Board Compensation: It’s Time

By Anthony E. Steigelman

The recent “Chairman’s Corner” article by Debbie Matz in February’s installment of The NCUA Report was very enlightening. According to Matz’s article, volunteer directors are integral to the proper functioning, direction and control of credit unions. She rightfully calls it “a mighty responsibility.”

Indeed, the efforts of the volunteer credit union director have significantly grown over the past decade and there is every reason to believe that that role will increase. However, compensation for volunteer directors has not changed, at least not for federally chartered credit unions.

It’s time.

Currently NCUA expects volunteer directors to be familiar with financial statements; receive training each year to maintain their currency in the regulatory environment; discuss and establish policy for areas of operation; understand and act upon such concepts as interest-rate risk, third-party risk, concentration risk and general risk management–to include growth and mergers; expanded fields of membership; and mobile banking, among a plethora of other issues. Directors are charged with selecting the CEO, and monitoring and assessing his or her performance. And they are to do all this while ensuring the interests of the members are maintained.

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