Association of British Credit Unions Limited. Board Policy Manual

Transcription

1 Association of British Credit Unions Limited Board Policy Manual May 2017

2 1. AIMS The Association of British Credit Unions Limited (ABCUL) exists on behalf of its Member credit unions to ensure that credit unions grow and thrive, and become the primary source of affordable, high quality and ethical financial services for the people of Great Britain. Accordingly, ABCUL will bring about timely and cost effective results in three key areas Ensuring credit unions have the skills, knowledge and facilities to serve the financial needs of the people of Britain. Credit unions need skills and knowledge to meet the financial needs and desires of their members, and the business models, products and services to enable them to do so. Accordingly, ABCUL will: Provide a high quality advice, training and information service so that Members have the information they need to be able to: a) Comply with all relevant legal and regulatory requirements; b) Plan and operate a successful, sustainable financial cooperative; c) Access a wide range of training and development activities; and d) Assess ABCUL s effectiveness and play an informed role in its democracy. e) Be prepared for future changes to legislation, regulation and the wider financial services market Provide or facilitate the provision of such services and products as may be necessary, expedient or desirable for its Members and their members Support the development of Cornerstone Mutual Services and The Credit Union Foundation as sustainable organisations within the ABCUL family Ensuring credit unions operate within an enabling legislative and proportionate regulatory environment. Members need enabling legislation that allows them to provide a wide range of modern, convenient and accessible financial services to their members, and regulation which is proportionate to the scale of their business and allows them to compete on a level playing field with other providers of financial services. Accordingly, ABCUL will: Represent the credit union movement in relation to all relevant organisations, including government at all levels, the European Union, and regulators Ensuring the public has a positive perception of credit unions. The British public should view credit unions as ethical, credible and effective providers of financial services to a wide range of people. Accordingly, ABCUL will: Educate officers, credit union members and the general public in the philosophy and practices of credit unions. Page 2

3 Promote credit unions as ethical, credible and effective providers of financial services to a wide range of people Attracting Members to the Association ABCUL values diversity in its membership, and the strength that brings to the Association when representing members to policy makers. It is therefore important that the Association s membership is representative of the full British credit union sector. Accordingly ABCUL will: Seek to build and maintain trust in the Association among its members and stakeholders Attract more credit unions to join the Association Seek to ensure its offering is relevant and attractive to credit unions of different sizes, different business models and different membership bases Actively seek to represent credit unions from across England, Scotland and Wales Seek to identify gaps in the types of credit unions it represents, identify reasons for any gaps and take action to rectify the situation as necessary. Page 3

4 2. DELEGATION TO THE CHIEF EXECUTIVE The ABCUL Board s only formal connection to the Association s operations, achievements and conduct will be through the Chief Executive. 2.1 Accountability of the Chief Executive The Chief Executive is the Board s only link to operational achievement and conduct. All authority and accountability of staff is considered to be the authority and accountability of the Chief Executive. Accordingly: Decisions or instructions of individual Directors, officers or committees are not binding on the Chief Executive except where the Board has specifically authorised such exercise of authority Directors or committees may request information or assistance without Board authorisation but the Chief Executive may refuse such requests if, in his/her opinion, they require a material amount of staff time or funds, or are disruptive The Board will never give instructions to persons who report directly or indirectly to the Chief Executive The Board will not evaluate, either formally or informally, any staff other than the Chief Executive Delegation to the Chief Executive The Board will instruct the Chief Executive through written policies that define the objectives to be achieved and the situations and actions to be avoided. Accordingly, the Board: Will develop Policies requiring the Chief Executive to achieve specified results, for specified recipients, within specified financial limits Will develop policies that limit the latitude the Chief Executive may exercise in choosing the organisational means, which will describe those practices, activities, decisions and circumstances that would be unacceptable to the Board even if they were to be effective Authorises the Chief Executive to establish all further policies, make all decisions, take all actions, establish all practices, and pursue all activities, as long as he/she uses a reasonable interpretation of the Board s policies May change its policies at any time, thereby shifting the boundary between Board and Chief Executive responsibilities, and by so doing change the latitude of choice given to the Chief Executive Monitoring of Chief Executive Performance Systematic and rigorous monitoring of the Chief Executive s performance will be against the expected job outputs as set out in the Board s policies on organisational accomplishments Page 4

5 and operational limitations. The purpose of monitoring will be to determine whether or not expectations expressed in Board policies have been met. Accordingly, the Board will: Confirm and agree to the Chief Executive s interpretation of Board policies with the Board being the judge of reasonableness Obtain by monitoring information by using one or more of three methods: a) Reports from the Chief Executive; b) Reports from external, disinterested third parties selected by the Board; or c) Direct Board inspection Assess whether the data demonstrate the accomplishment of the interpretation Monitor all policies that instruct the Chief Executive, at a frequency and by the method set out in Annex Determine the remuneration of the Chief Executive during the month of October, after a review of monitoring reports received in the last year. One of the key sources of external report will be the Association s auditor. Accordingly, the Board will: Select an Auditor to recommend to the ABCUL AGM and normally change the auditor at least every five years. Page 5

6 3. EXECUTIVE LIMITATIONS The Board is ultimately responsible for the reputation, financial health and organisational performance of the Association. Accordingly, the Chief Executive shall not cause or allow any organisational practice, activity, decision or circumstance that is illegal, imprudent or in violation of commonly accepted business and professional ethics and practices Relationship with Members ABCUL is the principal, democratically governed representative body of the credit union movement in Great Britain, so relationships with Members are paramount. Accordingly, the Chief Executive shall ensure that: Responses to Members and those applying to be Members are accurate and timely There is a system implemented for responding effectively to Member complaints Members, partners or public concerns about ABCUL s operations are addressed in a fair and timely manner Members are consulted on issues which could affect their ability to operate as credit unions Information is only collected when there is clear need The Association complies with data protection legislation The Association has a clear understanding of what Members do and do not expect from it Ensure that members overall satisfaction with ABCUL remains at a minimum of 70% At least 80% of members interact together through Forums of other Peer Groups at least once per year Financial planning Budgets, projections or other financial plans for any period shall not deviate materially from achieving the Board s priorities. Accordingly, the Chief Executive shall not: Put the Association at significant financial risk Risk incurring those situations or conditions described as unacceptable in Board policies Prepare plans that omit: a) Credible projections of income and expenses; b) Clear separation of capital and revenue items; c) Cash flow forecasts; and d) Disclosure of planning assumptions Provide less for Board prerogatives during the year than is set forth in the Cost of Governance policy. Page 6

7 3.3. Use of funds The Chief Executive shall not cause or allow the development of significant financial risk or material deviation of actual expenditures from Board priorities. Accordingly, the Chief Executive shall not: Incur a loss for the year on ABCUL s core income and expenditure (excluding Forums) Incur debt in an amount greater than can be repaid by certain and available revenues within sixty days Use any reserves without express decision of the Board Fail to settle payroll and debts in a timely manner Allow tax payments or other government ordered payments or reports to be overdue or inaccurately reported Make any purchase or enter into any contract without due consideration to quality, aftercare, value for money, opportunity for fair competition and possible conflict of interest Make any purchase or enter into any contract of: a) More than 10k without having obtained comparative prices and quality; or b) More than 100k without a stringent method of assuring the balance of long term quality and cost 1. Splitting orders to avoid any of these limits is unacceptable Permit debts owed to the Association to continue after a reasonable period of grace without aggressively pursuing them Protection of Assets The Chief Executive shall not allow ABCUL s assets to be unprotected, inadequately maintained or unnecessarily risked. Accordingly, the Chief executive shall: Insure adequately against theft and injury and against liability losses to Board members, staff and the Association itself Not subject equipment and facilities to improper wear and tear or insufficient maintenance Ensure that reserves are at all times equal to at least 3 months of core operating costs Develop a mitigation plan for any financial risk that threatens the projected surplus / deficit for the year Only receive, process or disburse funds under controls sufficient to meet the legal and Board appointed auditor standards Only invest or hold operating capital in deposit accounts with a PRA/FCA regulated deposit taker Only enter into grant or contract arrangements that emphasise the achievement of ABCUL s aims while avoiding unacceptable means. 1 This amount may be exceeded in the case of the CUEP. Page 7

8 Not create obligations over a longer term than revenues can be safely projected Ensure that grant or contract funds are not used in illegal, imprudent or unethical ways Ensure that there is at least one member of senior management who is sufficiently familiar with Board and Chief Executive issues and processes to enable them to take over with reasonable proficiency as an interim successor. At any time, all Officers of the ABCUL Board should be aware of the identity of this person Protect intellectual property, information and files from loss or significant damage Not expose the Association, its Board, or its staff to claims of liability Treatment of Staff The Chief Executive will not cause or allow conditions that are illegal, unsafe, inequitable or unclear, with respect to the treatment of paid and volunteer staff. Accordingly, the Chief Executive must: Maintain written human resources policies that: a) Clarify legislation and rules for staff; b) Provide for fair and thorough handling of disciplinary procedures and grievances; c) Are accessible to all employees and consistently applied; and d) Are up to date with current employment law Provide adequate documentation, security and retention of personnel records and all personnel related decisions Establish remuneration and benefits that are internally equitable and do not deviate materially from the market rates for the skills employed Ensure there is no risk to financial integrity or public image with respect to employment, remuneration or benefits to employees, consultants, contract workers and volunteers Not employ or continue to employ any person who has a relationship beyond their employment with any person or party that may give rise to a conflict of interest, unless: a) The relationship is declared; and b) The potential conflict appropriately managed Not establish or change pension benefits so as to cause unpredictable or inequitable situations, including those that: a) Incur unfunded liabilities; b) Provide less than some basic level of benefits to all full time employees; or c) Allow an employee to lose benefits already accrued form a previous plan Not treat him/herself differently from other key employees. Page 8

9 3.6. Communication and Support to the Board The Chief Executive shall not cause or allow the Board to be uninformed or unsupported in its work. Accordingly, the Chief Executive shall: Report any financial risk that threatens the projected surplus / deficit for the year to the Board Submit accurate, timely, easily comprehensible monitoring data as required by the delegation policies Report any actual or anticipated noncompliance with any policy of the Board in a timely manner Inform the Board of all relevant information, trends, public events of the Association, and internal or external changes which affect the assumptions upon which Board policy has previously been established Voice his/her opinion if he/she believes the Board is not in compliance with its own policies on governance and delegation, particularly if the behaviour may be detrimental to his/her relationship with the Board Ensure the Board has a workable mechanism for official Board, officer or committee communications Not deal with the Board in a way that favours or privileges certain Board members over others except when: a) Fulfilling individual requests for information; or b) Responding to officers or committees delegated to carry out tasks by the Board Supply information to the Board on all decisions delegated by the Board Submit to the Board any items delegated to him/her yet required by law, regulation or contract to be Board approved, along with applicable monitoring information. 3.7 Protection of Reputation The Chief Executive shall not engage in any activity that might result in damage to ABCUL s reputation. Accordingly the Chief Executive shall: Not endanger the Association s public image, its credibility or its ability to accomplish its aims Not accept sponsorship or support from any organisation which owns or partly owns or maintains a significant shareholding in a company (or companies) offering unsecured loans with high interest rates to the financially excluded Not change the organisation s trading name or substantially alter its identity with stakeholders. Page 9

10 4. GOVERNANCE The purpose of the Board, acting on behalf of Members, is to ensure that ABCUL achieves its aims at an appropriate cost while avoiding unacceptable actions and situations Governing Style The Board will govern lawfully, with an emphasis on; a) Outward vision rather than internal preoccupation; b) Encouragement of diversity in viewpoints; c) Strategic leadership rather than administrative detail; d) Clear distinction of Board and Chief Executive roles; e) Collective, rather than individual decisions; f) Future rather than past or present focus; and g) Proactivity rather than reactivity. The Board is ultimately responsible for: a) Determining the company s strategic objectives and policies; b) Monitoring progress towards achieving the objectives and policies; c) Appointing the Chief Executive; and d) Accounting for the Association s activities to its owners and to other relevant parties. The Directors are responsible for ensuring the financial security and effective management of the company and they may exercise all the powers of the company within the limits allowed by relevant legislation and regulation, and the Association s Rules. Accordingly the Board will: Meet sufficiently regularly to discharge its duties effectively Seek: a) To cultivate a sense of group responsibility; b) To be responsible for excellence in governing; c) To be the initiator of policy, not merely a reactor to staff initiatives; and d) Not to use the expertise of individual Directors to substitute for its own judgement, although the expertise of Directors may be used to enhance its understanding Direct the Association through broad written policies reflecting its values and perspectives. The focus will be on the intended long-term impacts outside the staff organisation, not on the administrative or operational means of attaining those effects Be conscientious in matters such as attendance, preparation for meetings, respect of roles, and ensuring excellence in governance. In recognition of this, Directors will contribute no less than an average of two days work a month Not allow the actions of any officer, individual or committee of the Board to be used as an excuse for not fulfilling Board obligations. Page 10

11 Engage in continual development, which will include the induction of new Directors and periodic discussion of how processes can be improved Monitor and discuss its processes and performance regularly to ensure it adheres to the policies it has agreed for itself Follow agreed guidance for conduct of meetings Follow procedures set out to ensure compliance with the law regarding the protection of whistleblowers Board Succession The Members elect Directors and the Board has no direct control. Nevertheless, in keeping with its commitment to excellence in governance, the Board will seek to ensure that there is adequate succession. Accordingly, the Board will: Develop and maintain procedures for nominations and elections which are compliant with rules and law which govern these. Actively solicit candidates who have characteristics that will enable it to govern effectively Ensure each director provides information, including their background and experience, on why they have joined the ABCUL Board and what they have gained from it. Profiles using this will be published on the ABCUL website to show the range of people involved, for the reference of people interested in joining the ABCUL Board Encourage candidates who offer a range of perspectives and backgrounds, and demonstrate: a) Commitment to having ABCUL s mission and work reflect the best interests of credit unions; b) Understanding of the diversity of the Membership; c) Understanding of and commitment to the role of Director; and d) Ability and eagerness to deal with vision, values and the long term Elect senior Board Officers and provide development opportunities to facilitate succession planning in line with agreed procedures Role of Board Committees Board committees will be used sparingly and ordinarily in an ad hoc capacity. When used they must reinforce the wholeness of the Board s job and not interfere with delegation to the Chief Executive. Accordingly, Board committees will not: Help or advise the staff but rather help the Board do its job; Claim to speak or act for the Board except when formally given such authority; Seek to exercise authority over staff; Identify with parts of the organisation rather than the whole; or Be used to monitor performance on a topic that they have helped create. Page 11

12 This policy applies to any group that is formed by Board action, whether or not it is called a committee and regardless of whether the group includes Directors. It does not apply to committees formed under the authority of the Chief Executive Role of the President The President is an especially empowered member of the Board who ensures the integrity of the Board s processes. The President is empowered to chair Board meetings with all the commonly accepted power of that position, such as making a ruling and recognising individuals to speak. The President s role is to ensure that: The Board behaves consistently with its own rules and those legitimately imposed on it from outside the organisation The content of discussions relates only to those issues that, according to Board policy, clearly belong to the Board to decide or monitor Information that is neither for monitoring performance nor Board decisions is avoided or minimised and always noted as such Deliberation is fair, open, thorough, timely, orderly and to the point. The President: Is accountable to the Board Has no individual authority to supervise, direct, or personally evaluate the Chief Executive May represent the Board to outside parties in announcing Board stated positions, to the extent delegated to him or her. The President may delegate this authority but remains accountable for its use Will include on the agenda for a Board meeting any item proposed for discussion by a Director that is submitted to him/her no later than 10 days before the meeting, provided it complies with the relevant Board policies Is responsible for investigating complaints against the Chief Executive and responding to complainants within the standards and timescale set out in the ABCUL Policy and Procedure on Complaints Is responsible for agreeing expenses for directors visits to agreed engagements in accordance with their roles and procedures set out for this purpose Role of the Vice President The Vice President is an officer of the Board whose purpose is to stand in for the President during any period for which the latter is unavailable, for whatever reason. Accordingly: If the President announces that he/she will be unavailable for a specific period, or if the remainder of the Board confirms that the President is unavailable, the Vice President will assume the role of President. The Vice President will continue to occupy the position until the President announces or the remainder of the Board confirms that the President is available again; Page 12

13 While undertaking the role of President, the Vice President will assume all the duties and responsibilities of the President, as set out in Board policies Role of the Secretary The Board Secretary is an officer of the Board whose purpose is to ensure the integrity of the Board s documents. The authority of the secretary is access to and control over Board documents. The Secretary will ensure that: All Board documents and reports needed to comply with legal obligations are accurate and timely Policies reflect the most recent Board decisions The requirements for legal compliance are known to the Board The requirements for format, length and accuracy of Board minutes are known to the Chief Executive Role of the Treasurer The Treasurer is an officer of the Board whose purpose is to report to members on the finances of the Association. The Treasurer will ensure that: Members receive a report at each AGM on the finances of the Association Responses are provided to members queries about the Association s finances Board Code of Conduct The Board commits itself and its members to ethical, business like conduct, including proper use of authority and appropriate decorum. Accordingly, Directors will: Adhere to the Code of Conduct at Annex Support the legitimacy and authority of the final determination of the Board on any matter, without regard to a Director s personal position on the issue Governance Costs Because poor governance costs more than learning to govern well the Board will invest in its governance capacity. Accordingly, the Board will ensure that Its skills, methods and support are sufficient to ensure excellent governance Training and retraining are sufficient to orient new Directors and potential nominees for Board membership, and to maintain and increase existing Directors skills and understanding Outside monitoring assistance is available to ensure the Board can exercise confident control over organisational performance. This includes but is not limited to financial audit. Page 13

14 Outreach is used as needed to ensure the Board s ability to listen to the viewpoints and values of Members Costs are prudently incurred, though not at the expense of endangering the development and maintenance of capability The governance budget for the next year is agreed annually, by October, with estimates to be included for the next two financial years. These will include the planned expenditure on: a) Training, attendance at conferences and workshops (including corporate hospitality in line with limits agreed from time to time); b) Audit and other third party monitoring of organisational performance; c) Surveys, focus groups and other means of surveying Member opinion; Meeting costs; and d) Directors expenses at rates agreed from time to time Specific Responsibilities of the Board The specific responsibility of the ABCUL Board is to ensure the agreed organisational performance on behalf of Members. Accordingly, the Board will: Maintain a high quality, unbiased, high integrity link between Members and the operational organisation and, in particular: a) Consult on its work at major ABCUL events, such as the Annual Conference and AGM b) Consult the Members on major policy issues; c) Publish its Board Policy Manual on the ABCUL website; d) Ensure decisions are made on complaints where the complainant has a right under the ABCUL Complaints Procedure to appeal to the Board.; and e) Decide on the award of occasional honours to board members or other volunteers who have provided distinguished service to the movement Ensure there are adequate resources to run the Association Ensure successful Chief Executive / organisational performance and in particular hold the Chief Executive accountable for delivering services in a cost effective manner Decide on nominations for individuals to represent ABCUL on Cornerstone Mutual Services, The Credit Union Foundation and external bodies and review existing nominations in line with procedures agreed by the Board Follow an annual agenda that: a) Begins in July with the development of its agenda for the next year; b) Incorporates an annual review of its policies; and c) Continually improves its performance through education, external input and analysis. d) Includes a review of the Association s working relationship with Cornerstone Mutual Services and The Credit Union Foundation. Page 14

15 The Board will retain responsibility for: Appointing the Chief Executive, setting his/her remuneration and agreeing any other terms and conditions of service, except insofar as they are consistent with a package for all employees Approving all purchases and contracts with a value of more than 200k Acquiring, purchasing or disposing of property Decisions on the distribution of any surpluses Purchasing or setting up subsidiary companies Arrangements for Annual and Special General Meetings Considering applications for admission or readmission to the Association which have been provisionally approved by the Chief Executive. Page 15