By Ron Parker, CPA
In my 30 years as partner of Clifton Gunderson, LLP, now the largest provider of audit and credit union services in the country, I’ve worked with organizations of all sizes. I’ve witnessed how important supervisory committees are to the health of a credit union, as well as seen the best practices helping supervisory committees be as effective as possible.
Every supervisory committee is unique. What you do as a committee for a $10 million credit union is certainly different than for a $10 billion credit union. However, whether you’re a new or seasoned committee member, the following best practices are a good foundation for a successful supervisory committee.
First, gain a solid understanding of what the regulatory requirements for your position as a committee member are. What do the regulations say you and your committee must do?
Second, as a committee, become familiar with the risk of loss at your credit union. The seven areas of risk regulators focus on in their examinations are a good starting point: credit, interest rate, liquidity, transaction, compliance, strategy and reputation.
Third, once you have a good handle on your regulatory requirements and where the greatest risks in your credit union lie, work closely with management. Coordinate with them to develop an annual work plan outlining the ways your supervisory committee can help mitigate the identified risks.
As you follow your work plan and look to the future, you can help your supervisory committee become even more effective by recruiting new volunteers who have expertise in areas your credit union needs. For example, when the supervisory committee I serve needed IT guidance for our credit union, we recruited a community member with an extensive background in that area.
Time and resources are limited for everyone in your credit union, including your supervisory committee. Following these best practices will ensure your committee can do all it can to protect and support your credit union.
Ron Parker is a Certified Public Accountant and retired partner of Clifton Gunderson, LLP.
Join Parker to gain more insight into how to make your supervisory committee more effective at CUES’ Supervisory Committee Development Seminar, June 10–11, 2013, in Santa Fe, N.M.
