National Supervisors Forum Annual Conference

1. National Supervisors ForumAnnual 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: carmelmotherway@eircom.net Mobile: 353 87 2361642

2. 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

3. 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”

4. 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

5. In Summary • Be present • Be the watchers – understand what’s going on • what should be going on... • Give the board a wake-up call when needed • Act to remove a director when necessary • Keep minutes and records • Report to members

6. Supervisors Oversight Watches how decisions are made How the board exercises: Direction Control Management Manager Exercises operations control Meets targets set by board Makes decisions: Short-run operating decisions Action decisions Division of Labour (Revisited) • Board • Exercises primary control • Sets targets for manager • Makes decisions: • Long-run decisions • Idea decisions

7. 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

8. 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

9. What Makes A Good Director? • 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. Giving Feedback

16. 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

17. 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

18. Tips On Timing • Positive feedback = ASAP • Negative feedback = ASAR • Both types need to be given regularly

19. For Example Try this: • The oversight committee has observed.... • The impact of this is.... • It would be preferable...