Disclosure Of Director's Expenses At Annual Meeting - Q3 1999By the Division of Banks
It is the position of the Division that a credit union is not only required to disclose those director related expenses which are actually reimbursed to directors, but is also required to disclose expenses paid by the credit union directly on behalf of and related to a director's duties as a board or committee member. Mass. Gen. Laws chapter171 section 16 sets forth the duties of the credit union's Auditing Committee. Included within this section is the requirement for the Committee to ensure that a thorough audit of the books, including income and expenses, is completed annually and that such Committee make an annual report at the credit union's annual meeting. Section 20 focuses on the prohibition for a director's receipt of compensation and the credit union's ability to reimburse directors for actual expenses incurred in the performance of their responsibilities as directors or committee members. Such reimbursed expenses are required to be reported at the annual meeting. Additionally, the credit union is accountable to its members and should report to its members at the annual meeting a complete accounting including income and expenses. While a credit union may have a practice of paying directly for certain expenses attributable to directors, it would not be permissible for the credit union to exclude theses expenses from disclosure as director related expenditures. At the annual or special meeting at which expenses are reported to the membership as a whole, the expenses of the directors may be aggregated and reported by type of expenditure. Such categories could include meetings, travel and events. The "expenses" attributable to the directors would include those which are actual reimbursements to the directors and those paid by the credit union which are attributable to and directly related to the director's position as board member. A credit union may report separately the amount of actual reimbursed expenses, provided that all expenses attributable to directors are reported.