February 1, To all Nominees:

Transcription

1 February 1, 2012 To all Nominees: Thank you for placing a nomination for directorship with Northern Savings Credit Union. Nominations close on February 29, 2012; however, if necessary, the closing date may be extended by the Nominating Committee. Enclosed you will find: Credit Union Directorship Handbook Nominee Acceptance and Declaration Form Director Nomination Form Candidate Statement Please read the enclosed Credit Union Directorship Handbook before proceeding and completing the nomination forms and statement. Once you have completed the forms, please return them by February 29, 2012 addressed to: Returning Officer Northern Savings Credit Union rd Avenue West Prince Rupert, BC V8J 1K8 info@northsave.com The Nominating Committee will consider all applications in March, and may request an interview with you at that time. Once nominations are confirmed, candidate profiles will be posted in each respected area. Should you have any questions, please contact our office by phone at or by at info@northsave.com. Yours truly, Returning Officer Northern Savings Credit Union

2 THE CREDIT UNION DIRECTORSHIP HANDBOOK This handout is divided into four sections: 1. Overview 2. Director responsibilities 3. Director duties 4. Frequently asked questions 1. Overview The Board of Directors of the credit union comprised of members who have been elected by the membership-at-large to oversee the affairs of the credit union on the membership s behalf. Thus, the Board represents the real owners of the credit union the members. It serves as a trustee charged with the responsibility of overseeing the affairs of the credit union so that its financial position is protected and, if at all possible, enhanced. Due to the complex and technical nature of the financial services business, boards delegate the responsibility for the strategic and day-to-day management of the affairs of the credit union to a paid professional manager who in turn employs a staff to run the business. The concept of membership is a very important one for the Board to understand. In today s world, the traditional concept of credit union membership has changed in that our credit union is comprised of over 18,000 individual people scattered throughout the North Coast and other parts of B.C. and the world. The close community bond and local knowledge that for many years was a hallmark of credit unionism has been lost to a great extent. The Board, therefore, represents the interests of a broadly-based and diverse group of people and it has become increasingly difficult for a Board to truly represent the membership. This has resulted in modern credit union boards having to make every effort possible to ascertain the wishes and wants of the broad membership in order to make business decisions that allow directors to truly act in a trustee role. Through the use of personal contact, membership meetings, newsletters, membership surveys and so on the Board has the responsibility to gain as much input from the membership as possible prior to making long-term policy decisions. Another concept that of trusteeship must also be fully understood by the modern credit union director. A trustee is a person who accepts the trust of the membership to act in their best interests. What constitutes the best interests of the membership can be and often is a matter of opinion and debate amongst the Board but each director must ensure that their

3 decision-making and behaviour, as a director, is referenced to a clear vision of what is the interests of the membership as a whole. Finally, it must be understood by the director that he or she represents all the membership as a whole before those of a small part or special interest group. The credit union is primarily a business organization and must operate in today s competitive and regulatory environment as a successful business. Its operations must reflect modern and rational management decision-making and the Board and its senior management must act at all times with a well-developed and realistic appreciation of the market forces in which we operate and play a major role in the North Coast s economy. The directorship is a key decision-making position in the credit union s management as it is the Board that determines long-term strategic direction, major business objectives and overall progress. The Board is also responsible for the selection and on-going performance monitoring of the Chief Executive Officer. 2. Director s Responsibilities The legal responsibilities of a Director are stated in broad terms in the provincial legislation governing the operation of the credit unions, which includes the Credit Union Incorporation Act (CUIA) and the Financial Institutions Act (FIA) as well as certain parts of the Company Act. The first two of these pieces of legislation came into effect in September 1990 and were intended to provide credit unions with increased freedom to act in light of greater competition from banks, trust companies and other financial institutions. At the same time these new Acts require directors to take fuller responsibility for their actions as prudent business people. The legislation makes clear the government s intention to see credit unions operate as safe and prudent financial institutions and provides a regulatory regime that ensures a credit union s board and management operate with safe guidelines. Directors act as part of a board and rarely if ever have power to act individually. Thus a director is part of a team and must be prepared to cooperate with other directors to ensure the board s work is carried out successfully and in a timely manner. The director will be called upon to serve on board committees, to attend all board meetings if possible and to represent the board and the credit union s membership at regional and provincial meetings or at community functions. Given the financial and complex nature of the financial services business, each director will be provided with a considerable amount of printed material related directly to the affairs of the credit union or to topics of interest to credit union directors. Keeping up to date is a major

4 responsibility of each director so that their understanding of complex financial and business affairs is current and that board debates and discussion can proceed at a high level of general background knowledge and understanding. Each director is required to act in a fiduciary capacity. This means that their decisions must be as individuals who have a legal responsibility to act in the best interests of the people they represent the members. Thus a director may hold a personal opinion or point of view that, as a fiduciary, they must put aside in order to legally and morally fulfill their responsibilities. Directors must act in accordance with public law. Thus their ability to make decisions is a constrained one. Public law takes precedence over credit union policy and before personal opinion or belief. All Board decisions must comply with the law; the activities and decisions of the Board are regularly reviewed and audited by officials of the Financial Institutions Commission (FICOM). If a Board is judged by the Superintendent of Financial Institutions to be acting in a manner not in the best interests of the membership or the credit union, that official can replace the Board with an Administrator who will assume the Board s responsibilities. 3. Directors Duties 1. Directors must attend all Board and Committee meetings. 2. Directors must complete a mandatory Directors training program conducted by CUSOURCE. The required minimum training is the first level of modules of the Credit Union Directors Achievement program (CUDA), which must be completed within the one year of becoming a director. There are three levels in all in the CUDA program. 3. Directors must reveal any material interest or conflict of interest in any subject being discussed by the Board and must absent themselves from voting, and not participate in any manner of deliberations of the Board on matters with which they are in conflict. 4. Directors who are opposed to a resolution of the Board for substantive or material reasons must declare their opposition and such declaration must be recorded in the Minutes of the meeting. All negative votes are to be recorded in the Minutes of the meeting.

5 5. All information that directors obtain as a result of their position is to remain fully confidential unless it has become public knowledge. No director may use information obtained as a result of his or her position of trust as a director for personal gain or for personal gain of any associate or family member. 4. Frequently Asked Questions 1. Who may run as a director? Any adult member in good standing for the period starting 90 days before the date of election may run for the Board. Only individual members may be directors (not a corporation). 2. How does the election process work? In 1992, Northern Savings Credit Union s election procedures changed. Elections are now held in one or more of the four electoral districts (Haida Gwaii, South, Haida Gwaii North, Terrace and District and Prince Rupert and Area District). Balloting is carried out at the branch offices on three successive days. In Prince Rupert members may also vote at the time of the Annual General Meeting where balloting will occur for a period of one hour prior to the meeting being called to order. Results of the election must be announced within seven (7) days after the Annual General Meeting. 3. How and when do the Board s officers get appointed? At the first regular Board meeting held after the election results are announced, the Board s officers are elected. The officers are: Chairperson, 1 st and 2 nd Vice- Chairperson, and an Executive Committee member. Also elected are the members of the Conduct Review Committee and the Audit Committee. Other committee appointments are made at this meeting or soon after. 4. How many directors are there and how long do they hold office? Northern Savings presently has eleven (10) director seats one each from the two Haida Gwaii Districts, three from the Terrace District and five from the Prince Rupert and Area District. Directors are elected for a three-year term of office.

6 5. What happens if a director cannot finish their term? A director cannot serve unless they are active member in good standing. If a director resigned or is removed from office the Board may appoint a replacement who will serve until the next regularly scheduled election, at which time a new election will be held for the un-served portion of the term of office. 6. How many meetings are there in a year? There are regular board meetings held each month except for July and August for a total of ten meetings. In addition, there are one or two special all day meetings held for Strategic Planning purposes. Committees meet as required. The Credit Committee is called on a more frequent basis (once or twice a month) and the other committee s meet two or three times a year. NSCU is a member of the Northline Region of Central 1. There are two regional meetings held each year in April and October (Spring meeting in Prince George and the Fall meeting in rotating Credit Union locations). Directors may also attend one yearly provincial meeting of Central 1 (Vancouver) held in November. 7. Who makes up the credit union system? There are individual credit unions in BC. Each of these is a fully autonomous financial institution with a Board of Directors and a manager and staff. All of these credit unions belong to Central 1 located in Vancouver. Central 1 acts as a liquidity manager for the entire BC system, clears our cheques through the Canadian Payment Association, provides a number of technical and financial services and acts as a trade association, representing the credit union system to government, to other financial institutions, and to the rest of the Canadian and the International credit union system. In truth BC s credit unions are not actually a financial system in the true sense of that term. Rather, they act as a loose association of similar institutions who cooperate on most matters but who also retain the right to compete with one another. Currently there is a strong effort afoot to bring BC s credit unions closer together into a more unified financial services network and system in order that we may successfully compete with the national chartered bank system and trust companies.

7 8. Do directors get paid? Yes, in 2005 NSCU directors adopted a remuneration policy. All out-of-pocket expenses are fully paid by the credit union to directors including approved spousal travel and childcare expenses. 9. How are Board decisions made and recorded? The proceedings of all board and board committee meetings are recorded and a Minute Book kept in our registered office in Prince Rupert. Only the board at a properly constituted board meeting can make binding decisions. These decisions are made in the form of Resolutions, which must be voted on and passed by a simple majority of the board. The Board s Resolutions must comply with public law and the Rules of the credit union. 10. Can a director be forced to resign? Yes, under certain circumstances. If a director ceases to be a member in good standing then they must resign or be removed by Resolution of the Board. Also, if a director loses their ability to be bonded under the credit union s liability insurance (due to a criminal conviction or an undischarged petition of bankruptcy for example) then they will be forced to resign or will be subject to removal. The membership may remove a director by Special Resolution and appoint a replacement by Ordinary Resolution. This action can be carried out despite a director retaining his or her legal eligibility to serve. A director can also resign due to a disagreement with the Board s actions on a matter. The director, in this situation, has a duty to write to the Superintendent disclosing their reasons for resigning. The superintendent may require the credit union to publish this letter and distribute it to the membership. 11. What are the main jobs of the Board? The most important job is probably the selection and ongoing evaluation of the credit union s Chief Executive Officer. That individual has tremendous influence over the affairs of the credit union and only through developing and maintaining a proper relationship with their CEO does a Board have a good opportunity to control the credit union. The Board s formal authority is best managed through an active policy making process. If the Board concentrates on policy-making and regularly evaluates the

8 results of those policies and make adjustments as needed then they have the opportunity to wield a great deal of influence over day-to-day events as well as the longer-term. Finally, the Board s main job is to ask questions of the credit union s management and ensure: (1) they understand the answers, and (2) are satisfied with them. Although banking is a complex and technically complicated business, it is not all that difficult to understand and a Board that keeps up to date and asks questions so that they truly understand what is happening has plenty of ability to make good decisions and properly direct the affairs of the credit union. 12. Who can the Board rely on other than Management to get information about the credit union s operations or financial position? A number of external inspectors and auditors visit the credit union each year. The Financial Institutions Commission (FICOM) sends an inspection team of four or five auditors every 2 years. They spend at least a week going through records, asking questions and generally assuring that the credit union is following the law and also following safe and prudent standards in its operations. The credit union employs an outside audit firm who conducts independent audits. The External Auditor examines the practices of the credit union management and staff and carries out a number of audit tests to ensure the financial statements of the credit union are accurate, plus raise any other matters that they believe may materially affect the financial position of the credit union. An Internal Auditor, who is employed full-time by the Credit Union, examines the management process of the credit union and ensures that proper risk management and procedural checks and balances are in place and that there is a proper balance between safety and effectiveness and efficiency. These groups provide written response to the Board (as well as to management) and the Board s Audit Committee has the responsibility of reviewing these reports and looking into any problem areas that may exist. The Audit Committee also meets with the external and internal auditor. From these external audits and inspections the Board should be able to form an opinion

9 as to whether their credit union is being managed in a safe and prudent manner and whether the depositors and creditors of the credit union are being well served. Thank you for your interest in Credit Union Directorship on the Board of Northern Savings Credit Union. Directorship Qualifications As to the Rules of Northern Savings Credit Union To qualify to be appointed or nominated as a candidate for election as a director, a member must: a. be of the age of majority; b. be a member in good standing of the Credit Union and have been a member in good standing for at least ninety (90) days before appointment to the position or commencement of the branch voting period; c. not be disqualified from holding the office of director by the provisions of the Company Act, the Incorporation Act, The Financial Institutions Act or any regulations made under any of those Acts; d. at the time of their nomination, have a registered address which is within the district for which they are nominated as a candidate to be elected as director; e. either have been nominated by the nominating committee pursuant to sub-rule 4:19 or have had their name submitted to a nominating committee pursuant to sub-rule 4:16 by at least three (3) members who were qualified to do so; f. not be an employee or the spouse or common-law spouse of an employee of the credit union or its subsidiaries; g. not be an employee or officer of any competing financial institution.

10 Declaration of Candidate is required as follows: Before the name of a person is placed in nomination as a candidate for election as a director, that person shall deliver to the nominating committee a declaration, in writing, stating that the member is willing: a. to stand for election and if elected or appointed, to serve as a director; b. to observe the provisions of the Act, the Financial Institutions Act and the Company Act, as applicable; c. to comply with the directors conflict of interest guidelines adopted by the directors, from time to time; and to observe the Rules of the Credit Union and procedures related to such election and the conduct thereof

11 Nominations Committee Northern Savings Credit Union rd Avenue West Prince Rupert, BC V8J 1K8 Nominee s Acceptance and Declaration In accordance with the rules of Northern Savings Credit Union, I hereby acknowledge and confirm that: 1. I am eligible under the rules of the credit union for election to the office of director of Northern Savings Credit Union. 2. If elected, I will comply with the rules of Northern Savings Credit Union which require the following: a. I will serve as a director for the position to which I have been accepted b. I will observe the provisions of the Credit Union Incorporation Act, the Financial Institutions Act and the Company Act, as applicable. c. I will comply with the Directors Conflict of Interest guidelines. d. I will observe the rules of the credit union and procedures related to the election and the conduct thereof. I accept the nomination for election as a director of Northern Savings Credit Union. Name of Candidate Signature Date Name of Witness Signature Date

12 Nominations Committee rd Avenue West Prince Rupert, BC V8J 1K8 Director Nomination Form NOMINEE: (Please print) Name Address Home Phone Number Cell Phone Number Membership Number I hereby agree to have my name stand as a candidate for Director of Northern Savings Credit Union. Nominee Signature NOMINATOR: three required (Please print) Name (1) Name (2) Name (3) Membership Number Membership Number Membership Number Signature Signature Signature Date Date Date Candidates for director must be nominated by three members of the credit union in good standing, of the age of majority, and from the region for which the candidate is being nominated.

13 Candidate Statement Name Account Number Branch Address City Postal Code Home Phone Number Cell Phone Number Address Occupation Employer Please submit either in hard copy or electronic format candidate statement including biographical information, occupation, credit union affiliation, experience and qualifications, and how you will contribute to the advancement and governance of the Credit Union (max 250 words). The candidate statement should be written with the intent of publication with the candidate profile posting. Candidate photographs will be required once acceptance of application is received. Please contact our office at or for details.