Board-level checks and balances in your credit union
Supervisory committees may need to step in if a CU board doesn't follow its own conflict of interest policy
Boards need to have and follow a policy regarding conflict of interest. If a board doesn’t carry out its conflict of interest policy, the supervisory committee, which has an oversight responsibility under federal and some state regulations, may need to step in.
To fulfill that responsibility, at least one member of the supervisory committee should attend all board meetings, asserts Michael Daigneault, CCD, principal of CUES strategic provider Quantum Governance, Vienna, Va.
Federal credit unions may appoint a director to serve on the supervisory committee, but Daigneault prefers that this committee be totally independent of the board.
“One of the roles of the supervisory committee would be to point out when the potential for a conflict of interest exists, even if directors don’t agree. They may need to say, ‘You should think this through. This may be a conflict of interest for the following reasons.’”
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