Special Resolutions 2023

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.