dialogue with general members at the annual general meeting. • the annual general meeting of the general assembly of members should be adequately promoted to ensure sufficient member participation. continuity • the board should create strategies to maintain the competitiveness and sustainability of the credit union. • the board should create succession plans for both directors and management that ensure the continued existence of the credit union. • the board should approve a disaster management and recovery plan. balance • the composition of the board should aim to adequately reflect the demographic make up of its members and balance the financial service demands of members. • the board should seek to balance diversity and experience, but all directors must meet the standards of individual governance. accountability • the board is formally accountable to the general assembly of members, which is the highest governing body. • the roles and responsibilities of the board, committees and managers should be established clearly in the bye - laws or other policies. • it is the duty of the board to establish strategic direction, approve policies and monitor management ’ s implementation of these policies and achievement of targets. • it is the duty of management to prepare the plan and budget, undertake operations, implement the policies approved by the board and achieve the targets set forth. individual governance in order to perform their collective duties, the individual board members and managers have an obligation to maintain ethical conduct and professionalism and to speak with a single voice once board decisions have been made. board members are also expected to possess the skills and technical capacity necessary to fulfill their duties. integrity • the credit union should adopt a standardized code of conduct clearly explaining proper behavior. • directors or managers must not have criminal backgrounds, recent bankruptcies or penal backgrounds. • immediate family members should not serve on the board or in management at the same time. • board members must excuse themselves from participating in discussions and voting on matters from which they or their family have a potential conflict of interest. • the board must approve loans to directors or management. all such insider loans must be made within the approved credit policy parameters and will be reported on a regular basis to the full board. • directors with delinquent loans more than three months will be removed from their position. competence • all members of the board should have basic financial literacy, including the ability to interpret financial statements and standards, or commit to acquiring these skills through education or training within the first year of service. • individual members should have specialized financial or business skills and / or a memberfocused viewpoint. commitment • directors should be willing and able

economies ( figure 24 ). the structural deficit significantly exceeded the 1 percent mediumterm objective in 2016 and is estimated to stand at 3. 9 percent in 2017 ( figure 25 ). as a matter of fact, the european commission has included romania into the significant deviation procedure from the medium - term objective. when actual gdp growth exceeds potential growth, it is recommended to make savings for fiscal consolidation reasons. additional income from above - potential economic growth allows for the financing of extra spending in the short run only. yet, this expenditure is of a permanent nature, while income is temporary, as it will decline, ceteris paribus, when the economy returns to normal ( potential ) growth rates. therefore, above - potential growth conceals a structural deficit larger than the cash deficit. today ’ s structural deficit is, however, the cash deficit of tomorrow which will need to be financed under circumstances that may turn unfavourable for emerging economies. this mix between an expansionary budgetary and fiscal policy during a period of abovepotential economic growth and the worsening global market sentiment towards emerging economies in general can enhance volatility and affect financial stability via several channels : the interest rate, the exchange rate, the inflation rate. the advance in household indebtedness can cause these risks to pass through from the macroeconomic level to the microeconomic level for debtors. last years ’ environment marked by low interest rates and sustained increase in new loans favours the build - up of possible vulnerabilities concerning the sustainability of the level of indebtedness through both banks and nbfis ( figure 26 ), especially for lower - income debtors. the fact that the great majority of the stock and flow of housing loans and corporate loans are variable - rate loans ( figure 27 ) is an aggravating factor for financial stability in the context of the start of a new interest rate hike cycle – for external reasons, domestic reasons or for a combination of reasons. the fact that the advance in household indebtedness occurs concurrently with the high economic growth rates indicates the problems of economic growth : it is unbalanced and it leads to deeper inequality between social groups. debt service - to - income ratio for debtors earning minimum to average wage economy - wide stands higher than that for debtors earning double the average wage, notably among borrowers with housing loans ( figure 28 ). at the same time, the debt service for new loans taken by households earning minimum to average wage economy