Reinforcing a culture

of good governance

– Tips for Success

MICHELLE O’DONOGHUE

SENIOR MANAGER - RBK CREDIT UNION DIVISION

9th May 2018

Agenda

Governance?Governance

Lifecycle

Improve Governance

Our Ten Tips

Conclusion & Questions

What is governance?

Governance refers to the structures and

processes that are designed to ensure

accountability, transparency,

responsiveness and compliance with laws

and regulations

Governance Lifecycle

Members expectations

Board Policy

CEO Interpretations

CEO and Staff

Actions

Results

Monitoring Reports

Board

Improving Governance

> Roles and responsibilities need to be clear

> Set the “tone at the top”

> Board lead by example

> Implement a governance roadmap – see our Top 10 Tips

Tip # 1 Executive v Non Executive Roles

> Ensure the roles are separated

> Boards are still too operational

> Requires a strong CEO and management team to oversee the strategic

plan implementation

> Board should be comfortable with level and detail of the management

information in the Board packs

> Have a documented organisational structure which outlines reporting

lines and segregation of responsibilities

Tip # 2 The requirements of Section 55

> Need to be familiar with the volume of this section

> Many credit unions don’t fully comply with all the requirements

> Weaknesses noted include:

Not completing an appraisal of the CEO

Staff appraisals not completed

Mandatory policies not reviewed every 12 months

Lack of or inappropriate succession plan

Ensuring that the effectiveness of the IA, Risk and Compliance Functions

are evaluated annually

Tip # 3 Committee Structure

> Have an appropriate number of committees for the size of the Credit

Union

> Have appropriate terms of reference and meet regularly

> All directors should contribute to the committees

> Have sufficient expertise to make decisions and recommendations to the

Board as a whole

> Committees if operating effectively should reduce workload of Board as a

whole

Tip #4 Board Oversight Committee

The BOC should assess that the Board is fulfilling its obligations:

> Attend and observe Board meetings

> Quarterly reports to the Board

> Often lacking in detail and real assessment

> Should ensure that Board is kept informed if not meeting their obligations

> Need a checklist

Tip #5 Board Meetings

> Detailed agenda and Board pack for the Board meeting

> Ensure necessary committees report as required, e.g. risk monthly,

nominations quarterly, etc

> Information on time to allow the Board to read before the meeting

> Keep the meeting moving - Allow specified timeframes for considering

agenda items, e.g. risk report 6.30pm – 7pm

> Ensure strategy features monthly

Tip #6 Board Minutes

> Detailed enough to record extent of discussions held

> Consider a user friendly format, e.g. columnar format with discussion item

to the left, actions and owners to the right

> Secretary should be allowed to participate in discussions so consider this

in the context of maintaining minutes

> Some credit unions are recording the meetings and writing minutes

afterwards

Tip # 7 CEO Appraisal

> CEO is the executive leader

> Should be set with clear goals, targets and KPI’s

> Formal annual appraisal - the CEO should be assessed in terms of goals set

> Do this in a timely manner – set an agreed hard stop for when this should be

completed

> Also informal quarterly meetings with executive committee

> Consider getting an outside facilitator experienced in HR if the Board is

lacking in HR skills

Tip # 8 Nominations Committee

This committee has a number of responsibilities:

> Induction programme for new directors

> Ongoing training for the Board to allow informed decisions

> Skills assessment of the overall board

> F&P requirements

> Succession plan

> New candidates

Tip # 9 Strategic Plan

> Strategic plan targets should be monitored regularly

> Update on financial results v target through the CEOs report

> The achievement of the overall objectives are often ignored

> Reformat the monthly board pack to align with strategic objectives

> Boards need to take a day out annually to monitor and discuss the plan

and its implementation

> Consider having a strategic planning committee which reports to the

Board

Tip # 10 Skills and Training

> Board need a key number of skills to be effective

> Chairperson – consider what mentoring is needed to be effective

> Induction programme

> Training – internal v external v online

1• Executive v Non Executive Roles

2• The Requirements of Section 55

3• Committee Structure

4• Board Oversight Committee

5• Board Meetings

6• Board Minutes

7• CEO Appraisal

8• Nominations Committee

9• Strategic Plan

10• Skills and Training

Top 10 Tips

Conclusion

> Good governance starts at the top – Board need to take ownership

> Reputation is easily damaged - If you have to explain, you are already on the

back foot

> Identify your own Credit Union’s governance shortcomings

> Set a roadmap with timelines to remedy the gaps

> Regulatory functions – IA, Risk, Compliance, External Auditors should call it

early if there are gaps

> Don’t give the Central Bank easy wins!

Questions

@RBK

@RBKCA

@RBK

www.rbk.ie

Thank you

Michelle O’Donoghue

Senior Manager

T: +353 9064 80600

E: modonoghue@rbk.ie

Disclaimer

While every effort has been made to ensure the accuracy ofinformation within this publication is correct at the time of going toprint, RBK do not accept any responsibility for any errors, omissionsor misinformation whatsoever in this publication and shall have noliability whatsoever. The information contained in this publication isnot intended to be an advice on any particular matter. No readershould act on the basis of any matter contained in this publicationwithout appropriate professional advice.