Beyond Financial Literacy: The Board's Role in Managing Risk

On Jan. 25, 2011, the Credit Union Leadership Forum held its first web seminar entitled, “A Practical Perspective: Regulatory Realities,” featuring Paul Peterson, NCUA associate general counsel, Teresa Halleck, president/CEO, San Diego County Credit Union and Sarah Snell Cooke, editor-in-chief of Credit Union Times, and myself. We discussed the practical and real-world implications of the new NCUA regulations regarding board of director responsibilities.

The new regulation states that at the time of election or appointment, or within a reasonable time thereafter, not to exceed six months, a director must have at least a working familiarity with basic finance and accounting practices, including the ability to read and understand the federal credit union’s balance sheet and income statement, and to ask, as appropriate, substantive questions of management and the auditors.