0rientation for prospective candidates
TRANSCRIPT
-
8/8/2019 0rientation for Prospective Candidates
1/36
DUTIES AND
RESPONSIBILITIES OF THE
BOARD AND STATUTORYCOMMITTEES OF A CREDIT
UNION
ORIENTATION PROSPECTIVE CANDIDATES
-
8/8/2019 0rientation for Prospective Candidates
2/36
OUTLINE
Definition of a Co-operative Society
Definition of a Credit Union
The Co-operative Principles Legal Structure of the Board
Idealised Functions of the Board
Credit Committee Supervisory Committee
-
8/8/2019 0rientation for Prospective Candidates
3/36
DEFINITION OF
CO-OPERATIVE SOCIETY
A co-operative is an autonomousassociation of persons united voluntarilyto meet their common economic, socialand cultural needs and aspirations
through a jointly owned anddemocratically controlled enterprise.
-
8/8/2019 0rientation for Prospective Candidates
4/36
DEFINITION OF A
CREDIT UNION
Credit Union means a society which hasas its objectives the promotion of thriftand the creation of a source of creditfor its members, the majority of whom
are not agriculturists, for provident orproductive purposes.
-
8/8/2019 0rientation for Prospective Candidates
5/36
STRUCTURE OF A
TYPICAL CREDIT UNION
MEMBERS INGENERAL MEETINGS
CREDITCOMMITTEE(5)
BOARDS OF DIRECTORS (9) (12)
PRESIDENT, VICE PRESIDENT,TREASURER, SECRETAY
SUPERVISORYCOMMITTEE(3) (5)
MANAGER
EMPLOYEES
EDUCATION COMMITTEEANNUAL GENERALMEETING
BYE-LAWREVIEWETC.
AD HOC COMMITTEES
-
8/8/2019 0rientation for Prospective Candidates
6/36
PRINCIPLES
The Co-operative principles areguidelines by which Co-operatives puttheir values into practice.
-
8/8/2019 0rientation for Prospective Candidates
7/36
FIRST PRINCIPLE:
VOLUNTARY AND OPEN
MEMBERSHIP
Co-operatives are voluntary organisations,open to all persons able to use theirservices and willing to accept theresponsibilities of membership, without
gender, social, racial, political orreligious discrimination.
-
8/8/2019 0rientation for Prospective Candidates
8/36
SECOND PRINCIPLE:
DEMOCRATIC MEMBER CONTROL
Co-operatives are democraticorganisations controlled by their
members, who actively participate insetting their policies and makingdecisions.
Men and women serving as electedrepresentatives are accountable to themembership.
-
8/8/2019 0rientation for Prospective Candidates
9/36
SECOND PRINCIPLE:
DEMOCRATIC MEMBER
CONTROL
In primary, Co-operative members haveequal voting rights (one member, onevote) and Co-operatives at other levelsare also organized in a democraticmanner.
-
8/8/2019 0rientation for Prospective Candidates
10/36
THIRD PRINCIPLE:
MEMBER ECONOMIC
PARTICIPATION
Members contribute equitably to, anddemocratically control, the capital oftheir co-operative.
At least part of that capital is usually the
common property of the co-operative.
-
8/8/2019 0rientation for Prospective Candidates
11/36
THIRD PRINCIPLE:
MEMBER ECONOMIC
PARTICIPATION
Members usually receive limitedcompensation, if any, on capitalsubscribed as a condition ofmembership.
-
8/8/2019 0rientation for Prospective Candidates
12/36
THIRD PRINCIPLE:
MEMBER ECONOMIC
PARTICIPATION
Members allocate surpluses for any or allof the following purposes:
developing their co-operative, possibly
by setting up reserves, part of which atleast would be indivisible;
-
8/8/2019 0rientation for Prospective Candidates
13/36
THIRD PRINCIPLE:
MEMBER ECONOMIC
PARTICIPATION
benefiting members in proportion totheir transactions with the co-operative;and
supporting other activities approved bythe membership.
-
8/8/2019 0rientation for Prospective Candidates
14/36
FOURTH PRINCIPLE:
AUTONOMY AND
INDEPENDENCE
Co-operatives are autonomous, self-help organisations controlled by their
members.
If they enter into agreements withother organisations, including
governments or raise capital fromexternal sources, they do so on termsthat ensure democratic control by theirmembers and maintain their co-o erative autonom .
-
8/8/2019 0rientation for Prospective Candidates
15/36
FIFTH PRINCIPLE:
EDUCATION, TRAINING AND
INFORMATION
Co-operatives provide education and trainingfor their members, elected representatives,
managers and employees so they cancontribute effectively to the development oftheir Co-operatives.
They inform the general public particularlyyoung people and opinion leaders about thenature and benefits of co-operation.
-
8/8/2019 0rientation for Prospective Candidates
16/36
SIXTH PRINCIPLE:
CO-OPERATION AMONG
CO-OPERATIVES
Co-operatives serve their members mosteffectively and strengthen the co-operative movement by workingtogether through local, regional and
international structures.
-
8/8/2019 0rientation for Prospective Candidates
17/36
SEVENTH PRINCIPLE:
CONCERN FOR COMMUNITY
Co-operatives work for the sustainabledevelopment of their communitiesthrough policies approved by theirmembers.
-
8/8/2019 0rientation for Prospective Candidates
18/36
IDEALIZED FUNCTIONS OF
THE BOARD
1. Supreme Decision Centre
2. Advisory3. Trustee
4. Perpetuating
5. Symbolic
-
8/8/2019 0rientation for Prospective Candidates
19/36
CREDIT COMMITTEE
Regulation 50, 3(c) (i) Authority (LegalStatus)
Regulation 34 Approval of Loans
Role of Credit Committee
-
8/8/2019 0rientation for Prospective Candidates
20/36
DUTIES
Regulation 34
In the case of a Society whose primaryobjective is the granting of loans to itsmembers and in which name the words
Credit Union appear, loans shall beapproved by the Credit Committee.
-
8/8/2019 0rientation for Prospective Candidates
21/36
PRIMARY DUTIES
Responsibility for the approval andgeneral supervision of all loans tomembers.
Act in accordance with the loan policy
set down by the Board of Directors.
-
8/8/2019 0rientation for Prospective Candidates
22/36
SUPERVISORY
COMMITTEE
RE
FER
TORE
GULA
TION 50 (3) (c) (ii) LEGAL STATUS
ROLE OF SUPERVISORYCOMMITTEE
-
8/8/2019 0rientation for Prospective Candidates
23/36
SUPERVISORY
COMMITTEE
Regulation 50 3 (d)
Amember of the SupervisoryCommittee shall not be eligible formembership to the Board of Directors
or to the Credit Committee.
-
8/8/2019 0rientation for Prospective Candidates
24/36
SUPERVISORY
COMMITTEE
APPOINTMENT
R
egulation 50 3 (c) (d)
PURPOSE
To keep an eye on the operation of theCredit Union on behalf of themembership.
-
8/8/2019 0rientation for Prospective Candidates
25/36
SUPERVISORY
COMMITTEE
ROLE
To ensure compliance with the laws ofthe Credit Union.
-
8/8/2019 0rientation for Prospective Candidates
26/36
Fit and Proper
Here are some questions that
prospective and current boardand committee members should
think about:
-
8/8/2019 0rientation for Prospective Candidates
27/36
WHY HAVE I BEEN ASKED TO JOIN THE BOARD?
Is it because of my industry expertise or
business acumen, or is it because I have
credentials that will be impressive to
investors and the world at large?
-
8/8/2019 0rientation for Prospective Candidates
28/36
Does management truly value andencourage constructive debate andcriticism, or is the prevailingmentality that the primary role ofthe board is to monitor the
performance of the Manager and tocompensate him or herappropriately?
-
8/8/2019 0rientation for Prospective Candidates
29/36
2. What do current directors say
about the culture
of theCo-operative?
How interested do the other directorsseem to be ?
Are directors given an adequateeducation about the business of theSociety and the industry in which itoperates?
-
8/8/2019 0rientation for Prospective Candidates
30/36
3. How frequent are executive sessionsof the board?
4. Does the society take full advantageof the protections allowed to directors
under the law
-
8/8/2019 0rientation for Prospective Candidates
31/36
5. Is the Societys insurance
adequate to protect me?Reg.31
Are the policy limits adequate in thejudgment of a reputable insurance
consultant?
Have I received and/or reviewed a copy ofthe application and the policy?
Have I had the terms of the policy reviewedby a lawyer with experience with respect tocoverage issues?
-
8/8/2019 0rientation for Prospective Candidates
32/36
6. Does the Society have an
experienced internal audit staff anda strong outside auditor?
What do the outside auditors say
about the willingness of managementto follow its advice and to adhere tothe best accounting practices?
Does management insist oncompliance with best practices inthe areas of financial reporting andcontrols?
-
8/8/2019 0rientation for Prospective Candidates
33/36
7. Compensation issues are
especially important
Does the Society have a
compensation philosophy discussedand approved by the full board?
What procedures are followed inapproving transactions withmanagement?
Stipend vs- Honorarium
-
8/8/2019 0rientation for Prospective Candidates
34/36
8. Does the general counsel attend boardmeetings and is he or she available to
answer questions?
Is the Society represented by counsel
that is experienced andknowledgeable about the co-operative?
How important is the Society to thelaw firms overall financial well-being?
-
8/8/2019 0rientation for Prospective Candidates
35/36
9. Will I have free access to key
members of management ?
or will all of my information about theSociety essentially come from theManager?
-
8/8/2019 0rientation for Prospective Candidates
36/36
10. Am I willing to be unpopular orcontroversial if being so isnecessary to do what is right for
shareholders?
Am I willing to resign from the boardor committee if my efforts areunsuccessful?