The Board of Director's Role

One of the differences between a credit union and other financial institutions is that credit unions operate under the general direction of a board of directors who volunteer their time and expertise opposed to board members of a bank who are paid. These volunteers contribute the skills from their business backgrounds and life experiences to guide the long-term strategic planning for the credit union to successfully serve its members. Their duties and responsibilities are based on the credit union bylaws and federal charter. Following are some of these responsibilities.

Primary Duties and Responsibilities

The board is responsible for maintaining the general direction and control of the credit union. This includes ensuring that the credit union fulfills its key purposes as described in the organization's mission statement. Other duties entail setting all policies that guide the affairs of the credit union, overseeing the proper implementation of these policies, ensuring the use of sound business practices to maintain its financial stability, and guaranteeing that members' needs are addressed.

More specifically this includes:

• approving major products and services proposals

• establishing loan policies regarding interest rates, security and loan maturity

• controlling interest rates on deposits and loans to members

• authorizing all deposit and investment of funds on behalf of the credit union

• authorizing all borrowing on behalf of the credit union

• appointing the credit union's supervisory committee and other committees as needed

• establishing and maintaining internal controls

• acting as an ambassador for the credit union

At the Alliance Credit Union, the goal in the selection of board members is to maintain diversity so that there is a broad representation of the membership. Volunteers are selected by the credit union nominating committee with additional nominations requested at Alliance’s annual meeting.

Education is also a top priority. For example, each board member completes CUNA's Volunteer Leadership Program for directors, which gives him/her the knowledge necessary to offer sound financial and strategic guidance; to understand the regulatory and operational environment in which the credit union works; and to learn how to work efficiently with credit union management. In addition, industry trends and perspectives are reviewed at Alliance’s strategic planning session and at board meetings to help guide the board's thought process and decision-making.

The board actively participates in its role by asking questions and generating dialogue relative to the long-term direction and development of this financial institution. As members of the credit union, the board members have a vested interest in making good business decisions on behalf of the organization. The strengths of each member of the board contribute significantly in large part to the overall success of the credit union.

Interested in Volunteering?