What liabilities does the board of directors assume in its position?
A credit union director (or officer) is referred to as a fiduciary by law. This means a director holds a position of trust. A director has an affirmative duty to care for the property of others and can be held liable for failing to perform that duty. Because the members of a credit union are too numerous to handle any but the most basic decisions for the credit union, the law provides for them to elect directors fiduciaries to act on their behalf. A director has several duties: • A duty of loyalty. • Fiduciary duty. • The duty of due care. This is displaying the degree of care, which an ordinarily prudent and diligent person would exercise under similar circumstances. Further, if the credit union is suffering financial problems, directors are required to devote extra time and effort to the affairs and activities of the credit union. When directors are the target of lawsuits, they may be named individually, or the board may be named as a group. When the suit involves a policy decision,
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