I personally don't know why anyone would have a problem with 701.4 (b) (3). Who in their right mind wants to work with a board that does not have a clue on how things work? As a credit union what we do sounds simple, we buy and sell money and provide financial services to our members. Sounds easy, but in practice it is quite complicated, and if your board is not educated how can it function properly?

My board and I work as a team, and board education is at the top of our list. No directors' questions go unanswered. If an answer is not possible at the meeting it will be provided to all board members as soon as possible. Being a big supporter of NAFCU, I highly recommend its director training products, and CUNA and the leagues also have some good programs. In addition, MSFFCU also provides in-house training for our directors.

Here at MSFFCU we also believe that it is very important to have a director on our key committees, the asset-liability committee and the enterprise-risk management committee. Being on these committees is definitely a learning and eye-opening experience for a director. The good thing I see about the new 701.4 additions is that maybe the content of conferences will once again become more important than the location.

Section (c) seems to have caused a lot of discussion because it states that "each federal credit union's board of directors and all its committees have the authority to retain staff and outside counsel, independent accountants, financial advisers and other outside consultants at the expense of the federal credit union."

Now let's go back to 701.4 (a), which states, "While a federal credit union board of directors may delegate the execution of operational functions to federal credit union personnel," plus the first paragraph of 701.4 (b) (4) states, "Direct management's operations of the federal credit union in conformity with the requirement set forth in the Federal Credit Union Act, this chapter, other applicable law and sound business practices." I think the key words here are "sound business practices." When this is taken as a whole, I do not think we need to worry about directors running willy-nilly around hiring staff and outside counsel. If your board does start doing this you, probably have bigger problems and may want to update that r?sum?. The other key words are "board of directors," not a director, meaning any of these actions must be board actions and no one director can act on his own.

Finally, 701.4 (d) reliance sounds like you could end up with directors running all over the place, digging into everything and causing trouble. If a director is doing this for his or her own self-interest, then they will not be meeting the regulation, plus any action that they subsequently suggest would have to be approved by the whole board, no director has the authority to make decisions on their own. If you have a good working relations with your board and they are well educated on credit union issues and operations, this should not be a problem.

The bottom line is that managing and leading a credit union is a complicated business and unpaid volunteers do not have the time to do what the credit union professionals do. The CEO's job is to provide leadership not only to the staff but also to the volunteers, it is a partnership. To have a full partnership means educate your board, provide them with needed information, voice your opinions, listen to theirs and, finally, implement the board's decisions, even if you disagree.

My only fear is that 701.4 may scare off good volunteers. Let's hope not.

Cary J Anderson
President/CEO
Main Street Financial FCU
Baton Rouge, La.