3 minutes
The invitation list.
A question relating to the conduct of board meetings that occasionally arises is: Who is an appropriate attendee? That is, who must be there, who can be there, and who should not attend?
The cardinal principle in deciding who will attend a particular board meeting is recognizing for whose benefit the meeting was convened and who convened it. The answer to both is “the credit union’s board of directors.” A board meeting is simply what it purports to be: a meeting of the board. And it is the board’s members or its chair who decide who will attend.
Who has a right to attend a board meeting? Only the members of the board, the directors. No one else has the right to be present during a meeting. Included among those who do not have a right to be present and observe a board meeting are members, staff—including the chief executive officer, supervisory committee members, and honorary/advisory directors or directors emeriti.
While directors have the authority to determine who will attend a board meeting, various rationales exist for deciding when individuals other than directors should be excluded:
- when the matters discussed by the directors may be confidential or sensitive in nature—involving operational strategies, or investigations;
- when a comfort zone needs to be created for a discussion of organizational affairs—in which effective dialogue and human interaction are more apt to take place; and
- when advice is being sought from experts the board does not wish to expose. Indeed, such advice may come from professionals with a right of privileged communication, such as the board’s legal counsel.
Notably, there are times when even a director should not be included in a particular board meeting. For example, when a board member has applied for a loan with the CU, he or she should be excluded from the meeting at which the remaining directors consider and vote on the application.
Similarly, if there is a matter in which a director has a conflict of interest, he or she should be excused from a board session at which it is addressed. Consequently, in a situation where action regarding a director’s personal conduct is being considered, that director may be excluded from the meeting. In addition, a director may be removed from a meeting if his or her actions are untoward or inappropriate.
When circumstances permit, the board—at its own discretion—may invite individuals it deems fit to attend its board meetings. Typically, a board will decide to permit an individual or a class of individuals to attend a meeting in one of two ways: on an ad hoc basis or as a policy matter.
An ad hoc approach is used most frequently where a board will be convening an executive session or a special meeting. In advance of the gathering, the board will establish who it desires to be present, such as the credit union’s CEO, attorney or other consultant.
Alternatively, a board may institute a policy regarding the right to attend its meetings and which ones. If a CU has directors emeriti, a written board policy may address when such officials may and may not attend.
The general rule establishing who may attend a board meeting carries over to the other types of meetings directors hold. These include, beyond the statutorily required regular monthly meeting, special meetings called pursuant to the credit union’s bylaws and the required organizational meeting following the credit union’s annual meeting at which the board officers are elected.
At bottom, board meetings are not open meetings; those with a right to attend are limited. Nevertheless, the fact that members do not have a right to attend board meetings does not curtail their ability to learn how their cooperative is being managed and the basis for actions that underpin its operations.
A credit union’s members have a right—pursuant to National Credit Union Administration Rules & Regulations, § 701.3—to review, among other institutional documents, the minutes of board meetings.
CUES member Stephen A.J. Eisenberg is EVP/general counsel for $16 billion Pentagon Federal Credit Union, Alexandria, Va.
