British Columbia's financial services regulator is launching a sweeping review that could result in major changes to the governance of the province's credit unions. Financial Institutions Commission superintendent Carolyn Rogers has said that a task force will soon be appointed to examine the role of boards of directors in charge of credit-union co-operatives. Unlike chartered banks, the people who use credit unions elect their directors.
"We feel like it might be time to look at how you balance both that co-operative approach to governance with the demands of a large and complex financial institution," she explained.
Ms. Rogers said the review wasn't "initiated by any specific issue or problem" but rather as a result of conversations she's had with sector leaders, including Central 1 Credit Union - the trade association representing those institutions in B.C.
Central 1 media relations manager Art Chamberlain said he believes the FICOM review will be looking at everything from director qualifications and term limits to whether boards should be recommending slates of candidates who are best suited to fill those positions.
Vancity, Canada's largest credit union, used a similar recommendation system in its 2011 board elections.
Vancity chief executive officer Tamara Vrooman said the review will also examine wider issues related to the role and effectiveness of credit-union governance, calling it a "prudent measure."
Mr. Chamberlain said Central 1 is also supportive of the review with the caveat that it wouldn't want to see the task force recommend "requirements that were too restrictive and too onerous for smaller credit unions."
Ms. Rogers said she wouldn't speculate on the nature of those recommendations - which will be sent to the provincial government if they involve legislative changes.
She did say, however, that there are a number of ways, such as training, to respect the "co-operative process" while ensuring directors have what it takes to "steer a multibillion-dollar financial institution."
Ms. Rogers said she has a list of individuals interested in joining the task force, which will include credit-union directors and chief executive officers, as well as governance experts.
But invitations to join the task force haven't been sent out yet.
What has been sent out is a notice that FICOM wants to directly award Upturn Consulting Ltd. a contract worth up to $70,000 to develop a work plan for the task force.
That contract, if approved, is expected to take effect on June 27 and last until March 31, 2012.