Board Member Duties and Responsibilities
Each member of The District Credit Union (“Credit Union”) Board of Directors (“Board”) is
elected by the membership to serve a three-year term; or, a remaining term of a previous
director. The Board sets the general direction of the credit union and oversees management in
the operations of the Credit Union. The Board shall be responsible for the general oversight and
final decision-making authority over the affairs, funds and records of the Credit Union in
accordance with applicable law, the articles and the bylaws.
Directors must always focus on the best interests of the membership as a whole. Credit unions
are not-for-profit cooperatives designed to provide financial services to their member-owners.
As such, a credit union’s primary purpose is not to seek the biggest possible profit or return on
assets (ROA); nor is it appropriate to seek asset growth just for the sake of growth. The primary
purpose of a credit union is to provide quality, low-cost financial services that the members
- Make strategic decisions in conjunction with the other Board members regarding the course of action for the Credit Union by establishing goals, objectives, formulating policies and approving services.
- Review all policies annually.
- Hire, monitor and evaluate the CEO.
- Approve pay practices and benefits for Credit Union staff with guidance from management.
- Participate in committees as appointed by the Board chair.
- Ensure Credit Union meets all federal and state regulations and guidelines.
- Maintain, review and update Credit Union bylaws.
- Maintain the confidentiality of all Credit Union business and information received.
- Attend and actively participate in monthly Board Meetings and the Annual Strategic Planning Session.
- Administer the affairs of the credit union fairly and impartially and without discrimination in favor of or against any particular member.
- A Board Member must carry out the duties in good faith, in a manner reasonably believed to be in the best interest of the membership, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.
- Thoroughly review Board information prior to each Board Meeting.
- Fulfill yearly educational requirements (see Education Requirements)
- Be aware of state and federal political issues regarding the credit union movement.
- Disclose possible conflicts of interest and refrain from voting on issues related to the conflict.
- Attend monthly Board meetings (see Required Meetings)
Basic Financial Skills Required
The board of directors of a federal credit union is charged with the general direction and control of the institution. Credit unions, however, are not like many other commercial entities in that they do not produce observable physical goods or services. Instead, credit unions receive deposits from the membership and, in turn, lend or invest these funds. The key measure of the credit union’s success or failure is its financial statements. As such, a director must understand these financial statements to participate in a meaningful manner in the direction and control of the institution.
Accordingly, to be an effective director, an individual must have a certain base level of financial skills, consistent with the size and complexity of the credit union operation they serve. At a minimum, directors must have the ability to read and understand the credit union’s balance sheet and income statement. If directors do not have the requisite skills when elected or appointed, they must obtain these skills in a timely manner, as discussed below.
What a Director Should Know
At a minimum, a director should be able to examine the credit union’s balance sheet, income statement and be able to answer the following questions:
- What does this line item mean?
- Why is it important to the credit union?
- Is the value of the line item changing over time? If so, what does that change (either positive or negative) mean?
- Is the change important to the credit union?
A director must understand the specific activities in which his or her credit union engages. In particular, a director must understand not only how these activities generate revenue for the credit union but also, and perhaps most importantly, the various risks associated with these activities that could lead to financial loss.
To do their job in a meaningful manner, it is essential that directors understand the risks found in depository institutions — that is, credit, liquidity, interest rate, compliance, strategic, transaction, and reputation risk. Moreover, directors must understand the internal control structures at the credit union that limit and control these risks.
- Monthly Board Meeting – currently held on the fourth Tuesday of each month at 6pm at The District Credit Union primary branch at 751 Chambers Rd, Aurora, CO. Meetings are in-person once per quarter, and the other two held virtually. If more than two meetings are missed, the Board Chairperson will contact the Board Member to discuss absenteeism.
- Annual Meeting of the membership, which takes place in April or May.
- Annual Planning Session for the rolling three-year business plan.
- Other assigned committee meetings: generally held at our primary branch, but could be virtual. Meetings vary depending on the specific committee.
- Exit reviews by examiners are not required, but attendance is highly recommended.
Board Member Qualifications:
- Must be a member in good standing with The District Credit Union.
- Must be at least 18 years of age.
- Must be bondable.
- Must authorize a criminal background check and credit check.
The District Credit Union carries Directors’ and Officers’ Liability Insurance. This policy protects the District Credit Union’s directors, volunteers and employees from liability arising out of their duties performed for the District Credit Union.