0rientation for Prospective Candidates

8/8/2019 0rientation for Prospective Candidates

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DUTIES AND

RESPONSIBILITIES OF THE

BOARD AND STATUTORYCOMMITTEES OF A CREDIT

UNION

ORIENTATION PROSPECTIVE CANDIDATES


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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


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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.


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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.


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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


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PRINCIPLES

The Co-operative principles areguidelines by which Co-operatives puttheir values into practice.


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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.


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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.


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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.


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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.


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THIRD PRINCIPLE:

MEMBER ECONOMIC

PARTICIPATION

Members usually receive limitedcompensation, if any, on capitalsubscribed as a condition ofmembership.


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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;


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THIRD PRINCIPLE:

MEMBER ECONOMIC

PARTICIPATION

benefiting members in proportion totheir transactions with the co-operative;and

supporting other activities approved bythe membership.


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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 .


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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.


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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.


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SEVENTH PRINCIPLE:

CONCERN FOR COMMUNITY

Co-operatives work for the sustainabledevelopment of their communitiesthrough policies approved by theirmembers.


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IDEALIZED FUNCTIONS OF

THE BOARD

1. Supreme Decision Centre

2. Advisory3. Trustee

4. Perpetuating

5. Symbolic


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CREDIT COMMITTEE

Regulation 50, 3(c) (i) Authority (LegalStatus)

Regulation 34 Approval of Loans

Role of Credit Committee


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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.


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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.


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SUPERVISORY

COMMITTEE

RE

FER

TORE

GULA

TION 50 (3) (c) (ii) LEGAL STATUS

ROLE OF SUPERVISORYCOMMITTEE


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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.


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SUPERVISORY

COMMITTEE

APPOINTMENT

R

egulation 50 3 (c) (d)

PURPOSE

To keep an eye on the operation of theCredit Union on behalf of themembership.


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SUPERVISORY

COMMITTEE

ROLE

To ensure compliance with the laws ofthe Credit Union.


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Fit and Proper

Here are some questions that

prospective and current boardand committee members should

think about:


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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?


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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?


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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?


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3. How frequent are executive sessionsof the board?

4. Does the society take full advantageof the protections allowed to directors

under the law


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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?


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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?


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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


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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?


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9. Will I have free access to key

members of management ?

or will all of my information about theSociety essentially come from theManager?


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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?

Date post:	10-Apr-2018
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