Rule 40. Membership and general provisions

1. The credit union shall have a board of directors.
2. At the time of the adoption of these rules, the board of directors shall consist of _11_____ members, all of whom shall be members of the credit union.
3. The credit union shall comply with the Acts and all applicable requirements of financial services legislation, in particular but without limit to the Fitness & Probity Regulations for Credit Unions, with respect to the appointment, and continuation in office, of directors.
4. Only a natural person of full age may be a director of the credit union.
5. The following persons are not eligible to become a director of the credit union:
   • an employee or voluntary assistant of the credit union or an employee of any other credit union;
   • a member of the board oversight committee of the credit union;
   • a director of any other credit union;
   • an employee of a representative body of which the credit union is a member, where that employee’s role could expose them to a potential conflict of interest;
   • a public servant (within the meaning of the Financial Emergency Measures in the Public Interest Act 2009) assigned to the Department of Finance and involved in advising the Minister on credit union issues or in the examination of credit union
     issues;
   • a member of the Commission of the Bank;
   • an officer (within the meaning of section 2 of the Central Bank Act 1942) or other employee of the Bank and who is involved in the regulation of credit unions;
   • the Financial Services Ombudsman (within the meaning of section 2 of the Central Bank Act 1942) or a Bureau staff member (within the meaning of section 57BA of that Act);
   • a member of the Irish Financial Services Appeals Tribunal or a member of its staff (including the Registrar of the Appeals Tribunal appointed under section 57J of the Central Bank Act 1942);
   • the chief executive of the National Consumer Agency, an authorised officer of that Agency (within the meaning of section 2 of the Consumer Protection Act 2007) or any other member of its staff;
   • the auditor of the credit union or a person employed or engaged by that auditor;
   • a solicitor or other professional adviser who has been engaged by or on behalf of the credit union within the previous 3 years;
   • a person who is a spouse or civil partner, parent, sibling or child of a director, board oversight committee member or employee of that credit union.
6. A person shall resign from being a director of a credit union if and when he becomes a person to whom any provision of paragraph (5) relates.

Rule 41. Election

The board of directors of a credit union shall be elected:

• where the organisation meeting occurs after the commencement of section 53(6) of the Act (as amended by section 15 of the Credit Union and Co-operation with Overseas Regulators Act 2012), by secret ballot at the organisation meeting and, subject to rule 43 and rule 52, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting, and
• in any other case, by secret ballot at the annual general meeting first occurring after the commencement of section 53(6) (as amended by section 15 of the Credit Union and Co-operation with Overseas Regulators Act 2012) or, if earlier than that annual general meeting, at a special general meeting called for the purpose of such ballot and, subject to rule 43 and rule 52 subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting.

Rule 42. Terms of office

1. The term of office of a director:
   • shall begin at the conclusion of the general meeting or organisation meeting at which he is elected; and
   • shall not extend beyond the third subsequent annual general meeting.
2. • The regular terms of office for directors shall be fixed at the organisation meeting, or at a general meeting upon any increase or decrease in the number of directors.
   • Regular terms shall be so fixed that at each annual general meeting the number of directors whose term of office expires shall, as near as possible, be the same.
3. Except where the Act or any other applicable requirement of financial services legislation otherwise provides, retiring directors shall be eligible for re-election immediately on retirement.
4. A member of a credit union may not be appointed or elected to the board of directors if he has served for more than 12 years in aggregate in the previous 15 years on either the board of directors or the board oversight committee of the credit union.
5. For directors of a credit union or members of the board oversight committee who were already directors or members of the board oversight committee on the date of the commencement of section 53 (as amended by the 2012 Act) in respect of such credit union, the 12 year period set out in paragraph (4) commences on the date that section so commenced.

Rule 43. Casual vacancies

1. Subject to the requirements of the Act and all other applicable requirements of financial services legislation, the board of directors may at any time and from time to time appoint, by a vote of a majority of the directors then holding office, a member of the credit union including a former director) to be a director to fill a casual vacancy. A director appointed under this rule shall hold office from the date of the appointment to the next following annual general meeting of the credit union, or, if it is earlier, the next special general meeting at which an election is held for members of the board of directors.
2. Where the secretary of the credit union becomes aware that all the directors of the credit union intend to resign on the same date, he shall give written notice of their intention to the Bank, the Irish League of Credit Unions and the board oversight committee.

Rule 44. Regular meetings

1. The board of directors shall meet as often as may be appropriate to fulfil its responsibilities effectively and prudently and reflecting the nature, scale and complexity of the credit union but in any event:
   • the board of directors shall hold at least ten meetings in any year, and
   • the interval between any two meetings of the board of directors shall not be greater than six weeks.
2. Meetings of the board of directors of a credit union shall be chaired by the chair or, in his absence, by the vice-chair or, in the absence of the chair and the vice-chair, in a manner prescribed by the Bank or, if no manner is so prescribed, by such director as is nominated by majority vote by the directors present to chair that meeting.
3. All meetings of the board of directors, including but not limited to, matters relating to the agenda and minutes shall be conducted in accordance with section 54 of the Act.

Rule 45. Quorum

1. A majority of the number of directors specified in the rules (inclusive of any vacancies) shall constitute a quorum for the transaction of any business at any meeting of the board of directors, but fewer than a quorum may adjourn to any date not less than two nor more than thirty days from the date of the meeting.
2. The quorum for an adjourned meeting shall be five or such greater number as the board of directors has previously decided by resolution.
3. Notice of an adjourned meeting shall be given as provided in rule 47.

Rule 46. Additional meeting

The chair or, in his absence, the vice-chair, may call a special meeting of the board of directors at any time and shall do so upon the written request of any five directors. The chair or, in his absence, the vice-chair shall fix the date, time and place of such meetings unless the board of
directors, by resolution, decides otherwise.

Rule 47. Notice

All meetings of the board of directors shall be summoned in such manner as the board of directors may from time to time resolve.

Rule 48. Removal of a director from office

1. Subject to paragraph (2), the credit union may, by resolution of a majority of the members present and voting at a special general meeting called for that purpose, remove a director from office.
2. The secretary shall, not less than twenty one days before the date of the special general meeting at which it is proposed to move the resolution referred to in paragraph (1), give written notice of the meeting to the director concerned.
3. Where notice is given of such a resolution as is mentioned in paragraph (1) and the director concerned makes, in relation to it, representations in writing to the credit union (not exceeding a reasonable length) and requests their notification to the members of the credit union, the credit union shall, subject to paragraph (5) (unless the representations are received by it too late to do so):
   • in any notice of the proposed resolution given to members of the credit union, state the fact of the representations having been made; and
   • send a copy of the representations to every member of the credit union to whom notice of the meeting is sent (whether before or after the credit union receives the representations).
4. Subject to paragraph (5), and whether or not copies of any representations made by him have been sent as mentioned in paragraph (3), the director concerned may require that, without prejudice to his right to be heard orally, the representations made by him shall be read out at the special general meeting.
5. Paragraphs (3) and (4) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the Bank is satisfied that compliance with the paragraphs would diminish substantially public confidence in the credit union or that the rights conferred by them are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.
6. A vacancy arising from the removal of a director under this rule shall be filled in accordance with the provisions of rule 43.

Rule 49. Voting

Each director shall have one vote on any matter at a meeting of the board of directors provided that the chair of the meeting shall have a second or casting vote in the event of equality of voting.

Rule 50. Powers and functions

Subject to law and these rules the board of directors shall have responsibility for the general control, direction and management of the credit union and the functions of the board of directors shall include the following:

1. setting the strategy for the credit union by preparing, including active participation and examination of strategies being developed or proposed by the manager, management team or others and preparing and adopting a strategic plan;
2. monitoring the implementation of the strategic plan by the credit union, reviewing the performance of the credit union against the measurements defined in the strategic plan and assessing, on a regular basis but at least annually, how the strategic objectives of
   the credit union are being achieved;
3. reviewing the credit union’s strategic plan on a regular basis, but at least annually, to ensure that it remains relevant and up to date and modifying or revising the strategic plan to incorporate any changes required as a result of the review;
4. operating a comprehensive decision-making process, considering all matters it considers to be of material relevance to the credit union and documenting the reasons for its decisions;
5. the appointment of a manager, risk management officer and compliance officer and the approval of the appointment of any other member of the management team;
6. ensuring that there is an effective management team in place;
7. reviewing the performance of the manager on an annual basis and monitoring on an ongoing basis his or her continued appropriateness to be the manager;
8. ensuring that the performance of every other employee and voluntary assistant, is reviewed and monitored on an ongoing basis to ensure his or her continued appropriateness for his or her role in the credit union;
9. identifying, in consultation with the manager, other officer positions within the credit union that:
   • are essential to the proper management of the credit union,
   • are likely to enable the person holding the position to exercise significant influence on the conduct of the affairs of the credit union, and which, together with the manager and risk management officer of the credit union are referred to in the Act as the ‘management team’;
10. ensuring there is an appropriate succession plan in place in respect of each of the positions that constitute the management team;
11. exercising appropriate oversight over execution by the management team of the agreed strategies, goals and objectives;
12. reviewing and approving all elements of the risk management system on a regular basis, but at least annually and, in particular—
    • assessing the appropriateness of the risk management system,
    • taking account of any changes to the strategic plan including the credit union’s resources or the external environment, and
    • taking measures necessary to address any deficiencies identified in the risk management system;
13. ensuring compliance with all requirements imposed on the credit union by or under the Acts or any other financial services legislation;
14. the removal from office of an officer of the credit union, except directors or members of the board oversight committee, where the board of directors has duly determined that there has been a failure by the person concerned to perform duties or responsibilities;
15. approving, reviewing, and updating, where necessary, but at least annually, all plans, policies and procedures of the credit union, including the following:
    • lending policies including lending limits;
    • policies in relation to members’ shares and deposits including the setting of a maximum number of shares a member can hold and a maximum amount that a member may deposit;
    • liquidity management policies;
    • reserve management policies;
    • investment policies;
    • the designating of depositories for the funds of the credit union and signatories to cheques, drafts or similar documents drawn on the credit union;
    • standards of conduct and ethical behaviour for officers;
    • remuneration policies and practices;
    • compliance plan and policies;
    • records management policies;
    • information systems and management information policies;
    • business continuity plan;
    • asset and liability management policies;
    • outsourcing policies;
    • risk management policy;
    • conflicts of interest policy;
    • such other matters as the Bank may prescribe;
16. the recommendation to members, for approval, of dividends to members;
17. ensuring the accounts of the credit union are submitted for audit;
18. reporting to the members of the credit union at the annual general meeting, including nominating a member of the board of directors to present the annual accounts at the annual general meeting;
19. reviewing and considering any update of financial statements provided to the board of directors by the manager under section 63A(4)(c) of the Act;
20. making provision for the disclosure of its books and documents for the purpose of enabling it to enter into contracts for the benefit of the credit union.

Rule 51. Acts of a director

The acts of a director of the credit union shall be valid notwithstanding any defect in the appointment of the director which may be subsequently discovered.

Rule 52. Supplemental provisions

1. A register of directors shall be kept by the secretary of the credit union and signed by all the directors each year after the annual general meeting or, in the case of a director appointed to fill a casual vacancy, after his appointment.
2. In the event that the number of directors of the credit union falls to less than half the number specified in rule 40(2), the secretary shall forthwith notify the Bank and the board oversight committee of the credit union.
3. Where any of the following events occurs:
   • the secretary of the credit union has given notice under section 53(17) of the Act that all the directors of the credit union intend to resign on the same date,
   • all the directors have been removed or suspended in accordance with section 96(1) of the Act, or
   • there is no board of directors,
   • the board oversight committee shall convene a special general meeting of the credit union, within one month of the occurrence of the event in question, to elect a board of directors.
4. A director of the credit union who is also a member of the membership committee, credit committee or credit control committee thereof, or who is also chair, vice-chair or secretary thereof shall, upon ceasing to hold office as a director, cease to be a member of any of the committees aforesaid, or cease to hold any of the offices aforesaid.