FAQ: Board of Directors Elections in Credit Unions
The board of directors is the body which manages most aspects of a credit union. Members of credit unions elect their board, which represents their interests. Get the answers to the most frequently asked questions about the board of directors elections in credit unions.
General Questions
1) What legal position does the credit union’s board of directors have?
The board of directors is elected by the membership and acts as the managing executive of the credit unions. The board also represents the credit union on all levels, including courts of law.
2) How many directors sit on the board?
The number of board members usually ranges between five and twelve. The average number of directors in credit unions is seven. Besides, positions typically include a president, vice-president, secretary, treasurer and additional directors overseeing various parts of the credit union.
3) What is the election process for directors on the board?
Directors are most often directly elected by the membership. The election takes place at the Annual General Meeting and is often supported by postal vote. Some credit unions even use voting machines or online voting in addition to their voting procedures. Besides, if credit unions are larger and members are spread across a region, the credit union can hold delegate elections for different voting districts. Members then elect a delegate who in turn elects the board of directors on behalf of their respective members (usually regionally).
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4) Can only members be elected to the board?
Yes. In order to be eligible to serve on the board of directors, members must be a person who is at least 18 years of age and must fulfill all additional membership eligibility criteria established in the credit union bylaws. Some credit unions exclude members who are not living or born in the country the credit union is operating. In addition, members cannot be employed by the credit union and serve on the board.
5) Who can nominate candidates, and what are the deadlines?
Any eligible member (as defined in the credit union’s bylaws) who wishes to nominate a candidate for an open seat can fill out a candidate application with the nominating or election committee. This nominee list shall be closed 90 days prior to the AGM.
6) How long are board of director terms?
In most credit unions, the directors on the board serve for a term of three years. Terms of office can vary depending on the size of the credit union. Besides, it is common that the number of terms / years is limited. An example would be no more than four consecutive terms, or twelve consecutive years.
7) What responsibilities do board members have?
The board of directors manages the credit union on behalf of the membership. The board is directly accountable to their members and its regulators. The interests of the members is always above the interests of the directors. The board decides on the direction of the credit union and establishes guidelines about the financial risk the credit union is willing to take.
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Voting Rights
8) Can Annual General Meetings be held electronically?
Holding a digital AGM is legally possible. However, it needs to be allowed in the bylaws of the credit union along with the election criteria which must be met for the election to be considered valid.
9) Is online voting possible in credit unions?
Electronic voting has to be included in your credit union’s bylaws to be legally valid. If your bylaws do not include electronic voting yet, you can amend your bylaws at the AGM to add online voting and other electronic voting options to your voting procedures. Your bylaws should then contain specifics about the requirements and processes of online voting.
10) How can the bylaws be amended?
Credit union bylaws can be amended at the AGM by an election. Not all members may have the rights to vote on amendments. Similarly, these voting rights must be established in the bylaws. Details about how to amend credit union bylaws can be found in the federal, state or provincial legislation governing credit unions.