By Donya Parrish, MCU VP- Risk Management
Should the board of directors approve all policies and policy changes for the credit union? The answer might be a bit like asking ‘what came first — the chicken or the egg?’ There are some who feel strongly that the board is required to monitor certain policies so should see all at any level of adjustment. Other credit unions only want to take what is absolutely necessary to the board level for input and blessing.
Since the board’s role is general oversight of the credit union, keeping a pulse on policies is one mechanism they have to adjust the controls if needed. Regulations and examiners also expect many policies to be taken to the board for initial approval, annual approval, and any updates in between. You can use this Policies and Procedures list to see those that fall into that category.
As the guide notes, “even if board approval is not specifically required, CUNA suggests that for significant policy changes, board approval should be considered.” The credit union may want to keep more detailed processes in their procedures so updates can be made more timely and efficiently when needed.
With close oversight expected of the security, Bank Secrecy Act, investments, and many other policies, it might be easiest to just keep all your policies on a rotation for a board review, whether changes have occurred or not. It comes down to a balance of keeping the board informed without getting too far into the weeds.
So, I am curious what you think, is it the chicken or the egg?