A Direct Line - A Blog addressing issues and topics of interest for Montana credit union board members
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Starting with our "Welcome aBoard" post, our weekly blog addresses issues and topics of interest for Montana credit union board members. 

The Volunteer Risk Role

by Donya Parrish, MCUN

In a recent talk to participants attending the annual Volunteer Leadership Institute, National Credit Union Administration (NCUA) Chair Debbie Matz discussed the board’s role in risk for the credit union.

“You are the first line of defense against potential losses,” Matz said. “Engaged volunteers have led credit unions diligently, from recession through recovery. You have turned unprecedented challenges into enduring opportunities. With the financial crisis behind us, we need to discuss the challenges ahead, including interest-rate risk, cybersecurity, and the need for credit unions to hold adequate capital.” 

While we often focus on the board’s important oversight of compliance, financial stability, and the strategic direction of the institution, risk is inherent in all, and often overlooked. I agree with Chairman Matz that these areas warrant discussion at your meetings and focus in planning.

How do you start incorporating risk you might be asking? She gave some great examples of questions that the board could ask of management in meetings to start the conversation. On the topic of Interest Rate Risk (IRR), she suggested 

  • How is management measuring the credit union’s interest rate risk exposure?
  • What has management learned from shock testing?
  • What internal controls ensure the credit union will follow the board’s interest rate risk policy?

With these sample questions, and links to a resource page, your board should have a starting point to have a conversation at your next meeting. Overview of the credit union’s risk policies, as well as keeping that four letter word (R-I-S-K!) at the forefront of every discussion, will go a long way in keeping your board abreast of the credit union’s volatility.

Resources

Below, you'll find links to past blog posts organized (loosely) into four categories. Feel free to browse. The blogs are all fairly short and provide food for thought in the areas of directors' duties and responsibilities, advocacy, working with the CEO, and ideas for strategic planning.   

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