Transcript NSF slides 4 November 2012

National Supervisors Forum
Annual Conference
Role of Supervisors
with regard to the Board
4th November 2012
Motherway Consulting Ltd.
“Talamh Úr”, Smithstown, Mullinavat, Co. Kilkenny
Tel: 353 51 427945 Email: [email protected] Mobile: 353 87 2361642
Role of the Supervisors
• Part IVA of the CU Bill requires board oversight
committee with 3 or 5 members; elected in the
normal manner but with new exclusions
• May notify the Bank of any concern that the
board has not complied with governance
requirements
• Shall report to members at the AGM and if it
thinks fit, at an SGM, on whether the board has
operated in accordance with the Credit Union
Acts 1997 to 2012
©MCL 2012
Role of the Supervisors
• Main functions are familiar:
– Meet on a monthly basis
– Meet the board 4 times a year
– “submit, within 2 weeks of any (such) meeting a
written report to the board of directors on their
assessment of whether the board ... has operated
in accordance with this Part and any regulations
relating to this Part”
– “..ensure at least one of its members attends
every meeting of the board of directors”
©MCL 2012
New Elements
• Enforced “rest periods” after 9 years service
(from the previous 15)
• Shall have “knowledge, skills, experience,
expertise, personal qualities, competencies,
capabilities, professionalism and probity to
carry out their duties and obligations”
• Must either have financial services expertise,
qualifications, background, or be prepared to
train up
©MCL 2012
In Summary
• Be present
• Be the watchers – understand what’s going on
– what should be going on...
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Give the board a wake-up call when needed
Act to remove a director when necessary
Keep minutes and records
Report to members
©MCL 2012
Division of Labour (Revisited)
Supervisors
• Oversight
• Watches how
decisions are
made
• How the board
exercises:
– Direction
– Control
– Management
Board
• Exercises
primary
control
• Sets targets
for manager
• Makes
decisions:
– Long-run
decisions
– Idea
decisions
Manager
• Exercises
operations
control
• Meets targets set
by board
• Makes decisions:
– Short-run
operating
decisions
– Action
decisions
Supervisors
• Are the members’ eyes and ears
• Represent a key quality control
• Remain focused on what the directors do and
how they do it
• Have the power to solve problems
– including the ones that members may otherwise
remain blissfully unaware of
©MCL 2012
Supervisors Need To
• Know and understand the legislative,
regulatory and ethical parameters within
which the board should operate
• Have moral courage, fortitude, resilience and
confidence
• Understand what makes a good director
• Be ready, willing and able to give (negative)
feedback to the board
©MCL 2012
What Makes A Good Director?
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Places members’ interests first
Ensures the credit union serves its members
Thinks independently & expresses own view
Acts collegially – accepts majority decisions
Exercises good business judgement
Enhances the credit union’s image
Stays current
Shows leadership
Practical Applications Of This /1
• Places members’ interests first / ensures
members served
– Implies board knows what those interests are
– Implies being representative of members, or at
least informed about their needs and wants
– Able to leave one’s ego & own interests (including
business interests) outside the boardroom door
– Avoiding conflicts of interest but dealing correctly
with any that arise
Practical Applications Of This /2
• Thinks independently
– Listens fairly and respectfully to everyone, not just
whoever speaks loudest, longest, or most
forcefully
– No room for factions, cliques or personal affinities
– No room for side meetings before, during or after
the actual board meetings
– No room for director(s) hearing something for the
first time at a meeting when clearly others have
heard it already
Practical Applications Of This /3
• Acts collegially - what one does, all do, so…
– Board must run its own affairs well; self-regulate,
enhance quality from within
– Make decisions efficiently and properly
– Chairperson tries to get a contribution from everyone
– Promote a culture whereby constructive criticism is
welcomed, but personal attacks are unacceptable
– Nobody permitted to go on a solo run or act ultra
vires
– Mistakes acknowledged, learned from and gotten over
Practical Applications Of This /4
• Exercises good business judgement and
enhances the Credit Union’s image
– Means directors must conduct their own business
and personal affairs carefully and well; fitness and
probity apply, but perception is 9/10ths of reality
– Safeguard confidentiality
– Promote the services and their benefits, including
by using them
Practical Applications Of This /5
• Stays current
– Means keeping in touch with what’s going on in
the common bond, in the community, in society knowing relevant issues and bringing that
knowledge and awareness to bear
– Keeping up with new legislative and regulatory
requirements
• Shows leadership
– Not just a job for the chairperson
Giving Feedback
©MCL 2012
Giving Useful Feedback
• Easier when based on shared values and a
shared understanding of goals and objectives
• Should be demonstrably based on facts, not
just opinion
• Needs to be user-friendly
– Tone is important, especially in writing
• Avoid the “praise and blame” sandwich
©MCL 2012
Keep It Constructive
• The purpose is to create an awareness that
will lead to improvement, so keep it
– Clear, direct and specific
– Based on facts & observations, not opinions or
emotions; non-judgmental
– Sincere, offered with care and respect
– Helpful in tone; showing your concern not your
frustrations
©MCL 2012
Tips On Timing
• Positive feedback = ASAP
• Negative feedback = ASAR
• Both types need to be given regularly
©MCL 2012
For Example
Try this:
• The oversight committee has observed....
• The impact of this is....
• It would be preferable...
©MCL 2012