Board Liability Stakes Rising

The tradeoff between risk and reward rules all things financial. That’s particularly true in credit union boardrooms, where rewards for directors, in the form of new rules allowing compensation, are rising in lockstep with liability risks. The trend has incited many boards to get more serious about internal fraud, data breaches, increasingly complex regulatory oversight, rapidly changing technology and other serious risks.

“The more consumers become aware of the board’s fiduciary responsibility, the more they can include board members in lawsuits,” Mitchell Stankovic & Associates CEO Susan Mitchell said. “Volunteer boards have a certain perception and are less likely to be named as responsible. However, with the trend to pay volunteers, I believe this could change the dynamics.”