Credit Union and Co-operation with Overseas Regulators Act 2012

19.

Board committees.

19.— The Principal Act is amended by inserting the following after section 56:

“56A.— (1) Subject to the other provisions of the Credit Union Acts 1997 to 2012 and any matter prescribed by the Bank, the board of directors of a credit union may cause any matter relating to its functions to be performed or carried out on its behalf by a committee, comprised entirely of directors or of a majority of directors, to act on behalf of the board of directors in respect of matters to be performed or carried out.

(2) A decision of the board of directors to cause any matter relating to its functions to be performed or carried out on its behalf under subsection (1) shall be taken at a meeting of the board.

(3) The Bank may prescribe that credit unions generally or any category or categories of credit union establish one or more of the following committees, all members of which shall be directors of the credit union:

( a) an audit committee;

( b) a risk committee;

( c) a remuneration committee.

(4) Where a credit union is not required to establish a committee to which subsection (3) relates, the credit union—

( a) if such a committee is already in place when this section is first commenced, shall as soon as practicable thereafter decide whether or not the committee shall continue, or

( b) at any time after such commencement, it may decide voluntarily to establish such a committee if it considers it appropriate and proportionate to do so,

and the provisions of this section shall apply to the credit union, in respect of the committee so continued or established as if that committee were required to be established under subsection (3).

(5) A decision by the board of directors under subsection (1) shall be documented in writing by the board, which documentation shall include—

( a) the terms of reference for the committee including—

(i) identifying the subject matter of the area concerned and respective responsibilities of both the board of directors and the committee,

(ii) indentifying the matters that may be decided by the committee and those that require the approval of the board,

(iii) a schedule of matters reserved for the board of directors that would otherwise be performed or carried out by the committee,

and

( b) the procedures for monitoring and documenting in writing the exercise of the matters to be carried out on behalf of the board.

(6) The board of directors shall appoint the members of each committee to which subsection (1) relates.

(7) A person appointed to a committee—

( a) shall hold office until the next general meeting at which an election is held for the board of directors, or such shorter period as may be specified at the time the person is appointed to the committee, and

( b) may be removed from the committee by a decision of the board of directors.

(8) When appointing members of a committee to which subsection (1) relates, the board of directors of a credit union shall ensure that—

( a) each committee has an appropriate balance and sufficiency of skills and expertise available to it to carry out the matters delegated to it, and

( b) where necessary, some or all of the members of the committee are prepared to undertake relevant training to enhance their skills and experience for the purpose of carrying out functions in the context of paragraph ( a).

(9) For the purposes of a committee to which subsection (1) relates, the board of directors or, failing them, the committee concerned in consultation with the secretary of the credit union, shall appoint a secretary to the committee. The secretary to a committee shall perform the same functions to the committee as does the secretary to the credit union perform under subsections (3), (5), (7) and (8) of section 54.

(10) The members of a committee to which subsection (1) relates shall perform their functions as such members in a manner consistent with the exercise of functions by members of the board of the credit union, both collectively and individually, as if the committee were the board and accordingly, the provisions of section 54, other than subsection (1), that relate to the board shall, subject to any necessary modifications, apply to the committee.

(11) A committee to which subsection (1) relates shall be chaired in such manner as its terms of reference provide or, where not so provided, as the committee shall decide.

(12) The board of directors of a credit union—

( a) may establish such other committees as the directors consider appropriate, and

( b) shall have such other committees (if any) as may be prescribed by the Bank.

(13) In composing the membership of any committee under this section, the board of directors of a credit union shall endeavour to ensure that no one individual director is in a position to exercise excessive influence or control, in respect of the business affairs of the credit union, through membership of committees.

(14) Each committee shall, at least quarterly in every year, prepare and submit in writing to the board of directors a formal report on its activities and deliberations.”.