By Donya Parrish, MCU VP- Risk Management
How many committees does a credit union need? That is not the same as asking how many committees your credit union currently has, but committees come about for a variety of reasons, and some remain long past their intended purpose while others are required by statute or bylaws. Can you keep a good balance of usefulness and work coming from those committees without burning out the committee members on them?
A few long-term, required committees include the Supervisory Committee (aka Audit Committee), an ALCO (Finance) Committee, and the board executive committee. A credit union might have a short-term Nominating Committee (to find persons to fill open board seats) or a committee appointed to review the CEO compensation every few years. Other credit unions may create a committee for a specific project or to get members involved on a community project or product review. Regardless of the mission, each should start with a purpose and direction on expected timelines and outputs.
The board has “complete control over creating and filling board-level committees” according to the Being on the Board: An Exploration of Governance white paper from the CUNA Compliance & Risk Council. That means they should set the expectations and purpose of each committee, and also be provided reports or updates on a regular basis of the work being done. Once a committee’s purpose is complete or no longer needed, it can be dissolved or eliminated.
The white paper also notes that a “delicate balance exists between having the proper number of committees to maintain governance of the organization and creating too many committees that stall work or progress in advancing the credit union’s strategic goals.” If the board is not reviewing them to see where each standing or ad-hoc committee is with their mission, it is possible you just add another committee to list when a need arises.
Bob Harris with the Non-Profit Center provided us a wonderful resource to share with you on this very topic. You can find his supplement here as well as links to additional tools that might help if you decide to do a deep dive on your current committees and future needs. Or, better yet, name a committee to do that review for you!