Role
of the Nomination
Committee
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
AIM
• The aim of this session is to
outline the role and
responsibilities of the
Nomination Committee
under new legislation &
regulation.
Objectives
By the end of the session, participants will:
• Understand the role of the Nomination Committee
• Understand the election process within the credit
union
• Understand the Fitness & Probity Standards for
credit unions
• Be cognisant of conflicts of interest
• Understand the need for the Nomination
committee to carry out a skills analysis and
consider Succession Planning
Role of the Nomination Committee
The Nomination Committee:
• Members are elected at the organisation meeting
after the AGM
• The committee is composed of a minimum of 3
and a maximum of 5 members who must all be
directors
• Casual vacancy – board elect a director to fill the
vacancy until the next meeting (after the AGM)
where an election should be held to fill the
vacancy
Role of the Nomination Committee
The Nomination Committee shall be responsible for:
(As per Section 56 (B) of the Act)
• Identifying candidates to be nominated
• Accepting nominations of candidates
• Proposing candidates for election by a general
meeting – all candidates proposed through the
nominating committee
• Assisting the credit union in performing its
obligations in relation to pre-approval controlled
functions (PCF’s)
• Assisting the credit union in carrying out due
diligence in the application of standards of fitness
and probity
Role of the Nomination Committee
The Nomination Committee shall be responsible for:
• Informing candidates, in writing, of the time
commitment expected prior to proposal
• Ensuring appropriate succession plan in place for
the board
• Ensuring adequate induction training takes place
as soon as possible and no later than 6 months
following appointment
• Arranging additional training
• Maintain a register-Records of service and
formally review membership of those of more than
12 years in aggregate.
Role of the Nomination Committee
The Nomination Committee shall :
• Review the board of directors at least once a year
to identify deficiencies (Training Needs Analysis)
• Consider the balance of skills, experience and
knowledge on the current board of directors when
considering proposing candidates
• Not propose appointments or allow them to
proceed where conflicts of interest exist or could
arise in a way which could significantly affect the
ability of the board to operate
Fitness and Probity
Regime
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Fitness & Probity Requirements
• Central Bank’s aim to improve overall
governance standards at board and
management level by ensuring that:
individuals who exercise significant influence and
control are capable, competent and financially
sound

with appropriate skills, experience, knowledge and
integrity to manage and govern their institution
Fitness & Probity Requirements
• Credit union members have confidence
that those in senior positions can
demonstrate they are….






competent
capable
act honestly
ethically and
with integrity and are
financially sound
Fitness & Probity Requirements
• Part 3 of the Central Bank Reform Act 2010 was
applied to credit unions in Sept 2012

Tailored Fitness and Probity regime for credit unions

Introduced on a phased basis:–



1st August 2013 for CU’s with total assets >€10 million
1st August 2015 for all other CU’s
Apply existing Fitness and Probity regime to those who are
authorised as a retail intermediary – 1st August 2015 start
date
Fitness & Probity Requirements
• Proposed that the Fitness and Probity regime for
credit unions will prescribe:
2 Controlled Functions (CF’s)




Exercises significant influence on the conduct of affairs
(CUCF-1)
Related to ensuring, controlling or monitoring compliance
(CUCF-2)
Anticipated will include - board of directors, the supervisory
committee, the risk management officer, the compliance
officer, the MLRO, the internal audit function
2 Pre-approval Controlled Functions (PCF’s)


Chairman of the Board (CUPCF-1)
Manager (CUPCF-2)
Fitness & Probity Requirements
• What will Board Oversight Committee have to
do?
 Conduct appropriate due diligence to assess the fitness
and probity of those proposed

Ensure they meet the standards

Agree to abide by them

Not permit a person to perform a CF unless satisfied on
reasonable grounds

Get pre-approval from Central Bank for PCF (expectation
that nomination committee involved)
Fitness & Probity Requirements
• Three main standards for assessment:1.
Competence and Capability
2.
Honest, Ethical and Acting with Integrity and
3.
Financial Soundness
Fitness & Probity Requirements
• Competence and Capability:
Relevant experience and/or qualifications

MCC if applicable (i.e. ACCUP/Pathways & CU CPD)

Take into account

Size and activities of CU

Responsibilities of the position

Sound knowledge of business and responsibilities (including
regulatory & legal requirements)

Shown capacity in other positions to do the job

Existing responsibilities
Fitness & Probity Requirements
• Honest, Ethical, Acting with Integrity:
Be honest

Diligent

Independent-minded

Act ethically and with integrity and fairness

Operate without conflicts of interest

Assess if ability to perform the function is
adversely affected by any of the
circumstances set out in the standards
Fitness & Probity Requirements
• Financial Soundness:
Manage their affairs in a sound and prudent manner

Demonstrate that the role is not adversely affected
by the fact that they:





Have defaulted upon any payment due
Subject to a judgement debt
Subject of a bankruptcy petition
Adjudicated a bankrupt and it’s un-discharged
Director of an entity subject of insolvency
Above will not necessarily render an individual
ineligible – but needs to be assessed
Fitness & Probity Requirements
Due diligence


Is an internal process carried out by the credit union
(Nomination Committee)
It’s about the care and attention that is expected to be
put into showing that the key personnel meet the F&P
requirements

Not permit a person to perform a CF unless satisfied
on reasonable grounds that they meet the standards

Get pre-approval from Central Bank for PCF prior to
election to the role / appointment (expectation that
nomination committee involved)
Fitness & Probity Requirements
Due diligence

Conduct appropriate due diligence to assess the fitness and
probity of those proposed









Meet with the potential Director
Complete IQ form (or CU’s own form)
Copy of documentation/evidences
Checks carried out by CU (Referee’s, judgements etc)
Follow-up meeting (if required)
Ensure they meet the standards (competencies for role etc)
Receive letter of confirmation re time commitment and
concurrent responsibilities
Receive written confirmation that they agree to abide by the
standards on an ongoing basis prior to election and annually
thereafter and will advise of any material changes
Conflicts of Interest discussed & noted
Fitness & Probity Requirements
Who is responsible for conducting due diligence on the
following?
• Board of Directors – Nomination Committee (Nom Comm)
• BOC – BOC (use experience of Nom Com)
• Manager – Board of Directors or Nom Comm
• Nom Comm – Nom Comm or Board of Directors (1 off)
• Other CFs – matter for the CU
Due Diligence
Standard
Supporting documents obtained
CF / PCF
from a third party
Competent and Capable
Provision of a copy of the relevant transcripts
Y
Professional Body Check
Y
Employer’s References
Y
Minimum Competency Code 2011
I/A
Conflicts
SC
Honest, ethical and with
Garda Check/Convictions
SC
integrity
Regulator Check
Y
Financial Soundness
Judgements Search
Y
Y = Checks undertaken by CU
SC = Self Certify
I/A = If applicable
Fitness & Probity Requirements
Credit Unions with total
assets > €10 million
Aug 2013 – In-situ PCF’s
All Credit Unions
• 1st Aug 2015 – In-situ PCF’s
•
1st
•
1st
• 1st Aug 2015 – New PCF’s
apply for pre-approval
•
1st
• 1st Nov 2015 – All newly
appointed CF’s
Aug 2013 – New PCF’s
apply for pre-approval
Nov 2013 – All newly
appointed CF’s
• 1st Dec 2013 – List of PCF’s to
Central Bank and confirm due
diligence conducted
•
1st
Aug 2014 – Standards of
F&P apply to all CF roles in
the CU & have conducted due
diligence
• 1st Dec 2015 – List of PCF’s to
Central Bank and confirm due
diligence
• 1st Aug 2016 – Standards of
F&P apply to all CF roles in
the CU & have conducted due
diligence
The Election Process
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
The Election Process
How is the new process different to previous
years?
• Letting the members know they can no longer nominate
from the floor.




When will you do this?
How will you do this?
What will you do to ensure it is a positive
message
What structures can be put in place to ensure the
process runs smoothly?
Interviewing prospective directors
Why Interview volunteers?
•
•
•
•
•
•
To ‘get to know each other’ – a chat!
Gain factual information on volunteer
Match skills to tasks/role
Discover their expectations
Give information
Explore the match between the cu and the
volunteers needs – recruit or not?
• ‘Duty to care’ – professional recruitment &
selection
Interviewing prospective directors
• Before
 Advise them the purpose is to assess fitness and probity
 Have given them the job spec and responsibilities of a director
 Have outlined the time commitment
 Plan and prepare for the interview(s) – be clear on your outcome
• During
 Set the environment
 Open ended questions
 Two–way communication
 Look for specifics
• After
 Make decision
 Follow-up with the person
 Put forward for election, if appropriate
Conflicts of Interest
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Conflicts of Interest
Section 69
• Ensure individually and collectively they act in a manner
free from conflicts of interest
• Conflict of interest between the officers own interests and
the interests of the credit union e.g.


ensure acting for the benefit of the member, in the
interest of the credit union and not for personal gain or
favouritism
ensuring there is no clash between personal interests
and professional obligations
• Each officer shall take steps to ensure his/her role in the
credit union is not influenced by any other interest
Conflicts of Interest
Section 69 (continued)
• Policy to identify, manage and resolve conflicts of
interest
• Every officer identify potential conflicts
• Declare conflict of interest in writing and/or make
declaration at a meeting
• Within 3 working days of declaration enter into the
register of conflicts of interest
• Not take part in discussions and withdraw from the
meeting during which matter relating to conflict of
interest is considered
• If reoccurring conflicts - guidance re if appropriate to
resign
Skills Analysis
&
Identifying Training Needs
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Identifying Skills
S56(B) 7
• … consider the balance of skills, experience and
knowledge on the current board of directors
• Taking account of
 Number of vacancies to be filled
 Potential conflicts of interests
• Review composition of board at least once a year
to identify any deficiencies in composition
especially balance of skills
Identifying Skills Gaps
Skills/Competence Matrix
• A table that helps you review the skill, knowledge and
competency required to carry out a specific job
• Helps assess the training needs
• Assists in identifying the gaps within the current Board
• Builds commitment to the development of new skills
• Acts as a guide to the suitability of an individual to a
particular role
• Discussion tool for performance reviews – training can be
assessed, mapped-out, reviewed and evaluated
Identifying Training Needs
S56(B)(4)(i, j, k)
• ... adequate induction ... Sufficient appreciation of
and appropriate training about the strategy,
operations and performance of the credit union
• ... Induction training takes place as soon as possible
and no later than 6 months following appointment
• Arranging additional training for members of the
board ..... to the extent that the nomination
committee considers it necessary in order for
the BOD to make informed decisions
Identifying Training Needs
Training Needs Analysis (TNA)
• Purpose – what courses are needed and for
whom
• Ensure the person has the skills and knowledge
to do the job in a prudent, compliant, member
focussed manner
• There are benefits for the:


Members
Volunteers
Staff
• Nomination Committee works with the Training
Liaison Officer (TLO) (and others as appropriate)
Identifying Training Needs
Training Needs Analysis (TNA)
• Use competencies when conducting a TNA
 Competency is about having both the knowledge required and
being able to perform in that area
• Simple survey based on list of competencies associated
with the role
• A review of the learning and development needs to assess
the gaps in knowledge, skill, competence, behaviour,
attitude = fill the gaps through training and development to
meet the boards strategic objectives
• Certain roles organise their own TNA e.g. Board Oversight
Committee as part of their planning process
Identifying Training Needs
Training Needs Analysis (TNA)
• If the CU have a performance management system in place
where each office reviewed on an on-going basis TNA part
of same
• If not TNA is a stand-alone process
• Start by identifying core competencies to operate in a
compliant, ethical and efficient manner
• Then identify role specific competencies
• Contact each officer to explain TNA and arrange to meet
with them
 Determine training requirements
 Info confidential to board & management
Identifying Training Needs
Training Needs Analysis (TNA)
• Mandatory training
 AML
 DP
 H&S
 CPD
 Induction training
• Plan (budget, barriers, availability of officers etc) and
prepare
• Be clear on the purpose and area of focus
• Choose your method
• Carry out the TNA
• Collate the results
• Source appropriate training providers and courses
• Individualised training plan circulated to each officer
Succession Planning
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Succession Planning
• A process for identifying and developing internal
people with the potential to fill key positions in the
credit union in a structured manner
• Increases the availability of experienced and capable
volunteers and employees
• Nomination Committee – ensure succession plan in
place for the Board of Directors (also required for
Management Team = responsibility of BofD’s)
• Develop plan (6 steps)
• Put it in motion
• Monitor, evaluate and adjust plan
• Smooth transition of successor
Succession Planning
6 Steps
1. Determine the type of plan
2. Put a succession-planning team together
3. Identify the main factors that will influence your
plan
4. Link your succession plan to the credit union’s
overall strategy
5. Identify sources for successor candidates
6. Shape action plans
Where and how to recruit volunteers
Recruiting volunteers
• What are you doing to recruit volunteers?


do you use the local volunteering centre?
member survey, volunteer information booklet,
information on website etc?
• What else can you do?
• Where do you advertise?
• What information do you include?
Volunteer Cycle in a Credit Union
Interesting questions ….
• What is your experience of the volunteer
cycle in your credit union? E.g. how long
do people stay?
• What do you think the future volunteer
cycle will be in your credit union?
Structures to
support volunteers
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Structures to support volunteers
Structures to support Volunteers:• Send out the right message
• Create the right environment Long term
approach
• Volunteer policy
• Volunteer charter
• Appoint mentors
• Motivating volunteers
• Thanking volunteers
Supports available
to Nominating Committee
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Supports Available
Central Bank Guidance
• Guidance on F&P for Credit Unions
• Sample IQ Form
HR Guidance
• Succession Plan Guidance
• CF & PCF Role Descriptors
• Guidance on Contracts of Employment
Learning & Development Guidance
• Guidance on Developing a Training and Standards Policy
• Management of Training in the Credit Union
• Volunteer Recruitment Strategy
• Fitness & Probity Checklist
• Your Next Steps
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Central Bank Website
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
©©Irish
Irish League
Leagueof
of Credit
CreditUnions
Unions2013
2013
Closing
• Any Questions?