This page describes what Directors do at a Credit Union. If you would like to how much Directors at Coast Capital Savings and other credit unions get paid, please see our Director Pay page.
So what is the role of Directors at a credit union?
Traditionally, credit union Directors have had one overriding responsibility – ensure the money that members entrust to their institution is there when members need it. Their efforts, in one way or another, focused on the safety of members deposits.
However, in 2008 when the financial system was under a high degree of uncertainty, the Province of BC performed added an industry safety-net by providing a 100% guarantee for all credit union deposits regardless of the amount. The unlimited guarantee continues to this day and it effectively eliminates any risk to depositors which significantly reduced the responsibility of Directors. Now if a credit union falls into unmanageable problems, the depositors are safe, regardless of who is at fault.
Deposit insurance for credit unions in BC is provided by the Credit Union Deposit Insurance Corporation (CUDIC) which is administered by the Financial Institutions Commission (FICOM). Both CUDIC and FICOM, who regulate BC’s credit unions, expect credit union directors to play a proactive role in managing risk and protecting depositors.
So what do the Directors do now?
They continue to provide guidance and oversight but a case can be made that the bigger and more sophisticated the credit union, the less need for Directors to provide guidance due to the highly qualified management teams in larger institutions. It is more challenging to be the Director of a small or mid-sized institution where management is likely less experienced and knowledgeable. All of these institutions are highly regulated and closely monitored by the Financial Institutions Commission – the bigger they are, the closer they are monitored.
Directors of large publicly owned banks are not brought on to the Boards for their financial sophistication or management skills – that is the responsibility of day-to-day employees. Bank Directors are expected to be “rain makers” – circulate within the business community and develop additional business for the bank. With few exceptions that is their primary role.
In a 2010 survey, Directors of Fortune 500 Companies (amongst the largest and most complicated in the world), the respondents to the survey reported they spend an average of 4 – 4 ½ hours a week attending to their duties. 16 – 18 hours a month. In a 2012 survey, Directors of small US banks report spending 10 to 15 hours a month on their duties.
On the Coast Capital website there is a considerable amount of information regarding the role and responsibilities of Directors. Refer to the Governance section, which is available at this link.