Credit Union and Co-operation with Overseas Regulators Act 2012

27.

Board oversight committee.

27.— (1) The Principal Act is amended by inserting the following Part after Part IV:

“PART IVA

Board Oversight Committee

Board oversight committee.

76L.— Every credit union shall have a committee (in this Act referred to as a ‘board oversight committee’) which shall—

( a) consist of 3 or 5 members elected in accordance with section 76N, and

( b) exercise the functions assigned to it by this Part.

Functions of board oversight committee.

76M.— A board oversight committee of a credit union shall assess whether the board of directors has operated in accordance with—

( a) Part IV, this Part and any regulations made for the purposes of Part IV or this Part, and

( b) any other matter prescribed by the Bank in respect of which they are to have regard to in relation to the board of directors.

Election of board oversight committee, etc.

76N.— (1) The board oversight committee of a credit union shall be elected—

( a) where the organisation meeting occurs after the commencement of this provision, by secret ballot at the organisation meeting and, subject to section 76R(4), subsequent vacancies on the board oversight committee shall be filled by secret ballot at an annual general meeting,

( b) in any other case, by secret ballot at the annual general meeting first occurring after the commencement of this provision or, if earlier than that annual general meeting, at a special general meeting called for the purpose of such ballot and, subject to section 76R(4), subsequent vacancies on the board oversight committee shall be filled by secret ballot at an annual general meeting.

(2) If a casual vacancy arises in the membership of a board oversight committee, then—

( a) within one month of the vacancy arising, the Committee shall appoint a person (who may, if the Committee thinks fit, be a former member of the Committee) other than a person to whom subsection (4), (5) or (6) relates to fill the vacancy, and

( b) the person so appointed shall hold office until the next general meeting at which an election is held for members of the board oversight committee.

(3) Where the secretary of the board oversight committee becomes aware that all the members of the committee intend to resign on the same date, the secretary shall give written notice of their intention to the Bank and the board of directors of the credit union.

(4) A credit union shall not elect under subsection (1) any of the following persons to be a member of its board oversight committee:

( a) an employee or voluntary assistant of the credit union or an employee of any other credit union;

( b) a member of the board oversight committee of any other credit union;

( c) an employee of a representative body of which the credit union is a member, where that employee’s role could expose them to a potential conflict of interest;

( d) a public servant (within the meaning of the Financial Emergency Measures in the Public Interest Act 2009) assigned to the Department of Finance and involved in advising the Minister on credit union issues or in the examination of credit union issues;

( e) a member of the Commission of the Bank;

( f) an officer (within the meaning of section 2 of the Central Bank Act 1942) or other employee of the Bank and involved in the regulation of credit unions;

( g) Financial Services Ombudsman (within the meaning of section 2 of the Central Bank Act 1942) or a Bureau staff member (within the meaning of section 57BA of that Act);

( h) a member of the Irish Financial Services Appeals Tribunal or a member of its staff (including the Registrar);

( i) the chief executive of the National Consumer Agency, an authorised officer of that Agency (within the meaning of section 2 of the Consumer Protection Act 2007) or any other member of its staff;

( j) the auditor of the credit union or a person employed or engaged by that auditor;

( k) a solicitor or other professional adviser who has been engaged by or on behalf of the credit union within the previous 3 years;

( l) a person who is a spouse or civil partner, cohabitant, parent or child, of a director, board oversight committee member or employee of that credit union;

( m) a body corporate;

( n) a person who is not of full age;

( o) a director of the credit union.

(5) A person shall resign from being a member of the board oversight committee of a credit union if and when he or she becomes a person to whom any of the provisions of subsection (4) relates.

(6) A board oversight committee member may not be appointed or reappointed to the board oversight committee if he or she has served for more than 12 years in the previous 15 years whether on the board of directors or the board oversight committee.

(7) The board oversight committee shall appoint one of their number as secretary of the committee.

Board oversight committee: procedural provisions.

76O.— (1) The board oversight committee of a credit union shall hold—

( a) at least one meeting in every month, and

( b) meetings with the board of directors at least 4 times in every year to facilitate it in carrying out the assessment under subsection (2),

and the board oversight committee shall keep minutes of every meeting held by it under paragraphs ( a) and ( b).

(2) The board oversight committee shall submit, within 2 weeks of any meeting referred to in subsection (1)( a), a written report to the board of directors on their assessment of whether the board of directors has operated in accordance with Part IV and this Part and any regulations relating to Part IV or this Part.

(3) The board oversight committee shall have access, at all times, to the books and documents (including draft documents) of the credit union to enable it to carry out its functions under the Act.

(4) Members of the board oversight committee shall have the right to attend all meetings of the board of directors and all meetings of committees of the credit union.

(5) The board oversight committee shall ensure at least one of its members attends every meeting of the board of directors.

(6) The board oversight committee may notify the Bank of any concern it has, that the board of directors has not complied with any of the requirements set out in this Part or Part IV, or regulations made thereunder, following a unanimous vote at a meeting of the committee called for the purpose of considering such a notification.

(7) The board oversight committee shall report to the members at the annual general meeting and, if it thinks fit, at a special general meeting, on whether the board of directors has operated in accordance with Part IV and this Part.

Board oversight committee: term of office and retirement.

76P.— (1) The term of office of a member of the board oversight committee—

( a) shall begin at the conclusion of the general meeting at which the member is elected,

( b) shall not extend beyond the third subsequent annual general meeting after being so elected, and

( c) subject to the provisions of this Act and all other applicable legal requirements, shall be determined in accordance with the registered rules,

but, except where this Act or any other applicable legal requirement or the registered rules otherwise provides, a retiring member of the committee shall be eligible for re-election.

(2) The rules for retirement from the board oversight committee shall be as follows:

( a) where the committee consists of 3 members, one shall retire at each annual general meeting;

( b) where the committee consists of 5 members, 2 shall retire at each annual general meeting;

( c) subject to paragraph ( d), the members to retire at any time shall be those who have served longest since they were last elected;

( d) as between members who were last elected on the same day, the member (or members) to retire shall be determined by agreement or, in default of agreement, by the drawing of lots.

Board oversight committee: removal from office.

76Q.— (1) Subject to subsection (2), a credit union may, by resolution of a majority of the members present and voting at a special general meeting called for that purpose, remove a member of the board oversight committee from office.

(2) The secretary of the credit union shall, not less than 21 days before the date of the special general meeting at which it is proposed to move a resolution referred to in subsection (1), give written notice of that meeting to the member concerned.

(3) Where notice is given of a resolution mentioned in subsection (1) and the member of the board oversight committee concerned makes in relation to it representations in writing to the credit union (not exceeding a reasonable length) and requests their notification to the members of the credit union, the credit union shall, subject to subsection (5), (unless the representations are received by it too late to do so)—

( a) in any notice of the proposed resolution given to members of the credit union, state the fact of the representations having been made, and

( b) send a copy of the representations to every member of the credit union to whom notice of the meeting is sent.

(4) Subject to subsection (5), and whether or not copies of any representations made under subsection (3) have been sent in accordance with that subsection, the member of the board oversight committee concerned may require that, without prejudice to that member’s right to be heard orally, the representations made by that member shall be read out at the special general meeting.

(5) Subsections (3) and (4) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the Bank is satisfied that compliance with the subsections would diminish substantially public confidence in the credit union or that the rights conferred by those subsections are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.

(6) A vacancy arising from the removal of a member of a board oversight committee under this section shall be filled in accordance with section 76N(2).

Board oversight committee: supplementary provision.

76R.— (1) A register of the members of the board oversight committee shall be kept by the secretary of the credit union and shall be signed by each member of the board oversight committee after an annual general meeting or, in the case of a member appointed to fill a casual vacancy, after such member’s appointment.

(2) In the event that the number of members of the board oversight committee falls to less than half the number specified in the registered rules, the secretary of the committee shall forthwith notify the Bank and the board of directors.

(3) The acts of a member of the board oversight committee of a credit union shall be valid notwithstanding any defect in the election or appointment of the member which may subsequently be discovered.

(4) Where any of the following events occur—

( a) the secretary of the board oversight committee has given notice under section 76N(3) that all the members of the committee intend to resign on the same date,

( b) all the members of the board oversight committee have been removed or suspended in accordance with section 96(1), or

( c) there are no members of the board oversight committee,

then the board of directors shall convene a special general meeting of the credit union, within one month of the occurrence of the event in question, to elect a board oversight committee.

(5) If the special general meeting referred to in subsection (4) is not convened in accordance with that subsection, the Bank may convene such a special general meeting under section 92(1)( b).

(6) A credit union shall meet all such expenses as may be reasonably incurred by its board oversight committee in carrying out its function.”.

(2) Notwithstanding the repeal by this Act of the provisions of the Principal Act relating to Supervisory Committees, each member of the Supervisory Committee of a credit union shall, unless he or she resigns or otherwise ceases to be a member of that committee, be deemed to have been duly elected a member of the board oversight committee of the credit union for the remainder of the term that he or she would have been a member of the Supervisory Committee had this section not been enacted.