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Special Resolutions 2023

Special Resolutions 2023
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How to Vote

 
Learn how you can vote as per our Credit Union Rules.

VOTING ELIGIBILITY
Personal Voting Member

You are qualified to vote if: you are a member in good standing, are 19 years of age or older, and own a minimum of five (5) Class “A” Membership Equity Shares.

Business/Organization Voting Member
A non-personal legal entity (i.e., a limited company, registered society, or other legal entity) may appoint an individual to vote on its behalf if the organization is: a member in good standing and owns a minimum of five (5) Class “A” Membership Equity Shares. The appointed individual must be 19 years of age or older.

VOTE ONLY ONCE FOR EACH SPECIAL RESOLUTION
If more than one vote is cast under an individual membership through any combination of electronic, mail, or in-branch methods, all that member’s votes are null and void. A person may vote more than once if they vote as a personal voting member and if they are authorized by a business/organization voting member to vote on its behalf.


Questions & Answers

As previously communicated, CCCU is holding an informational Special General Meeting on the special resolutions. The virtual meeting is open to all members, with meeting information presented below.

Special General Meeting (virtual)
Friday, January 6, 2023
10am-11am

To register, please call our Relationship Centre at 1.888.741.1010 or visit any Coastal Community location. Deadline to register for the meeting is Thursday, January 5, 2023 at 4pm.


 

Yes, the Board is in favour of tenure limits. CCCU’s Board has been conducting a comprehensive Rules review for some time and had planned to include tenure limits in this broad Rules review. In fact, the Board considers this issue so important they have already passed a policy on tenure limits, which is the same as the one proposed in the CCCU-proposed special resolution. The policy will be in place for the 2023 Directors Election.

Coinciding with CCCU’s broader Rules review, the Board received a member-proposed special resolution to put tenure limits in our Rules. As the Board is in favour of tenure limits, they decided to move faster on this specific item so a vote can be held before the 2023 Directors Election.

After doing a thorough assessment, including a legal review, of the member-proposed resolution, the Board realized it could create some unintended risks for our Credit Union. The directors also looked at governance best practices and what other similar credit unions have for tenure limits. The result of this review is the Board developed an alternative special resolution on tenure limits that they believe will help ensure stability in our operations.

The proposed CCCU special resolution specifies that if someone has served as a director for 12 or more consecutive years, they can run again after a minimum three-year break. As well, the CCCU special resolution contains a clause on what happens if both resolutions pass. In that case, the CCCU special resolution would be the one to take effect.

The member-proposed special resolution specifies that a director is only eligible to run if they have served less than nine of the preceding 12 years, whether those years were consecutive or not.

You can check out the comparison chart below for a more detailed look at the differences between the two resolutions.

 

The difference in term limits specified in each special resolution has important implications. The Board has to maintain an acceptable balance between necessary expertise and experience, and the opportunity for new perspectives and fresh ideas. The higher the number of directors ineligible to run in a Directors Election, the higher the likelihood the new Board may be missing some required skill sets to effectively guide the Credit Union.

If we take a look ahead, in four years the member-proposed special resolution would result in 80% of the existing Board members being ineligible to run once their current term expires. In four years, the CCCU-proposed special resolution would result in 40% of the existing Board members being ineligible to run once their current term expires.

While Board turnover has occurred in the past, a Rule on this topic that formally establishes this important principle is considered best practice. CCCU’s proposed resolution balances board renewal, diversity, and new ideas and perspectives with maintaining the continuity of expertise and experience that is important for managing risk and fulfilling the Board’s fiduciary responsibilities.

CCCU’s proposed resolution is based on industry best practice and allows for a reasonable turnover of directors, ensuring that the composition of the Board has all the necessary skill sets, experience, and leadership skills required to meet expectations of the Regulator.

The member-proposed special resolution:

  • may make it more difficult for the Credit Union to meet expectations of the Regulator in ensuring that the composition of the Board has all the required skill sets, experience and leadership skills;
  • introduces a greater likelihood that Coastal Community may be required to appoint external consultants as Advisory Directors if new directors cannot provide the necessary skills, which may result in increased costs to the Credit Union; and
  • does not make grammatical sense when embedded in CCCU’s Rules. This version uses language/words that are not defined and are inconsistent with the existing Rules, which could create ambiguity in future decision-making.

Members have the option of voting in FAVOUR of, or AGAINST, each of the special resolutions. If members choose to vote only on one special resolution, their vote will be valid on that one resolution and will not be disqualified. To be passed, a special resolution requires 2/3 or greater of those who vote to vote in favour of the resolution.

If both resolutions are passed, only the CCCU-proposed special resolution will go forward. If neither resolution is passed, the current Board policy on tenure limits will remain in effect, although the Rule will not be amended. The current Board policy mirrors the special resolution recommended by Coastal Community.

Each of the special resolutions is separate and distinct from the other. We are strongly encouraging our members to vote on both to fully express their thoughts on the impact of each one.


 

The voting period is from January 6, 2023 to February 7, 2023.


 

How CCCU's Proposed Resolution (#01-2023) and the Member-Proposed Resolution (#02-2023) Compare



Issue  CCCU-Proposed Special Resolution and Current Policy Member-Proposed Special Resolution 
Proposed tenure length 12 or more consecutive years immediately preceding the date of election or appointment. 9 years within the preceding 12 years in total (consecutively or non‑consecutively).
Effective Immediately, with no transition period, and past service is counted. Immediately, with no transition period, and past service is counted.
Potential Turnover of Current Board By the 2026 Directors Election (4 years), 40% of existing board members will be ineligible to run once their current terms expires. By the 2026 Directors Election (4 years), 80% of existing board members will be ineligible to run once their current term expires.
Tenure reset (or ability to run again after ineligibility) Directors would be eligible to run again after a minimum three-year break. Directors would be eligible to run if they have served less than 9 of the preceding 12 years.
Balance of Board renewal with continuity of Board experience and expertise. Acceptable balance of maintaining necessary board expertise and experience with board renewal. Greater likelihood that Coastal Community may be required to pay for external consultants as Advisory Directors, if new directors cannot provide the necessary skills.
Language Is consistent with the language of CCCU Rules. Provides no language inconsistency and makes grammatical sense when embedded into the current Rules. Language does not make grammatical sense when embedded in CCCU’s Rules. This version uses language/words that are not defined and are inconsistent with the existing Rules, which could create ambiguity in future decision-making.
Comparison with industry standards/ best practices Consistent with the majority of other credit unions that have tenure limits for directors. Is on the lower end of time as compared to the majority of other credit unions.
Impact on collective Board skillset and experience Some potential loss of skillset, experience and knowledge is anticipated, but reinforces the complexities of being a credit union director and the significant, ongoing requirement for directors to complete director training.
Better balance of Board renewal with Board continuity of experience and expertise.
Due to the level of turnover under this resolution, a greater loss of skillset,
experience and organizational knowledge from directors who have served on the Board for several years is anticipated.
Fails to recognize the complexities of being a credit union director and the requirement for credit union directors to complete significant, ongoing director training, which is essential for effective board governance.
CCCU could be required to retain external consultants as Advisory Directors to fill any skill gaps or lack of experience on the Board. This may result in increased costs to CCCU.
Ability to meet expectations of the Regulator (BCFSA) With less Board turnover expected, we anticipate greater continued ability to meet expectations of the Regulator in ensuring that the composition of the Board has all the necessary skill sets, experience, and leadership skills. Due to the level of turnover under this resolution, it may be more difficult to meet expectations of the Regulator in ensuring that the composition of the Board has all the necessary skill sets, experience, and leadership skills.

 

Special General Meeting - Special Resolutions

 
This was a virtual event held on January 6, 2023.
Please email communications@cccu.ca if you have any questions.

 
Find Special Resolution Information