The board of directors has the following four basic responsibilities:

• Select qualified management and evaluate management’s performance;

• Establish, regularly review, and revise as necessary business goals, standards, policies, and procedures;

• Review operating results and performance of new and existing activities; and

• Ensure compliance with applicable laws and regulations, and the credit union’s own policies and procedures.


While fulfilling these responsibilities, board members should:

• Operate independently from management;

To review credit union management, examiners may consider the following procedures:

• Review the credit union’s strategic and business plans and analyze management’s integration of risk management with planning and decision making;

• Review responsiveness to examination and audit suggestions and recommendations, and assess corrective actions taken to address risks identified in prior examinations and audits;

• Review the minutes of regular and special board and committee meetings for significant items;

NCUA reviewing management:

• Assess management’s ability to recognize, assess, monitor, and control risk

• Assess whether the credit union board of directors has sufficient expertise to adequately plan, direct, and control the operations of the credit union

• Determine whether the board and management adequately plan for future conditions and developments

• Determine whether the board is appropriately fulfilling its responsibilities and duties

Management is responsible for identifying, monitoring, measuring and controlling (i.e., managing) the risks faced by the credit union. Their ability to manage these risks determine whether the credit union can correctly diagnose and respond to financial stress. Examiners should not assess management solely on the credit union’s current financial condition, nor should the management rating be only an average of the other component ratings.