Credit unions in Ireland are regulated and supervised under the Credit Union Act, 1997 (the 1997 Act) and regulations issued by Central Bank, which set out the framework for the registration, regulation and operation of credit unions.
Board of directors
Sections 53-57 of the 1997 Act set out the relevant legislative provisions relating to the directors of credit unions. The process for the nomination of candidates to the board of directors is a matter for the nomination committee of the credit union. Once nominated, members of the credit union vote to elect one or more of the nominated candidates to fill vacancies on the board of directors at an annual general meeting or special general meeting of the credit union at which an election is held for members of the board of directors.
Role of Nomination committee
Section 56B of the 1997 Act sets out detailed provisions relating to the nomination committee of credit unions.
Section 56B(1) provides that the board of directors of a credit union shall establish a committee (referred to as the “nomination committee”) whose members shall be elected in accordance with section 56B(13).
In accordance with Section 56B(3), only members of the board of directors of a credit union are eligible to serve on the nomination committee of a credit union.
Section 56B(4) sets out the responsibilities of the nomination committee, which include inter-alia:
- identifying candidates to be nominated for appointment to the board of directors;
- accepting nominations of candidates proposed to be appointed to the board of directors; and
- proposing candidates, for election by a general meeting, to be members of the board of directors.
Only candidates nominated for appointment as a member of the board of directors through the nomination committee may be put forward or seek election to the board of directors at a general meeting of the credit union at which an election is held, in line with Section 56B(5) of the 1997 Act.
Section 56B(7) of the 1997 Act requires that, in identifying prospective candidates and considering the proposing of candidates, the nomination committee shall consider the balance of skills, experience and knowledge on the current board of directors and any review undertaken by it (at least annually) in relation to the composition of the board of directors under section 56B(11).
On election of members to the nomination committee, Section 56B(13)(a) states the following:
(a) At a meeting of the board of directors of a credit union –
(i) which is held immediately after the organisation meeting, an annual general meeting or special general meeting at which an election is held for members of the board of directors, an
(ii) which is chaired by a member of the board oversight committee,
the board shall elect by secret ballot directors to fill such positions as are then vacant on the nomination committee.
Section 56B(13)(b) makes provision for the election of a member to the nomination committee in the event of a casual vacancy.
Credit Union Handbook
The Deputy may wish to note that the Central Bank has developed a Credit Union Handbook, the purpose of which is to assist credit unions by bringing together in one place a number of legal and regulatory requirements and guidance that apply to credit unions. The Central Bank has provided guidance to credit unions on the role of Nomination Committee as outlined in the Governance Chapter of the Credit Union Handbook.
The Credit Union Handbook is publicly available on the Central Bank’s website.
