The regulatory landscape for credit unions is changing, with greater federal and state scrutiny coming down on financial institutions of all kinds. New regulations are not just major obstacles for new credit unions, they’re also bringing unprecedented scrutiny to established credit unions. In this climate, transparency is the key to the good governance of any financial institution, especially credit unions in the U.S.A.
In addition to new rules on how credit unions can recruit new members, credit unions must comply with tighter risk management regulations, even though they largely weren’t responsible for the riskier behaviors practiced by banks that led to the 2008 financial crisis. A major part of the board of directors’ job is to ensure that the credit union is in compliance with all regulations. That becomes harder to do when documents pertaining to key decisions are unavailable or aren’t equitably distributed to all members of the board.
Board portals help provide transparency by making document distribution clear and available to all parties: directors, management, and staff. For example, the board portal from Aprio allows administrative staff to quickly upload documents like financial reports or board books straight into the portal, instantly available to all users. However, if there are reports or documents that must be kept confidential, administrators can create sub-groups for committees (such as a CEO evaluation). Custom access reduces the risk your organization faces of an information leak without compromising transparency. Documents are instantly updated and Aprio Boardroom sends directors an email notification every time materials are updated, with a link to the document; the portal still requires a unique login to access the document. As a security measure, this makes sure that data isn’t compromised due to the inherent insecurity of email.
Board portals also allow administrators to invite directors to meetings and votes simultaneously – leaving no room for accusations of favoritism when it comes to directors who are for or against certain ideas. Communication bias is a huge obstacle to good governance and board software can eliminate any ambiguity. The freedom to organize meetings and distribute board books to directors who could be anywhere in the world and in various time zones in a one-stop platform is invaluable.
Finally, an archive can also be a successful tool for maintaining transparency over the years. An accessible digital archive means that new directors are free to see past decisions and performance, good or bad. The value of an archive is explored in further depth at Aprio.net for those curious about using board portal software to improve good governance.
Credit unions are facing new struggles in the near future as their tax exemption is targeted by bank lobbies and FinTech firms emerge as a new source of competition. If your board hasn’t fully adopted practices that support transparency, board portal software is a technological solution that helps you get there sooner. Increased regulatory hurdles and scrutiny demand a culture of transparency; make sure your organization is open and efficient.