging independent third-party specialists. External consultants bring a fresh perspective, benchmark performance against industry standards and help boards focus on the most material risks.

Importantly, a good advisor will tailor insights to the specific needs and culture of the credit union. What works for a billion-dollar institution may not be appropriate for a smaller community-based credit union. Independent support ensures that oversight is not only sound but scalable and sustainable.

Leading From the Front

Cybersecurity governance is not just a regulatory box to check. It’s a defining element of modern financial leadership. As cyber threats continue to evolve and member expectations rise, credit union boards must adapt quickly and confidently.

The board’s role in cybersecurity is about setting the tone from the top, holding management accountable and integrating cyber risk into every facet of governance. Institutions that take this seriously will be better prepared not just to respond to incidents, but to prevent them altogether.
For credit union boards, the path forward is clear: Assess readiness, invest in education, strengthen oversight and lead from the front. Because in today’s environment, cybersecurity is everyone’s responsibility – but it starts with the board.

Christopher Salone is a Director with FoxPointe Solutions, the Information Risk Management Division of The Bonadio Group, a CPA firm based in Pittsford, N.Y.