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LEAGUE OF SOUTHEASTERN CREDIT

UNIONS, INC.

BOARD OF DIRECTORS GOVERNANCE MANUAL

Approved 3.24.2010


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You have been selected by your peers to represent them in guiding the operations of the League of Southeastern Credit Unions, Inc. You have been charged with the tremendous responsibility of helping to direct this dynamic service delivery organization in a manner that will further the mission of this League. The mission of the League of Southeastern Credit Unions is “to ensure an operating environment through advocacy, leadership, and services that will enable credit unions to maximize their potential as unique financial institutions.” (Adopted December 15, 2009) Vision Statement “The League of Southeastern Credit Unions will be the trusted source of advocacy and information for credit unions in Alabama and Florida.” (Adopted December 15, 2009)

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TABLE OF CONTENTS Code of Ethics

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Guidance for Newly Elected Directors

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Confidentiality Agreement

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Conflict of Interest Disclosure

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Executive Committee – Job Descriptions

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Succession Plan Policy

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Executive Committee Expenditure Authority

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CEO Review/Compensation Committee

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Committee Appointments

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Conduct of Elections

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Capital Reserve Policy

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LSCU Investment Policy

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President/CEO Spending Authority

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Spouse/Guest Participation

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Director/Committee Expense Reimbursements

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Travel Expense Policy

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General Policy Statements

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Associate CU Dues Policy

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CU Dues Waiver Policy

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League Service Corporation Board Structure/Governance

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Office of the President

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CODE OF ETHICS General Policy for Officials As used herein, “official” refers to board members and committee members of the League of Southeastern Credit Unions, Inc., and subsidiary organizations (hereinafter collectively, “League”). 1. Highest standards of personal conduct shall be observed at all times. Integrity, competence, and a cooperative spirit should be the hallmark of an official. 2. Officials shall accept, as their overall objective, responsibility for fostering growth in services offered by the League. 3. Officials shall attend and participate in scheduled meetings as regularly as possible throughout their entire term of office. 4. Officials shall fully support policies which have been adopted by the board. 5. Officials shall make every reasonable effort to understand the financial condition and investments of the League. 6. Officials shall accept only those assignments in which they can commit a sincere, continuing effort. If prevented by circumstances from giving full performance, a reassignment should be requested. 7. Officials shall be alert to prevent any person or group from acquiring or exercising influence in conflict with the purposes and objectives of the League. 8. Officials will foster, encourage and uphold the principles for which the League is organized, keeping in mind that the organization’s future prestige and growth will depend greatly on the public image created, as well as the decisions made. 9. It shall be the obligation of any official who perceives improper conduct on the part of any other official to take necessary and immediate steps through proper procedures to protect the League. 10. Officials shall not promote or engage in any activity harmful to the best interests of the League. Conflicts of Interest 1. All officials shall be presented with a Conflict of Interest Disclosure form that must be read, completed, signed and dated, expressing all potential conflicts of interest as described therein. 2. All officials shall notify the League immediately in writing of any new/additional potential conflicts of interest as described in the disclosure document procedure. 3. Any official having a significant conflict of interest as determined by the board, on any matter placed before the board for consideration, should recuse themselves and abstain from discussing or voting on the matter in question; however, they shall be counted in determining a quorum. 4


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Support the Majority Decision 1. Officials shall thoroughly discuss and give objective hearing to all controversial issues. After such consideration and debate, they should exercise their best judgment in casting their vote. 2. Following a vote, the decisions of the Board of Directors shall govern the board members, and all officials, regardless of individual opinions. 3. Officials shall report to the chapters and member credit unions in a fair and complete manner, taking into consideration those matters deemed to be covered by the Confidentiality Agreement signed by each official and on file. Confidentiality 1. By their position as an official, individuals are privy to confidential information and shall read, sign, and date a Confidentiality Agreement that shall be binding on the official, their personal representatives and successors in interest, and shall inure to the benefit of the League. 2. An official shall deal in confidence with all matters involving the League until such time as there has been general public disclosure by the organization(s). 3. The importance of confidentiality cannot be overemphasized, because of the potential for jeopardy to the organization and breach of the Confidentiality Agreement signed by the official. In consideration of being an official of the League, the undersigned individual hereby agrees to abide by and acknowledges the above Code of Ethics. Signed this_____day of_______________________,_________. _________________________________ League of Southeastern Credit Unions, Inc.

___________________________________ Official

(Approved 3.24.2010)

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GUIDANCE FOR NEWLY ELECTED DIRECTORS The following suggestions will assist you in adapting to your position on the board: a. Study the Code of Ethics and Guidance for Newly Elected Directors established for the League of Southeastern Credit Unions, Inc. directors. This statement of policy will provide guidance on duties and responsibilities of a corporate officer. b. Acquaint yourself with the bylaws of the League of Southeastern Credit Unions, Inc. and the board policies. These define the duties of officers, directors, committee members; they establish the relationships existing between the League, chapters, districts, and member credit unions. c. You represent the League members consisting of all member credit unions in Alabama and Florida. You should be aware of the needs of your constituency when evaluating programs or voting on proposals. Therefore, you should consider all proposals and programs in light of the benefits derived for all member credit unions and not just your particular credit union. d. Because you are more familiar with the day-to-day operations of the League and subsidiaries than most of the other credit unions, it is important that you be fully informed since others are likely to regard any statement you make about the League as absolute fact. e. Criticism is a completely democratic custom and can be highly constructive if presented properly, with appropriate specifics. f. The executive staff of the League can be of great help to you; they are familiar with management and operations and can offer assistance to you in your role as director. The directors should also be familiar with the organizational structure. Policy is set by the Board of Directors; the President/Chief Executive Officer has responsibility for carrying out policy, and in turn, assigns various operational responsibilities to League staff. g. When League projects and problems are discussed, be sure the discussion involves the proper people at the proper time so that you can obtain accurate information. h. All organizations have both successful and unsuccessful programs. From time to time you may have suggestions and comments about League projects and programs which you believe will improve the overall effectiveness of the League. These comments should be directed to the League President or to the Chairman of the Board, who will make the proper referrals for consideration and/or study. i. Make all your efforts constructive. The members you represent are a diverse group, and will expect you to work constructively. j. It is important to remember that the board is the policy-making body of the League of Southeastern Credit Unions, Inc.; the President, as chief executive officer, takes his direction from the board and reports directly to the board. All staff ultimately report, through organizational lines, to the President. . 6


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About Board Meetings a. The League of Southeastern Credit Unions, Inc. Board of Directors will meet quarterly and will be notified of the exact dates well in advance of the meetings. b. On rare occasions a special meeting of the board may be called by the Chairman upon written request of at least five directors. A special meeting requires 48 hour notice which shall contain the purpose of the meeting and the business of the special meeting. c. Attendance of a director at board meetings is essential. Continuous absences from board meetings may constitute grounds for removal. d. A packet of material containing an agenda, management reports, minutes of the previous meeting, etc. will usually be sent to you prior to the meeting. Please review the material provided in preparation for the meeting. e. Feel free to comment constructively, question or disagree on any issue. f. If your remarks are lengthy or involved, summarize at the end of your discussion. g. When a motion is offered, hold any questions until the appropriate time. Working with League Staff The President of the League is eager to assist you. The day-to-day operation of the League is his function and as your employed representative he can help you in many ways. The most effective operation of the League depends on your communicating goals and objectives through established channels and procedures; open lines of communication with board officials, other directors and management will be beneficial to all involved.

(Approved 3.24.2010)

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CONFIDENTIALITY AGREEMENT In consideration of being a member of the League of Southeastern Credit Unions, Inc. (the League) Board of Directors, the undersigned Director hereby agrees and acknowledges: 1. That during the course of my term of office on the League Board of Directors, there may be disclosed to me certain trade secrets consisting of but not necessarily limited to: a. Technical information: Methods, processes, systems, techniques, inventions, machines, computer programs, and research projects. b. Business information: Customer lists, pricing data, sources of supply, financial data and marketing, budget information, compensation plans, employment information of staff, and business plans. 2. I agree that I shall not during, or any time after my term as a member of the Board of Directors, use for myself or others, or disclose or divulge to others any trade secrets, confidential information, or any other proprietary data of the League or its subsidiary organizations in violation of this agreement. 3. That upon the completion of my term as a member of the Board of Directors of the League: a. I shall return to the League upon request all documents and property of the League, including but not necessarily limited to reports, manuals, correspondence, or any other privileged information made available to me in my capacity as a member of the League Board of Directors. b. This agreement shall be binding upon me and my personal representatives and successors in interest, and shall inure to the benefit of the League , its successors, and assigns. Signed this _____ day of _______________________, _________ . _______________________________ League of Southeastern Credit Unions, Inc.

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Member of the Board of Directors

(Approved 3.24.2010)

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CONFLICT OF INTEREST DISCLOSURE The Board of Directors of the League of Southeastern Credit Unions, Inc. and its subsidiary and affiliated organizations (hereafter “the League”) must act at all times with the best interest of the League and not for personal or third-party gain or financial enrichment. When encountering potential conflicts of interest, board members shall identify the potential conflict and, as required, remove themselves from discussion and voting on the matter. Specifically, members of the Board of Directors shall: •

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Avoid placing (and avoid the appearance of placing) one’s own self-interest or any third party interest above that of the League; while the receipt of third-party benefit may necessarily flow from certain League activities, such benefit must be merely incidental to the primary benefit to the League and its purposes; Not abuse their Board membership by improperly using their Board membership or the League’s staff, services, equipment, materials, resources, or property for their personal or thirdparty gain or pleasure, and shall not represent to third parties that their authority as a Board member extends any further than that which it actually extends; Not engage in any outside business, professional or other activities that would directly or indirectly adversely affect the League; Not engage in or facilitate any discriminatory or harassing behavior directed toward League staff, members, officers, directors, meeting attendees, exhibitors, advertisers, sponsors, suppliers, contractors, or others in the contest of activities relating to the League; Not solicit or accept gifts, gratuities, free trips, honoraria, personal property, or any other items of value from any person or entity as direct or indirect inducement to provide special treatment to such donor with respect to matters pertaining to the League or affiliates. Disclose gift(s) exceeding $100.00 in value to the Board of Directors; Provide goods or services to the League as a paid vendor to the League only after full disclosure to, and advance approval by, the Board, and pursuant to any related procedures adopted by the Board; Not persuade or attempt to persuade any employee of the League to leave the employ of the League or to become employed by any person or entity other than the League; and Not persuade or attempt to persuade any member, exhibitor, advertiser, sponsor, subscriber, supplier, contractor, or any other person or entity with an actual or potential relationship to or with the League to terminate, curtail or not enter into its relationship to or with the League, or to in any way reduce the monetary or other benefits to the League of such relationship.

To help avoid any conflicts of interest, on this form you are disclosing ownership or other proprietary interest, responsibilities, circumstances, or other reasons why you (or, by extension, any member of your family) might have an actual, apparent, or potential conflict of interest with your duty to the League, both respect to the conflicts prohibited above and any others. You hereby invite further review by the League of any aspects of these circumstances that might be considered appropriate for such review. In addition, you agree to take other steps, such as avoiding deliberation and resolution of certain issues or even withdrawing your membership on the Board of Directors, if it is determined that such steps are necessary to protect the integrity of the Board of Directors and avoid the breach of your fiduciary duties to the League. Finally, during such time as you continue to serve on the Board of Directors, you agree to notify the League CEO promptly if and when you determine that any additional 9


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actual, apparent or potential conflicts of interest with your duty to the League arise subsequent to the execution of this form. Please check and/or complete the appropriate section below: _____ Actual, apparent, or potential conflicts: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ ___________________________________________________________________. _____ There are no actual, apparent, or potential conflicts.

Signed this ______ day of __________________, _______. ________________________________ Signature

__________________________________ Print Name

(Approved 3.24.2010)

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EXECUTIVE COMMITTEE - JOB DESCRIPTIONS PURPOSE: All corporate powers and business affairs of the League shall be exercised by and under the authority of the Board. When the Board is not in session, and business needs dictate that there is insufficient time in which to convene a meeting of the Board, then the Executive Committee shall have and may exercise all authority of the Board, except in matters as defined in the Bylaws. MAJOR DUTIES AND RESPONSIBILITIES: CHAIRPERSON. The chairperson shall preside at all meetings of the League, the Board of Directors, and the Executive Committee. The chairperson shall present an annual report to the members. The Chairperson shall perform such other duties as shall be assigned from time to time by the Board of Directors. The Chairperson shall have the authority to appoint committees as may be deemed necessary. CHAIRPERSON-ELECT. The chairperson-elect shall, in absence or disability of the chairperson, perform the duties of the chairperson. He/she shall perform such other duties as may be assigned by the chairperson. VICE CHAIRPERSON. The vice chairperson shall, in absence or disability of the chairperson and chairperson-elect, perform the duties of the chairperson. He/she shall perform such other duties as may be assigned by the chairperson. TREASURER. The treasurer shall be responsible to cause all monies, funds, and securities of the League to be safely kept in accordance with instructions of the Board of Directors. The treasurer shall have authority to borrow money on behalf of the League when expressly authorized to do so by the Board of Directors. The books of account and records shall, at all reasonable times, be open to the inspection of the directors. The books shall be audited annually by a certified public accountant. The Treasurer shall chair the audit committee. The treasurer shall furnish to the directors, whenever required by them, such statements and abstracts of records as are necessary for the full exhibit of the financial conditions of the League and shall make a report to the annual membership meeting. Any actual and direct expenses incurred by the treasurer in performance of its duties as treasurer shall be reimbursed from the annual budget adopted by the Board. The treasurer shall not be an employee of the League. All checks of the League shall be signed by either the chairperson, treasurer, or president or by such others deemed necessary upon approval of the Board of Directors; notes and other obligations signed by the chairman or president shall be countersigned by the treasurer or one of the vice chairmen, or as otherwise authorized by the Board of Directors. The president and all officers and employees of the League shall be adequately bonded. SECRETARY. The secretary shall cause notice to be given of the meeting of the members, Board of Directors, and Executive Committee as required herein. The secretary shall cause to be kept a record of the votes and proceedings of all such meetings. The secretary shall cause such other books and records to be kept as the Board of Directors, Executive Committee or the chairman shall require, and shall perform such other duties as may be required by them. The Board of Directors may appoint an assistant secretary; and the chairman may direct the assistant secretary to perform the duties of the secretary during the absence of the secretary and during the secretary's inability or incapacity to act. (Approved 3.24.2010) 11


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SUCCESSION PLAN POLICY Recognizing that the League of Southeastern Credit Unions, Inc. is a dynamic organization, one of the Board’s most important responsibilities is to assure that the League has continuity of effective leadership. This means the League President/CEO position should not be left vacant for an extended period of time and a formalized succession plan needs to be in place to cover situations in which the current President/CEO should suddenly depart or become incapacitated through extended illness or death. Therefore, it is the policy of the League that the Executive Committee of the Board will immediately select a person from the Executive Management Team to assume the position of Interim President/CEO and become responsible for the management of the League and Subsidiaries should the President/CEO for any reason become incapacitated or suddenly departs the position. The Executive Committee of the Board of Directors will immediately take steps to fill the position of the President/CEO on a permanent basis. The Chairman of the board will convene a special meeting of the League Board of Directors within 30 days to set in motion the process to begin the search for a new President/CEO.

(APPROVED 3.24.2010)

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EXECUTIVE COMMITTEE EXPENDITURE AUTHORITY The Executive Committee is authorized to expend up to $50,000 within any given fiscal year, with such expenditure reported to the full Board of Directors at next scheduled Board meeting. Any proposed expenditure that is in excess of the threshold amount of $50,000 shall be submitted to the League of Southeastern Credit Unions, Inc. Board of Directors for consideration. All proposed expenditures shall be accompanied with a detailed description of the purpose of the expenditure; its potential financial impact and its benefit to the League and/or members.

(Approved 3.24.2010)

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CEO REVIEW/COMPENSATION COMMITTEE

The LSCU CEO Review/Compensation Committee shall perform an annual performance review of the President/CEO. As part of the review process, the Committee will annually review the compensation and benefit package of the President/CEO. The Committee will ensure that the goals and objectives contained within the performance evaluation instrument are aligned with those of LSCU and LSCU Service Corporation. The Committee will also review CEO compensation trends within the relevant markets. Upon completion of the President/CEO performance review, the Committee shall prepare a formal recommendation to the League of Southeastern Credit Unions, Inc. Board of Directors regarding any changes to the compensation and benefits for the President/CEO as appropriate. This recommendation can be provided to the Board of Directors by regular mail or email, or in person, with approval and/or denial being submitted to the Chairman by the date set by the Committee. LSCU Chairman will appoint CEO Review/Compensation Committee.

(Approved 3.24.2010)

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COMMITTEE APPOINTMENTS The League Chairman may appoint standing committees, other than the elected Executive Committee, from members of the League Board of Directors and membership. The Chairman appoints all standing committees, ad hoc committees, and task forces. The President will appoint a professional staff member to serve as liaison to each committee, who will be present at each committee meeting to assist you in accomplishing your objectives. The Chairman shall provide notice to the members of the committee when its committee(s) is/are to meet. The President may assist the Chairman in providing the notice of scheduled meetings. Direct staff assignments cannot be made by any board or committee member, as all staff activities must remain under the direction of the President. Ad Hoc Committees may be appointed at any time at the discretion of the chairman and/or President/CEO. Standing Committees and respective committee charge is as follows: Audit Committee - Treasurer serves as Chair, with two additional League Board members appointed by League Chairman. Audit Committee shall perform or direct the performance of an annual audit of the League and its subsidiaries and report the results of such audit to the Board at the next scheduled meeting. Awards Committee – Chairman to appoint three (3) member committee, with LSCU Board Secretary serving as Chairman and two (2) at-large CU officials. Committee will administer and make recommendations to the LSCU Board of Directors for recipients of the League’s Professional & Volunteer of the Year Awards as well as the Distinguished Service Award (DSA). Will also review awards structure and make recommendations for improvement as deemed appropriate. CEO Review/Compensation Committee, appointed by League Chairman. - The CEO Review/Compensation Committee shall perform an annual performance review of the President/CEO. As part of the review process, the Committee will annually review the compensation and benefit package of the President/CEO. Committee would be comprised of Chairman-Elect as Committee Chair and three at-large LSCU Board members appointed by the League Chairman. Chairman would also serve on committee. League Governmental Affairs Committee – GAC would be comprised of one representative from each chapter for a total of 20 persons. Eight (8) of these individuals (4 from AL and 4 from FL) would be appointed by the LSCU Chair to serve as the Executive Committee, as well as LSCU Board Chairman and Chairman-Elect. LSCU President/CEO would serve as member of Executive Committee. Appointed Executive Committee members would serve as the Board of Trustees for their respective state’s PAC(s), along with LSCU Board Chair, Chairman-Elect and President/CEO. Additional at-large GAC members would be appointed by Board Chairman as needed. Chairman and CEO will discuss committee appointments annually. Members would serve one-year terms and members would serve as the League’s front-line grassroots lobbyists in their respective chapters.

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GAC Committee will advise and provide policy recommendations to the LSCU CEO and/or LSCU Board of Directors regarding legislative and regulatory issues affecting the CU movement. Provide a means by which affiliated CUs can participate in grassroots legislative advocacy and political action functions of the League. (Approved 3.24.2010)

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Conduct of Elections The League Chairman shall select and engage an outside agent such as an Audit or CPA firm to facilitate and ensure the integrity and impartiality of the election process. The agent may assist designated staff, to the extent necessary, in the balloting, tabulating, and certification in the election process and announcing the election results. LEAGUE OF SOUTHEASTERN CREDIT UNIONS Election Rules and Procedures 1.

Primary member credit unions are encouraged to participate in all elections. The Election Procedures and Rules apply to both the regular elections as well as any special elections held pursuant to these rules and the bylaws. As used in these Election Procedures and Rules, “election” includes the entire process of nominations, voting and elections pursuant to these rules and the bylaws for director seats including membership category directors.

2.

An official notice to participate in the election for League Director(s) will be mailed to the CEO/President of all “eligible primary member credit unions” no later than the fourth full week of February of the election year. Accompanying the notice will be: a. An official candidate nomination and certification form for Director Candidates, which includes a credit union certifying signatures b. Election Procedures and Rules c. A “Membership Category List” containing a list of all primary member credit unions indicating their respective membership category d. A specially marked self-addressed return envelope The Membership Category List shall be prepared using the most recent call report data from the NCUA that is available five (5) days prior to the mailing of the official notice. The List included in the Official Notice shall govern a credit union’s eligibility to qualify a candidate for a particular membership category. No candidate may change membership category, nor shall any candidate be disqualified from a membership category in the event a credit union’s membership category changes from the time of the mailing of the Official Notice to participate in the election to the time of the announcement of the final election results. The membership size categories are as follows: Class A. Class B. Class C.

Credit unions with fewer than 2,000; Credit Unions with not less than 2,000 members, but not more than 15,000 members; Credit unions with not less than 15,000 members, but not more than 40,000 members; 17


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Credit unions with 40,000 members or more.

To qualify as a candidate for election to the League Board of Directors, a person shall be a “Credit Union Official” as defined in Article XVI of the Bylaws which means a director, supervisory committee member, credit committee member or employee of a primary member credit union from the membership category for which the elections is being held. Pursuant to Article III, Section 5 of the Bylaws, “in order to qualify as a director a person must be certified as a credit union official by a qualifying credit union which falls in the appropriate membership size category”. A “Qualifying Credit Union” is defined in Article XVI of the Bylaws which “means the credit union which nominates a person and certifies that the person is eligible to serve as a League Director from that credit union”. A candidate must be nominated by a primary credit union certifying person is an official of that credit union. Further, such credit union must be from the size category which makes the candidate eligible for election. The official “Candidate Nomination and Certification Form” must be certified (signed) by an elected official or CEO of the “nominating” credit union from the membership category from which the candidate is eligible to run. No credit union may be a nominating credit union for a candidate if any person certified by that credit union will be serving as director during the term for which the election is being held. Further, a nominating credit union may certify only “one” candidate for any one election.

4.

An impartial agent shall be named by the League Board Chairman to receive and tabulate the official ballots returned by credit unions. All official Candidate Nomination and Certification Forms, or facsimile thereof, for League Director must be received by the designated agent on or before 5:00 p.m. Central Standard Time (6:00 p.m. Eastern Time) on the fourth Monday of month of March of any year in which an election is held. The designated agent, in consultation with the President’s designee of the League, will review the “Candidate Nomination and Certification Forms” for Bylaw and policy compliance and certify the eligibility of candidates who will appear on the ballot.

5.

A primary member credit union shall be eligible to vote if such credit union has paid its League dues in full, postmarked on or before March 31st of the election year.

6.

Credit unions eligible to vote for a League Director in elections will vote by ballot. All primary member credit unions are entitled to cast one (1) vote for each director election being held. A ballot, accompanied by the candidate’s nomination and certification information, will be sent to eligible credit unions that have requested a Ballot and Pass Code no later than the second Monday in April of any election year. 18


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Ballots may be faxed, mailed or emailed to the designated agent. Ballots must be received by designated agent via mail, facsimile, or email with “Provided Private Pass Code” no later than 5:00 p.m. Central Standard Time (6:00 p.m. Eastern Time) on May 1 or first working/business day by 5:00 p.m. Central Time (6:00 p.m. Eastern Time) of any election year, and must be certified (signed by elected official or CEO) by the voting credit union in order to be counted. Ballot and Private Pass Code can be requested by completing and returning “Ballot Request Form” to designated person at the League of Southeastern Credit Unions. This form must be signed by the credit union’s Board designated person and can be returned via fax or mail. Upon receipt of the “Ballot Request Form”, the League will fax or mail the ballot to the designated person with “private pass code” assigned to your ballot. Only one ballot per credit union and said credit union shall be eligible to cast one (1) vote for each director position contained on that ballot. In the event that only one official “Candidate Nomination and Certification Form” is received for a membership category seat, ballot(s) will not be sent to the credit union(s). The Designated Agent shall declare the single qualified candidate elected by acclamation. In the event no candidates have been qualified for any position for which an election is to be held, the President’s Office shall conduct a Special Election” following the same procedures as a regular election. The President’s Office may establish timelines for the Special Election. The “Membership Category List” accompanying the official notice to participate shall continue to be applicable to the election held at the Special Election. 7.

The Designated Agent shall tabulate the official mail ballots at conclusion of “voting period” and report election results to President’s Office, designated agent will also provide for destruction of all ballots and declare the election concluded. A copy of the Election Certification shall be filed with the Secretary of the League. The President’s Office shall also communicate the results of the election to the candidates and to the members of the League.

8.

In the event of a tie for a specific membership category, a Special Election will be held at a time designated by League President’s office.

(Approved 3.24.2010)

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CAPITAL RESERVE POLICY Objective: The creation and maintenance of this Reserve is a fundamental tenet of sound financial management. The primary objective is to establish and maintain an adequate reserve to protect LSCU from significant unplanned financial events and allow for an orderly response or transition to a significant unfavorable change in financial position. Definitions: League Reserves are defined as unrestricted member’s equity as of the date of the most recent audited financial statement date. For purposes of this policy, the reserve amount is determined based on the consolidated assets of the League of Southeastern Credit Unions, Inc. One year’s dues as defined as total affiliate dues collected for the current fiscal year. Policy: It is the established goal of the Board of Directors for management to maintain reserves equivalent to one year’s dues for the purpose of meeting emergency needs of the League.

(Approved 3.24.2010)

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LSCU INVESTMENT POLICY Statement of Purpose The purpose of this Investment policy is to establish guidelines from which cash held and maintained by LSCU & affiliated entities (LSCU). shall be managed. The management will solicit input at least annually from the Treasurer and Board of Directors on the existing cash balances, expected operating needs and how best to invest any excess balance. It is the intent of the Board of Directors to manage this cash in a way that creates the best benefit to the LSCU Investment Authority By approving this policy management is authorized to implement the Investment Policy described below and as recommended by management and to execute all investment transactions within the policy guidelines. As we recognize that cash and investments are an integral part of the success of LSCU, management will seek professional investment advice as needed to assure that all cash assets are being invested properly. • Management for the purposes of this policy is defined as: o The CEO of LSCU o CFO of LSCU Priority of Investment Guidelines As cash becomes available, the following sequence of investment objectives will be followed: •

Level 1 - will be to maintain an operating account that best fits the short term liquidity needs of LSCU. All operating cash will be retained in an interest bearing checking or savings account in one of the approved institutions listed in the table at the end of this document. o Maximum cash levels for this purpose are defined as three months of average operating expenses from the preceding year.

Level 2 - As cash balances exceed the “operating cash” needs per Level 1, LSCU will invest in short-term CDs in the approved institutions listed below. These investments will use a ladder approach using 3 month, 6 month, 9 month and 12 month CDs. o Level 2 maximum cash balances are defined as three times the Level 1 cash balances.

Level 3 - Once short-term investment goals are reached under level 2, and as cash flow allows, LSCU will purchase investments that limit exposure to moderate risk with a higher degree of return in the long-term. These long-term investments will adhere to the following guidelines. o Investment maturities shall not exceed five (5) years. o Investments will be made with laddered maturities up to five (5) years in equal increments. This will help reduce the risk of cash shortages, smooth out cash inflows and make expansion and larger scale projects more manageable in the future. o U.S. Treasuries and Agencies will be held in safekeeping by a Board approved corporate credit union or investment firm. 21


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o All investments made under the guidelines of Level 3 must be approved by the Treasurer or the Chairman of LSCU Approval of Investment Firms or Corporate Credit Unions Investment firms and/or corporate credit unions shall be approved by the Board of Directors to conduct business with LSCU. Once approved, the Board will annually review them to ensure that they continue to meet the requirements. Approval for corporate credit unions requires the following: • •

Corporate rated A1 by Standard & Poors. Should a corporate drop below the A1 rating; no new investments may be made with that corporate unless approved by LSCU

Audit Trail • Investments will usually be handled by telephone or e-mail. Corresponding confirmation and verification must be received and maintained in the LSCU office. • All wire transfer notices initiated by the LSCU will be subsequently reviewed and approved by the Treasurer of the LSCU • LSCU checking account will be acknowledged in writing by approved institutions as the only receiving account to which LSCU funds shall be remitted or made payable. • LSCU checking account depository shall acknowledge in writing that only institutions identified in writing over the signatures of at least two of the following: Chairman, Treasurer, CEO and CFO shall be a recipient of outgoing wires. • All investments and holdings will be audited at year-end for accuracy and confirmation letters will be sent to all approved investment firms and corporate credit unions. Report to the Board

The management will provide the Board of Directors with a monthly report (if investments exist) listing all investment vehicles by name, yield, amount and maturity date.

(Approved 3.24.2010) 22


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LSCU POLICY GUIDELINES TYPES OF INVESTMENTS Level I

Level II

Level III

Term

N/A

Up To 1 Year

Up to 5 years

Exposure to Risk

Extremely Low

Very Low

Moderate

Authorized Types

I N T E R E S T

C E R T I F I C A T E

B E A R I N G

D E P O S I T

O F

C H E C K I N G A C C O U N T S

A N D

U.S Government

• •

Securities U.S. Federal Agencies Federal Instrumentalities

S A V I N G S A C C O U N T S

Ratings

NCUA Insured

“A1” rating or better for the CU

“A” rating or Better for the Security

Timing Of Maturity

N/A

Due within 12 months

Smooth-out maturing investments over 5 year period to provide more consistent cash flow

Institution

Corporate Credit Unions & Credit Unions

Approved Investment Firms, Corporate Credit Unions & Credit Unions

Approved Investment Firms & Corporate Credit Unions

(APPROVED 3.24.2010) 23


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PRESIDENT/CEO SPENDING AUTHORITY The League of Southeastern Credit Unions, Inc. Board of Directors expects the corporation to operate within the overall approved budget. While considering this expectation, the CEO shall have additional authorization to procure, as necessary, non-budgeted goods or services, capital or non-capital, required in the performance of his duties as described by the Board. Therefore, the LSCU Board of Directors hereby grants the CEO authority to procure up to $10,000 per transaction of non-budgeted goods or services deemed necessary to effectively and efficiently conduct the affairs of the corporation, emergency repairs and replacements are exempt. These are to be done at the discretion of the President/CEO. These purchases, or expenditures, will be reported immediately to the Treasurer and to the Board of Directors no later than the next meeting.

(Approved 3.24.2010)

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Spouse/Guest Participation The League and its affiliates encourage spouse/guest of directors to be active in, and be knowledgeable of, the corporate affairs of these organizations, and to support directors and officers in carrying out the duties and responsibilities of their respective offices. The League and its affiliates will annually budget for the cost of meals consumed at scheduled dinner meetings and hotel room differentials for spouse's/guest’s participation. Transportation costs and incidental meal costs for spouses/guests are not reimbursable. (Approved 3.24.2010)

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POLICIES GOVERNING DIRECTOR/COMMITTEE EXPENSE REIMBURSEMENTS

1. No claim shall be made for any item of expense which has or will be reimbursed by any other source. 2. The Treasurer shall have authority to refuse to approve any item on an expense voucher. If claimant desires to do so, he or she may ask the Treasurer to bring the disputed item before the Board in an executive session for a decision. 3. Lodging, travel and related expenses incurred in conjunction with attending League Board and Committee meetings shall be covered at actual cost. The current IRS mileage allowance will be reimbursed. Expenses will be reimbursed for travel to meeting, day(s) of meeting, and return travel. Actual air fare by shortest route to and from the point of meeting. Reasonable expenses related to parking, tolls, tips, taxi fare, registration fees (if applicable) and business-related calls to respective meeting. 4. Directors wishing reimbursement for expenses incurred while attending League approved meetings must submit an expense voucher to the League office within 60 calendar days of the called meeting; except that the League Treasurer shall have the authority to waive this requirement under adverse circumstances. All expenses greater than $25.00 must be supported by receipts. 5. Certain items of expense may be charged directly to the League of Southeastern Credit Unions such as hotel bills which you would sign for; airline charges for which you receive a ticket from the League and other transportation charges for which you sign. (Adopted 12.15.2009)

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TRAVEL EXPENSE POLICY TRAVEL EXPENSE POLICIES For Board and Committee Members of the League of Southeastern Credit Unions, Inc.

I.

TIME LIMITS - Those attending board or committee meetings may be paid allowable expenses only for the 24 hours prior to the first meeting and 24 hours succeeding the close of the last meeting at which their attendance is required.

II.

ALLOWABLE EXPENSES - The following expenses are allowable by the League: A. Transportation: Travel to the meeting from the permanent residence of the traveler and return should be by the shortest route possible. The following expenses will be approved: (1) the actual commercial fare indicated on receipt vouchers; or (2) the mileage allowance as specified for individuals. (NOTE: Approval for travel by means or routes, other than those stated above, must be obtained in advance from the League treasurer or president.) B. Taxi: Reasonable taxi fares necessary and incidental to the official business for which travel is authorized are allowable. C. Parking: When privately owned car is used, reasonable parking fees are allowable. D. Lodging: Actual cost of room rate for hotel or motel accommodations as arranged for the meeting are allowable. E. Meals: Reasonable cost of meals, including necessary tips, are reimbursed when incurred during travel time and while in attendance at the meeting. Meals paid for other qualified persons must be explained. F.

Tips & Other Expenses: Reasonable tips, such as for hotel bellboys, car and/or baggage attendants, are considered allowable. Other necessary expenses incurred by those traveling for the League must be described in writing and receive appropriate approval. (These would include long distance telephone calls, postage and any others not specifically provided for in these policies.)

III.

UNALLOWABLE EXPENSES - The following expenses are not allowable by the League: (1) expenses of anyone other than the person specifically authorized to travel on official business; (2) any expense incurred without reasonable effort to transact the business in the most economical manner consistent with reasonable convenience and comfort to the traveler; and (3) committee meeting rooms, other than those arranged for or approved by the League. Reimbursement for First Class travel is prohibited unless pre-approved by the Treasurer.

IV.

SUBMISSION OF EXPENSE VOUCHERS - All vouchers should be submitted to the League office as soon as possible, but no later than 60 days after the meeting. Vouchers will be processed immediately; and if no unauthorized expenses are evident, reimbursement checks will be made by return mail.

V.

APPROVAL OF EXPENSE VOUCHERS - All expense vouchers must be approved by the treasurer or president. Any questionable items on which there is disagreement will be referred to the Treasurer for his decision. The decision of the Treasurer will be final. NOTE: The League requires each traveler to keep accurate records and obtain receipts or explanations, thereof, to justify all reimbursable expenses. We believe the above policies are for your benefit under the circumstances.

(Adopted 12.15.2009)

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LEAGUE OF SOUTHEASTERN CREDIT UNIONS, INC., AND ASSOCIATES BOARD OF DIRECTORS & COMMITTEES EXPENSE REPORT NOTE: PLEASE REVIEW TRAVEL EXPENSE POLICIES BEFORE COMPLETING

The following expenses were incurred by while attending a meeting of the ο LSCU Board of Directors ο LSCU Executive Committee ο ____________________________________ Committee held at on , 20 . TRANSPORTATION (1) Commercial: (Receipt must be attached) ........................................................................$_______________ (2) Private: (

@ standard IRS mileage rate

TAXI (

# of miles ).........................$_______________

)..............................................................$_______________

PARKING (

)....................................................................................$_______________

LODGING (Receipt must be attached).............................................................................................$_______________ MEALS

(Mon)

(Tues)

(Wed)

(Thurs)

(Fri)

(Sat)

(Sun)

Bk. $

$

$

$

$

$

$______

Lun.$

$

$

$

$

$

$______

Din.$

$

$

$

$

$

$______

Tot.$

$

$

$

$

$

$______

Total Meals

______________

TIPS & OTHER EXPENSES ( TOTAL EXPENSES

) $_______________ (Explanation) $____________________

MAIL TO: League of Southeastern Credit Unions, Inc. Attn: Carol Lucas Post Office Box 380428, Birmingham, AL 35238 Make Check Payable To: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Approved By: ____________________, __________, President/CEO Effective with IRS change on January 1, 2010

(Adopted 12.15.2009) 28

Date Approved: ______________


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GENERAL POLICY STATEMENTS 1. All League directors are entitled to receive Credit Union Magazine at League expense upon request from each individual director. 2. Officials Insurance Coverage: All Board members, committee members, and chapter and district presidents shall be covered by travel accident insurance provided by the League and its affiliates. The League and its affiliates shall carry an officers’ and directors’ liability policy and professional liability coverage. 3. Directors and Officers Liability Coverage: Coverage of $1,000,000.00. Directors and Officers Liability coverage, provided through CUNA Mutual Group, protects the League’s Directors, including the Officer positions, committee members, and the Security Officer appointed according to NCUA regulations. The limits include defense, judgments, and settlements in suits that may arise against the insured while in the capacity of Director or Officer for alleged breach of duty, neglect, error, misleading statements, omissions or other wrongful acts. 4. The League Board shall meet at least four (4) times a year or more often, as required to conduct business of the League. 5. All board members shall receive proper orientation and training, and shall be encouraged to continue professional development. 6. The League will hold an annual planning session to review objectives established by the Board of Directors. 7. All League Board meetings and Committee meetings shall have official notes/minutes.

(Approved 3.24.2010)

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Associate Members Policy Pursuant to Article II, Section 3 of the LSCU Bylaws, the Board establishes an associate membership category for credit unions with a main office domiciled in a state other than Alabama or Florida with physical branch locations operating within the state of Florida or Alabama that is an affiliated member of the state league in which the main location is domiciled and a member in good standing of the Credit Union National Association. These dues are billed and payable on an annual basis. Pursuant to the authority in Article XI, Section 5 of the LSCU Bylaws, Associate Member Dues are $1,500 per associated credit union. These dues allow the credit union’s employees to attend educational functions, be members of the chapters and serve on the boards of chapters, if allowed by the chapter. Associate members are not entitled to vote on any LSCU matters, serve in any corporate capacity, or serve in any elected League position, but shall be entitled to attend League meetings. (Approved 10.30.2009)

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Dues Waivers Policy/Procedure Any credit union who wishes to request a waiver of their dues shall submit the request in writing to the President’s office with such request stating the reason for requesting the dues waiver and the amount (either full or partial) of the dues waiver. The President’s office shall review the request and review the financials of the credit union requesting the waiver and may grant, deny or modify the request. A credit union may appeal the decision of the President to the Board at a regularly scheduled Board meeting by providing written notice within 15 days of the President’s decision. The President will provide a report to the Board detailing the action taken on each dues waiver request. Items to be considered in the decision to grant, deny, or modify the request shall include, but are not limited to the following: 1. 2. 3. 4. 5. 6.

History of involvement in League functions; Support of CUPAC/CULAC; CEO’s service to the industry; History of Chapter Involvement Current Economic situation; Credit Union Financials including, but not limited to, the following: • Credit Union Net Worth; • Delinquent Loans to Loans Ratio; • Net Charge Offs to Average Loans; • Return on Average Assets; • Total Assets; and • Net Income 7. History of Dues Waivers; (Approved 10.30.2009)

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LSC (Service Corporation) Board Structure The League Chairman and Chairman-Elect will automatically serve as Chair and Vice Chair of the LSCU Service Corporation Board of Directors. Chairman will appoint three (3) additional members from non-Executive Committee members of the LSCU Board. Chairman will also appoint two (2) CU CEOs who are not board members to serve on the LSC Board (one from Alabama and one from Florida). The LSC Board will provide oversight to the LSCU Service Corporation. (Approved 10.30.2009)

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OFFICE OF THE PRESIDENT Board Policies Applied Exclusively to the President 1. The President is extended the privileges of the floor to speak on any topic coming before the annual membership meeting. 2. The responsibility for the League Annual Membership Meeting is given to the President. 3. The League President and Chairman of the Board shall decide the time and place of all Board meetings. 4. The President shall have an employment contract. 5. The League and its affiliates will provide reasonable travel expenses of accompanying spouse of the President/CEO when traveling at League expense. Since reimbursement of spousal travel expense is considered taxable income by the IRS, this will be reported on applicable W2 or 1099 form as taxable earnings. 6. All expenses for which the President requests reimbursement shall be submitted to the League Treasurer and must be approved prior to their disbursement. 7. Creation of or changes to staff job descriptions, changes of salary, decisions to hire or fire, shall be the responsibility of the President. 8. The President shall work with Board and follow policy related to investments set forth by the Board of Directors of LSCU. Policy is contained in this manual (page 21) 9. The President will provide each director a monthly analysis of the League’s financial affairs.

(Approved 3.24.2010)

33

/LSCU_Board_Governance_Manual_(final_copy-approved_  

http://www.lscu.coop/content/download/9796/114625/LSCU_Board_Governance_Manual_(final_copy-approved_3.24.2010).doc

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