By Lisa Hochgraf
Credit union directors are bound by law to carry out their duties to the membership. No excuses get individual directors off the hook, John Oliver told attendees of CUES Director Strategy Seminar this week in San Diego.
Don't even try these, advised Oliver, president of Laurel Management Systems, Palm Springs, Calif.:
- "But I’m new on the board so I’m just sitting back and watching.” Common law requires participation on day 1.
- "But others know more about this subject than I do." Under common law, that’s going to get you nowhere, either, Oliver advises. Ask others for advice. Only if you have questioned and understood the decision do you have protection legally if it turns out badly.
- “I rely on management to steer me right on most things.” "The whole reason we have a system of governance is to have a system of checks and balances," Oliver said. In fact, boards can hire their own legal counsel separate from credit union counsel should such be needed.
“If you don’t participate actively and knowledgeably, you fall down on your fiduciary responsibility under common law,” Oliver said. "There's no excuse you can think of that relieves you or your responsibility or your liability."
Lisa Hochgraf is a CUES editor.
Read more from CUES Director Strategy Seminar :
"Don't Choose Your Mission Statement on Google"
"What Questions Do you ask Your Members?"
