corporate governance

Prospera’s Board and Management are committed to acting responsibly, ethically and with the highest standards of integrity to ensure that Prospera’s activities are continually structured and delivered in a manner that allows us to meet the needs of our members.

To achieve this, sound corporate governance business practices and policies have been adopted by the Board and cascaded throughout all levels of the organization. The Board of Directors strives to ensure that its governance is of the highest standard, while at the same time practical and transparent to Prospera members.

The Board’s governance responsibilities include, but are not limited to: • Board composition & committee structure; • Approval and monitoring of the strategic plan; • Selection, evaluation, development and

succession planning of the President and Chief Executive Officer (CEO);

• Decision-making framework; • Board assessment; • Risk assessment; and • Accountability and transparency mechanisms.

The Board’s governance model has been developed over time and is a blending of practices that are deemed to be most appropriate for Prospera. These practices include the following principles, which have been adopted by the Board:

• The Board governs and Management manages. The Board’s role is to ensure that Prospera has the appropriate Management in place. Day to day management is the responsibility of the CEO, who reports to the Board of Directors.

• The Board follows a consent agenda which includes items such as minutes and items of information that are provided to Directors in advance of the meeting. These items are accepted as read and agreed to unless a Director requests an item be removed from the consent agenda for discussion.

• The Chair and the CEO are the official spokespersons for the Credit Union and a decision made by the Board is a decision that is publicly supported by all Directors.

• Only the Board can make decisions that are binding on the organization; however, the Board may elect to delegate these responsibilities to its standing and ad hoc committees.

• The Board has committed to transparency in its overall governance of Prospera.

• The Board’s Governance Manual is reviewed biennially and any amendments are reviewed and approved by the Board.

governanceAs specified in the Credit Union’s Rules, Prospera’s Board of Directors is comprised of nine shareholding members each elected by the membership for a three-year term. As a whole, the Board is accountable for the stewardship and oversight of the management of the Credit Union. Although the Directors may have special expertise and points of view, they do not represent a particular constituency.

Collectively, the Board has over 100 years of Director experience specific to Prospera Credit Union and its predecessors (Fraser Valley and Edelweiss Credit Unions). Individual Director tenure ranges from 2–26 years.

ANGELA KAISER

STACEY CRAWFORD

ERIC NADIN KAREN LAING

PAULINE HAVELOCK TRACY GRAY

SYLVIA PRANGER AMYN SOMANI

KARL NOORDAM

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Angela holds designations as a Certified General Accountant as well as a Certified Financial Planner. She currently operates a public practice accounting firm that focuses on the financial, tax and accounting needs of individuals and small business corporations.

Angela believes strongly in loyalty to members, commitment to communities, strong governance, enterprise risk management and the value of the co-operative principles on which a credit union is built.

Other Board Appointment: Board Chair, Stabilization Central Credit Union

EDUCATIONAL PURSUITS IN 2014:• Institute of Corporate Directors (ICD) – Leadership, Character & Corporate Governance• Deloitte Risk Series - Strategic Analytics Through a Risk Lens• Dealing with Difficult People• Webinar - Compliance with Canada’s Amended PCMLTF Legislation • Success Through Strengths and Values• ICD - Technology Update• Moving Beyond Budgeting• FICOM Industry Conference• 2015 Compensation Trends - Hay Group• ICD Webinar - Tough Questions about IT• Economic Outlook• International Summit of Co-operatives

Angela KaiserB. Comm, CPA, CGA, CFP, ICD.D (Institute of Corporate Directors)

Board ChairDirector Since 2001

Angela’s educational background and experience, skills and passion are just some of the attributes that enable her to provide valuable input to the Board.

As a financial co-operative, Prospera Credit Union was built on strong values of co-operation and community. With this spirit and passion we focus on the power of putting Members First to build a better corner in our world.

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Throughout her 23 year tenure as a Director, Karen has served on every Committee of the Board, including the role of Chair from 2007–2010. She is currently the Board Vice Chair and Chair of the Investment and Lending Committee.

Karen has an impressive background in journalism and has served on many Boards in the community. Her community contributions include being elected to the Mission School Board of Trustees, and Mission City Council. Currently, Karen is Manager of Governance and Resource Development for Mission Community Services Society, one of the largest not-for-profit agencies in Mission.

Karen is a strong believer in the power of co-operatives and works diligently to promote that business model in the community.

EDUCATIONAL PURSUITS IN 2014:• FICOM Credit Union Industry Conference • International Summit of Co-operatives

Karen LaingICD.D (Institute of Corporate Directors)

Board Vice ChairDirector Since 1991

The real needs of real people come first at Prospera and the true value of putting people before profits is the cornerstone of our strong co-operative credit union. By working together with our members we help them to find creative ways to meet their financial needs today and in the years ahead.

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Stacey holds a diploma in Business Management and a Master of Arts in Leadership and Training. Currently the Economic Development Officer for the District of Mission, Stacey is responsible for managing the economic, tourism and film development portfolios of the municipality.

He has an extensive background as a community volunteer that includes past and current board governance with the Kinsmen Club of Mission, the Mission Regional Chamber of Commerce, the Canadian Youth Business Foundation, Community Futures Development Corporation and the Rotary Club of Mission Midday.

Stacey is an avid supporter of the philosophy that local decision making and local development are the most effective means for communities to shape their future.

Stacey CrawfordM.A.

Director Since 2012

A colleague once said to me, ‘Everything we say and do has absolute meaning and purpose.’ That idea stuck with me. Today, it reminds me how important our Prospera members are and how everything we do—no matter how small—defines us as a member owned financial co-operative. I am personally committed to ensuring we never lose sight of the little things that make a big difference.

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Tracy’s strengths in business include operations, human resources, sales, media relations and marketing. Throughout her career, she has held various business consultant and upper management positions.

In 2003, Tracy founded Discover Wines Ltd. in Kelowna and opened a second location ten years later in Kamloops. Since opening, Discover Wines has been number one in sales for BC wine retail stores.

Tracy gives back to the community by volunteering at the Women’s Enterprise Centre where she facilitates mentoring programs for women starting new businesses. She has served on a variety of Boards and has been invited to participate in government and economic development round table discussions.

In 2014 Tracy was elected to Kelowna City Council and also sits on the Central Okanagan Regional District.

Tracy GrayDirector Since 2010

Long before I became a Director at Prospera, I told people, ‘When I walk into a Prospera branch I feel special, it’s like the show Cheers where everybody knows your name.’ Our entire team at Prospera genuinely cares about our members; who they are, what’s important to them and how we can help them meet their financial goals.

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Pauline is passionate about the co-operative principles and the credit union movement and has over 30 years of experience in the financial industry.

As Corporate Secretary and Chief Governance Officer of Prospera for 23 years, Pauline has a comprehensive understanding of the Financial Institutions Act and regulatory requirements. During this time, Pauline developed strong leadership, communication and people skills.

Pauline volunteered on the Board for The Centre for Child Development (The Centre) and the Child Development Foundation of BC. She was ultimately hired as a consultant to assist the CEO in developing governance policies and strategic planning for the Board.Prior to joining The Centre, Pauline spent six years on the Board of the United Way of the Fraser Valley, serving as president for two of those years.

EDUCATIONAL PURSUITS IN 2014:• ICD - Leadership Character and Corporate Governance • CUDA course completed• Webinar - Best Practices in CSR Governance• Fraser Valley Economic Summit• International Summit of Co-operatives

Pauline HavelockDirector Since 2013

Member First is a key value at Prospera. Our members are shareholders and we value their loyalty by listening and providing advice to help them achieve their financial goals. We apply the ‘golden rule’ through our co-operative principles, i.e., treat others how you wish to be treated.

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Eric has over 30 years of business experience as a professional engineer, business manager and leader. After spending a number of years in construction for BC Hydro, he recently became the Operations Training Program & Strategy Manager, overseeing the development and delivery of technical, safety and apprentice training programs for employees.

Eric’s community involvement includes serving as the Chair of the Association of Professional Engineers and Geoscientists BC Mentoring Committee, helping to mentor engineers as they work towards their professional designation. He is a graduate of the Vancouver Leadership Program which involved participation in a year-long community project for KindActs Network Association of BC and in 2010, he was nominated for the BC Hydro Business Mentor Award.

Eric is a strategic thinker with strong business acumen who enjoys building valued working relationships in a team environment and developing innovative solutions based on a set of core values.

EDUCATIONAL PURSUITS IN 2014:• Enrolled in the Institute of Corporate Directors Program – First of four modules completed

Eric NadinDirector Since 2011

I’m proud to be part of a credit union team that demonstrates on a daily basis that we care about each member’s financial well-being and continue to make a difference supporting and giving back to the communities we serve.

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Serving the membership in an active and accountable manner is Sylvia’s goal. This involvement has strengthened her resolve to ensure Prospera continues to be strong, vibrant and relevant to our staff and members.

Sylvia’s extensive community experience on numerous Boards and committees has provided a solid foundation of skills for the credit union role. These skills include budgeting and financial management, leadership and communication skills, sound decision making abilities and the capacity to contribute effectively as part of a team.

Sylvia served for 15 years on the District of Kent municipal council including six years as Mayor and recently served seven years as a Vice-Chair Commissioner with the Agricultural Land Commission. In November 2014 she made the personal decision to re-involve herself and was successfully re-elected as a Councillor.

Past volunteer activities include serving on the fundraising committee for the new Emergency Room at the Chilliwack General Hospital, the Healthy Communities Committee for Kent/Harrison, founding member of the Kent Harrison Foundation, past President of the Harrison/Agassiz Rotary Club, Vice Chair of the RVRD Hospital Board and Director of the Fraser Basin Council.

Sylvia PrangerDirector Since 1996

With nearly 70 years of experience serving our members, Prospera continues to be a community builder, committed to giving back to our members and communities in good times as well as in tough times. Our continued dedication to volunteerism within our local communities also helps to ensure that we are able to contribute in a meaningful way.

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As a Certified General Accountant, Karl operated his own accounting practice (Noordam & Co, CGA) for 30 years in Surrey before merging the firm with Vohora & Co, CA in 2012. His profession has stood him in good stead in exercising his role as Director for Prospera Credit Union for the past 25 years.

Karl has served on all committees of the Board and acted as past Chair of the Investment & Lending Committee. He is currently Chair of the Audit Committee. From 1998 to 2007, Karl was privileged to serve as Board Chair during which time Fraser Valley Credit Union merged with Edelweiss Credit Union to form Prospera Credit Union.

In 2002, Karl attended the London School of Business (UK) and obtained his Certified Credit Union Director (CDD) designation.

Karl is a strong, community-oriented person and a long-time resident of Abbotsford and Chilliwack. He has been very involved in volunteer capacities and has served for many years on the Board of Trustees of Emmanuel Free Reformed Church in Abbotsford as both Board Chair and Treasurer.

EDUCATIONAL PURSUITS IN 2014:• ICD - Audit Committee Effectiveness

Karl NoordamCGA, CDD (Certified Credit Union Director)

Director Since 1988

As an organization providing financial services to our members, it is not enough to say, ‘What services can we provide for you, our member?’ By taking the time to build relationships, the message we want members to receive is, ‘How can we best enhance your financial position in life to ensure that you have the security you need to meet the challenges of the future?’

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During his time as a Director with Prospera, Amyn has served on several committees including Audit, Conduct Review & Governance, Human Resources, and Nominations & Elections.

As CEO of Kazawest Services Inc. and enCall Property Services, Amyn leads teams dedicated to taking excellent care of property owners and occupants by providing property management, property maintenance and investment real estate brokerage services.

His educational background includes a Bachelor of Science in Computer Science from Simon Fraser University, Finance & Accounting studies at the Stanford Graduate School of Business, and Leadership at the Richard Ivey School of Business. Amyn enjoys finding ways to help our communities. In addition to directing corporate contributions, he is also dedicated to helping youth by coaching sports, assisting elementary schools, and volunteering with youth service organizations.

Amyn SomaniB.Sc.

Director Since 2012

Before I was a Director of the Board at Prospera, I was a member. The relationship I developed with our South Granville Branch staff has been one based on trust and value. I love seeing our continued success with creating strong relationships and value for our members.

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DIRECTOR COMPENSATION Prospera offers a level of remuneration that both reflects its co-operative heritage and satisfies the market reality in order to attract and retain Directors with the business experience and skills required to achieve the Credit Union’s strategic plan.

The Director Remuneration Policy is reviewed every three years by the Conduct Review and Governance Committee which may, from time to time, retain the services of an independent remuneration consultant.

Annual Compensation levels are as follows:

Board Chair $27,000Vice Chair $16,500Committee Chairs $16,500 (Audit Chair receives an additional $1,000)All other Directors $13,500

In addition to the honorarium noted above, Directors receive a $500 per diem for attendance at Board meetings and a $300 per diem for Committee meeting attendance.

DIRECTOR EXPENSESDirectors are reimbursed for mileage, travel and business expenses incurred on Credit Union business. Directors are expected to provide receipts for all expenses and reimbursement is based on reasonable and accountable out of pocket expenses.

EDUCATIONIn accordance with the Credit Union Incorporation Act, all Directors are required to complete Level A of the Credit Union Director Achievement (CUDA) Program – ‘Foundations of Governance.’

Additionally, Directors are required to engage in learning activities that will expand their knowledge and enhance their role as a Credit Union Director.

Ongoing professional development is supported by providing periodic special presentations in-house with subject matter experts at Board and Committee meetings. Presentations over the past year included: • FICOM Update on the Credit Union System – Carolyn Rogers, Superintendent of Financial Institutions and Chief Executive Officer• Treasury Risks in Current Environment – In-house presentation• Risk Governance – Peter Reimer, PRA Group (Internal Auditors)

To further encourage active participation with individual continuous learning, Prospera provides funding up to $15,000 per Director for each three-year term. This allowance covers registration, travel, accommodation and meal costs for attendance at conferences and seminars. (Required and optional CUDA modules are available to all Directors and are not included in the $15,000 allowance.)

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SUMMARY OF COMPENSATION AND EXPENSES FOR 2014‘Gross Remuneration’ includes annual honorariums as well as meeting and education session per diems. ‘Expenses and Education’ figures include mileage, conference and education session registration fees with related expenses (i.e. travel, accommodation and meals). Additionally, this reporting includes data plan costs for a Prospera issued iPad for Board use as well as a nominal telecom allowance.

Director 2014 Gross Expenses & Total Remuneration Education

Angela Kaiser - Board Chair $ 50,431 $ 8,798 $ 59,229Karen Laing - Vice Chair 34,900 6,795 41,695Stacey Crawford 25,500 1,142 26,642Tracy Gray 21,131 6,983 28,114Pauline Havelock 24,850 7,310 32,160Eric Nadin 24,200 9,562 33,762Karl Noordam 25,450 1,738 27,188Sylvia Pranger 25,200 2,191 27,391Amyn Somani 22,569 1,984 24,553

Total $ 254,231 $ 46,503 $ 300,734

BOARD MEETING ATTENDANCEThe Board of Directors met twelve times in 2014 and Director excusals were approved as follows:Amyn Somani – MarchKaren Laing – AprilEric Nadin – SeptemberKarl Noordam – December

BOARD COMMITTEESMuch of the Board’s groundwork takes place at the Committee level and the 2014 assignments* and attendance were as follows:

Conduct Review Investment Audit & Governance & Lending

Committee Members Amyn Somani Karen Laing Karl Noordam(Chair noted in bold) Sylvia Pranger Karl Noordam Stacey Crawford Angela Kaiser Tracy Gray Eric Nadin

Number of Meetings 5 4 4

Attendance 100% 100% 100%

Nominations Human Member / Strategic & Elections Resources Community Sub-Committee Relations

Committee Members Sylvia Pranger Eric Nadin Stacey Crawford Angela Kaiser(Chair noted in bold) Tracy Gray Angela Kaiser Sylvia Pranger Stacey Crawford Pauline Havelock Karen Laing Pauline Havelock Eric Nadin

Number of Meetings 2 4 4 3

Attendance 100% 100% 100% 100%

*Board Chair is an ex-officio member on all other Committees

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CEO COMPENSATION DISCLOSUREOur Compensation PhilosophyProspera’s Compensation Philosophy applies equally to all employees. We are committed to provide and openly communicate total compensation programs that are competitive, flexible and aligned with our business goals. We balance our cash compensation with the ability to pay for our desired compensation position, taking into account other total compensation programs that may be higher than our target market strategy.

Our rewards system has several principles in mind, most notably:• To align employees with Prospera’s mission, vision, values and goals by incenting and rewarding employees for their contribution and impact on the organization’s achievements.• To align organizational, team and individual success to continually add value for our members.• To reinforce the behaviours and values that contribute to the achievement of our goals.• To ensure reward practices are consistent and applied fairly across employee groups.• To protect the health and welfare of our employees.

Our goal is to target the 50th percentile (also known as P50 or the Median; it is the value in which one-half of the observations included in the sample are above and one-half are below) for all of our programs. We review the external marketplace on a continuing basis through the use of published and custom surveys. We look for data which matches the appropriate organization size and geographic and industry area in which we recruit.

Compensation ProgramsProspera reviews compensation programs for all employees with the Human Resources Committee of the Board on an annual basis. The Board of Directors is responsible for CEO compensation and for determining any specific elements for the CEO.

Prospera has defined salary structures and we have published salary ranges up to senior management levels. We have a flexible benefits program and a defined benefit pension plan that is offered to eligible part-time employees and all full-time employees. We have a short-term incentive plan that applies to all non-wealth management employees in the same way and has targeted eligibility levels that are scaled up based on position complexity, responsibility and market practices.

CEO Compensation Summary The CEO’s full compensation package is reviewed by the Board of Directors annually, based on a Central 1 Credit Union executive compensation survey and the Hay Group’s industry survey for executive compensation in credit unions. Prospera targets the 50th percentile for base salary and total target cash in the comparator market.

For the fiscal year ending December 31, 2014, the CEO earned the following compensation:

Description Amount

Base Salary $ 332,193

Variable Pay $ 103,671(*paid in 2015 for 2014 fiscal year performance)

Pension, benefits and perquisites Please see descriptions below

CEO Short-Term IncentiveThe CEO’s Short-Term Incentive (STI) is the same Prospera Variable Pay Plan that applies to most employees in the organization, with a target commensurate to the employee’s level of responsibility and influence. The STI is based on the achievement of both organizational goals and individual performance objectives and leadership competencies. The target for the CEO has been established at 40% of base salary. For fiscal year 2014, the organizational scorecard was:

Measurement Weighting

Net Income from Operations 45%Portfolio Deposit Growth 25%Portfolio Loan Growth 20%Net Promotor Score Annual Average 10%

In fiscal year 2015, the CEO received $103,671 based on the achievement of 2014 organizational performance, and factored with individual performance and the overall funding available for the total organization. The STI plan specifies that all payments under the plan are contingent on audited financial results and final board approval. While the STI was earned for performance in fiscal year 2014, actual payment is made in fiscal year 2015, once fiscal year 2014 results are finalized.

Benefits, Pension and PerquisitesThe group benefits provided to the CEO are consistent with those received by all other employee groups within Prospera. As part of the standard coverage, the CEO participates in the flexible benefit plan that provides plan credits to the participant in order to select a custom benefits package that is aligned with their life situation (e.g. single/married, dependent/spousal coverage) and which offers plan credits based on a defined formula.

The CEO is eligible for retirement benefits through the BC Credit Union Employees Pension Plan – 1.75% Division, as well as the Prospera Credit Union Supplemental Pension Plan (SERP). The SERP is a supplemental pension that mirrors the base plan and is in place for certain executive employees whose benefits are restricted by reason of limits on retirement benefits prescribed under the Income Tax Act.

Annually, both the employee and the employer are required to contribute to the 1.75% Pension Plan in an amount set by the Trustees of the Plan, in consideration of the recommendations from a qualified actuary regarding the total required level of contributions to ensure that the plan will be able to meet future obligations. Plan members are not required to contribute to the SERP.

The pension formula used for both plans to determine the annual pension is 1.75% of average earnings multiplied by years of service. The SERP for the CEO includes STI earnings in the calculations.

Pension Indexing – Pension earned prior to 2010 will be indexed automatically at 50% of the Consumer Price Index (CPI). Pension earned subsequent to 2009 will be indexed on an ad-hoc basis subject to consent by the Trustees of the Plan.

Additional benefits and perquisites are also provided to the CEO. These include a car allowance and flexible perquisite account. The combined value of both is equivalent to 10% of base salary.

SeverenceThe CEO has a severance agreement of up to 18 months base salary plus one additional month for each completed year of service up to a maximum of 24 months. The CEO would be entitled to STI for service up to the last day worked in a calendar year. The agreement does not provide for benefits continuation.

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PROSPERA EXECUTIVE MANAGEMENT TEAM Executive management team bios are available on prospera.ca

Bruce HowellPresident & Chief Executive Officer

Waheed Hirji Chief Operating Officer

Greg DyckChief Information Officer

Marv NeufeldSenior Vice President, Risk

Heather JohnsonSenior Vice President, Human Resources

Sundeep SandhuSenior Vice President, Marketing

Michael KerdachiVice President, Finance

Jayne TaylorVice President, Sales & Service

Dan WhalleyVice President, Branch Operations

Michael YeatesVice President, Business Banking

Grant GambleVice President, Wealth Management

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