Good Check$ Make Good Balance$
by Mark S. Brantley, Esq.
In 1803, Chief Justice John Marshall was faced with a constitutional crisis of monumental proportion. Could and/or should the U.S. Supreme Court issue an order to then Secretary of State James Madison, commanding him to deliver appointment credentials to William Marbury, a justice of the peace nominee who was appointed by former President John Adams during his last days of office?
Chief Justice Marshall, opining for the court wrote:“This original and supreme will [of the people] organizes the government, and assigns, to different departments, their respective powers. It may either stop here; or establish certain limits not to be transcended by those departments.” He further stated, “The government of the United States is of the latter description. The powers of the legislature are defined, and limited; and that those limits may not be mistaken, or forgotten, the constitution is written.”
Marshall not only answered the questions at issue, but also bolstered the constitutional governance framework we have come to know as democratic “checks and balances”—the notion that each branch of government (i.e., legislative, executive and judiciary) shares authority as defined by the Constitution, and it is that document that empowers the Supreme Court to review and ensure all three bodies are in compliance with its provisions.
Interestingly, the concept of checks and balances is also found within the credit union governance structure. A credit union possesses a governing document, known as bylaws. In essence, the bylaws are responsible for the harmonious delineation and definition of roles for each of the institution’s three distinct bodies, namely the board of directors, management and the supervisory committee.
Bylaws are the credit union’s constitution—the rules of governance. They establish the framework of the institution and spell out in clear terms the roles and responsibilities of credit union officials and staff. Without them, arbitrary and capricious decisions could rule the day and chaos could ensue.
Regardless of a credit union’s asset size, bylaws should include but are not limited to: the purpose and/or mission statement, field of membership, meeting of the members and elections, duties of the board and supervisory committee, and standing committees and their functions. NCUA has adopted and provided for credit union convenience and usage a standard bylaws model.
