Board Members – What do You Know? And how do You Know You Know? ‘Ya know?
(Better Title: Governance Outside the Bowls)
Tim Harrington and Kevin Smith, TEAM Resources
Yeah, yeah, we all know (or should) … the board of directors has fiduciary duty in the operations of the credit union:
From the federal regulations:
(a) General direction and control of a Federal credit union. The board of directors is responsible for the general direction and control of the affairs of each Federal credit union. While a Federal credit union board of directors may delegate the execution of operational functions to Federal credit union personnel, the ultimate responsibility of each Federal credit union’s board of directors for that Federal credit union’s direction and control is non-delegable.
(3) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in paragraph (d).*
[*These are only excerpts that serve my purpose right now. You should know the full text.]
The board has oversight of the credit union. And the board has to know what’s going on inside the credit union in order to have proper oversight. So where are you getting your information? What do you read that tells you what’s going on? Surely you’re not hanging around in the CEO’s or the CFO’s office watching thrilling data stream across the computer screen. You get information in your packet once a month, right? (Electronically by now, I hope.)
And you read these packets. Which means you know. But how do you know, you know?
I know. I’m being obtuse. Let’s cut to the chase.
Credit union directors should have a range of feedback/reporting systems in place to ensure proper fiduciary oversight of the credit union. Your information should come from a variety of sources and should line up to paint a consistent picture. At TEAM Resources we call this “governance outside of the bowls.”