Chairperson Role & Responsibilities
Roles and Responsibilities
The Chairperson, elected by the board from its own number, occupies a unique leadership position, there are four primary roles:
Leader
The Chairperson must identify with the whole credit union, not only with its constituent parts. In doing so, he/she should lead the members of the board and its committees in identifying the goals of the credit union and to facilitate the participation of the board, management and staff in reaching those goals. The Chairperson also provides the leadership in review and evaluation of board and committee performance, managing and appraising the Manager and the overall performance of the credit union.
Presiding Officer
The Chairperson is responsible, alongside the Secretary, for ensuring that agendas are prepared and for chairing the various meetings and planning session of the board of directors. He/she should facilitate the meetings and ensure that those present have the opportunity to express their views and that the requirements of a democratic and legal process are met when arriving at decisions.
Co-ordinator
The Chairperson oversees several tasks. As an ex-officio member of all committees, they keep in touch with all committee activities. The Chairperson oversees the planning and budget cycles and works closely with the general manager. They must also ensure that the Board carries out its duties as required by law and regulation.
Figurehead and Spokesperson
The Chairperson will often represent the Board at public functions. The directors and members require a public image of trust, credibility and confidence in their organisation. A Chairperson, as the Board’s representative, must be able and willing to express the views of the credit union at the various meetings.
Even although the Chairperson has been entrusted with leadership and other functions, it must be emphasised that the Board as a collective functioning body, requires accountability from both the Chairperson and the manager for his or her actions.
The person elected as Chairperson is frequently someone who has already had some experience on the Board. It is important however, to think of the role not as an honorary position given for time served but as a leadership and facilitating role.
The Board should consider the person’s ability to lead, manage and facilitate the Board and the remainder of the credit union.
Limits to the Chairperson’s Authority
The Chairperson’s authority is only as a member of the board, not as an individual. The chairperson can only act in accordance with the wishes of the board as set out in the rules or agreed policies.
- If the Chairperson has authority to take certain decision between meetings – where it is not possible to call a board meeting. – such authority should be in writing (in a role description, board minutes or policy like a scheme of delegation) and agreed by the board. Decisions and actions must be reported accurately and promptly to the board
- The chairperson must fulfil their legal responsibilities as a member of the board
- The chairperson must act in the best interests of the credit union at all times.
It is good governance to ensure that safeguards are in place that put limitations on what actions can be dealt with in this way e.g. it would not be acceptable for the chairperson to change a policy, even if all the board allowed him/her.
Roles and responsibilities
The Chairperson is a member of the credit union Board and therefore has the same duties and responsibilities as other Board members but will also have additional responsibilities which include
- To act as line manger to the Manager
- To plan and manage the annual cycle of Board meetings
- To set/agree the agenda of the Board meetings, with the Secretary
- To chair Board meetings
- To provide direction in policy making and strategy planning
- To provide impartiality and objectivity to decision making
- To address conflicts within the Board
- To represent the Board outside of the credit union
- To chair members’ meetings
- To act as spokesperson
- To keep an overview of the credit union
Level of Commitment and Skills
The Chairperson needs to demonstrate attributes and skills that show a high level of commitment to the credit union including:
- Commitment of time and effort to their role
- Strategic vision
- Ability to remain impartial
- Willingness to speak their mind
- Understanding of the legal and regulatory framework
- Ability to chair meetings and facilitate a team
- Communication and interpersonal skills
The chairperson should be given access to training on specific skills such as line management, strategy planning, public speaking and chairing skills. The appointment of a Vice-Chairperson can help spread the load and responsibilities.
Approved Persons’ Status
The chairperson must have Approved Persons’ Status SF8 Apportionment and Oversight Function – before taking up their duties.
Induction and Training
The Chairperson should be provided with an induction plan that enables him/her to gain an understanding of the specific responsibilities and develop the confidence and authority to carry out the role.
The induction should include
- Main responsibilities
- Duties as Chairperson
- Ongoing issues
- Update on organisational issues
- Regulatory and legal responsibilities
- Credit union rules
- Face to face meeting with key staff
- Meeting with former chair
- Skills audit and ongoing training plans to include
- Chairing skills
- Line management
- Public speaking
- Regulatory and financial skills
On taking up his/her duties the Chairperson should have access to:
- Credit union governing documentation
- Business and strategic plan
- Code of conduct/behavioural standards
- Organisational tree of committees and of staff structure
- Access to PRA Rulebook and other regulatory guidelines
Chairperson in a Managing Role
The two key areas where the Chairperson takes on a specific management role are in managing the Board and managing the Manager.
Managing Board Meetings
Credit Union Boards are required to meet at least once a month. To meet less frequently the credit union must seek a waiver from the regulator. It is the responsibility of ALL members of the Board to ensure that meetings are run effectively but the Chairperson has a particular role in the efficient and effective conduct of meetings.
Generally, the Chairperson’s role is to direct the meeting by moving through the agenda, listening, directing whilst being firm but fair. He/she also must:
- Ensure a proper agenda has been drawn up and minutes are taken
- Direct discussion and encourage all members of the board to participate
- Clarify and summarise decision and actions throughout
- Ensure everyone understand the issues under discussion
- Ensure that decision taken by the Board are implemented
- Use a casting vote if a decision is tied
- Remain impartial and fair throughout
Opening the meeting
Always start the meeting on time by welcoming participants and reminding them of the rules on confidentiality. Do not be tempted to go over old ground for latecomers.
Papers
Work on the assumption that all participants have read their papers prior to the meeting.
Discussion
Do not be afraid to bring a discussion to an end to move the agenda forward, if you say the discussion is finished- it is finished.
Decisions
Clarify decisions and actions. There are two common methods of making decisions
1. By consensus 2. By taking a vote
Whichever method you use, always clarify with the minute taker when a decision is taken that it is properly recorded.
Agenda
If the agenda tends to be long, try a consent agenda. A consent agenda is a practice by which the mundane and non-controversial board action items are organised apart for the rest of the agenda and approved as a group. This includes all of the business items that require formal board approval and yet, because they are not controversial there is no need for Board discussion before taking a vote. Items may be on a consent agenda only if all Board members agree. If even one member considers a specific item to need discussion it must be removed and placed on the regular agenda for the Board meeting.
Disruptions
Meetings are sometimes disrupted by one or more individual’s intent on making their point. When a meeting is disrupted, it is the responsibility of the chair to deal with the problem quickly and restore order. The credit union should have a code of conduct that includes guidelines and rules on behaviour at meetings.
If you develop a track record of leading successful meetings, then your peers are much more likely to defer to your judgement. Everyone wants to be associated with a winner but always remember that your peers must be treated with respect or resentment and subsequent loss of authority are likely to follow.
Managing the Manager
To work together effectively, the Chairperson and Manager must understand their respective roles and levels of authority.
In addition to working together to develop effective management of the credit union, the Chairperson would normally be responsible for the line management of the Manager.
The Board is responsible for recruiting the right manager and to define his/her role and responsibilities, The Manager has a right, as an employee, to be supported and managed by the board in the same way that he/she should manager the other employees.
The whole subject of employment of staff is a complex one and it is essential that the Chairperson should have access to advice and information. The key areas that need to be considered are:
Recruitment, Induction and Employees Contracts
The Board and Chairperson must seek to recruit the best person for the job and ensure that they follow best practice in recruitment and employment procedures. Proper induction should ensure that roles and responsibilities are made clear. The contract will lay out the terms and conditions of employment.
Equal Opportunities
It is vital that the board and manager ensure that an equal opportunities policy is in place and an implemented properly.
Supervision
The manager must be given the opportunity to discuss ongoing operational issues as well as issues regarding his/her own specific role. Supervision is a mechanism for supporting staff including highlighting and working out any problems. You must make it clear who the supervisor will be, how often supervision will take place and how it will be carried out. It is useful to keep records of supervision sessions. Regular meetings or phone calls will help support the role and ensure the Chairperson is keeping up to date with matters of concern to the Board.
Appraisal and Personal Development
Regular appraisal of the manager is an important part of the governance of the credit union and will strengthen the relationship between the Board and senior manager. Professional development should be made available to enable the manager to enhance skills in running the credit union.
Disciplinary and Grievance Procedures
These are the mechanisms by which the credit union deals with problems between employees and the credit union. The disciplinary procedure shows the steps the management should take in the event of a complaint against an employee in the case of poor performance by the employee. If the employee has a problem with the way he/she is treated at work, the grievance policy outlines how such a complaint should be dealt with. Disciplinary and grievance procedures must comply with the statutory procedures.
Health and Safety Policy
This is important and will provide details of working conditions and what is expected from staff in relation to health and safety, as well as what the responsibilities of the Board are under the Health & Safety Act.
It is important for the protection of the credit union and its employees that proper employment practices are in place. It is good practice to review policies relating to HR on a regular basis.
Governance
An important role for the Chairperson of a credit union is in overseeing good governance practice.
Corporate Governance refers to the framework from which credit union directors can be inspired to work collectively to build an effective and sustainable credit union. It is concerned with the practices and procedure that the organisation follows in order to achieve its specific goals. A Code of Governance offers a framework for the Board to better govern the credit union and monitor effectiveness.
Why a code of Governance
Poor governance as evidenced by FCA is an operational risk.
There are various legal and regulatory structures already in place in regard to credit unions. The various Acts, Rulebook, and credit union own rules determine what a credit union does and how it is to be operated. However, there is very little in law or regulation that determines what the Board must do to be accountable to the stakeholders in the credit union.
The basis of good governance is to protect and develop the credit union on behalf of its members and stakeholders. It demonstrates to stakeholders that the credit union is a safe, well run and ethical organisation.
Threats to Good Governance
Complacency Over-reliance on others’ expertise and knowledge
Decisions made on the nod
Ignoring or hiding the signs
Lack of Competency Lack of diversity of skills
Little understanding of the role
Confusion of roles and responsibilities
Misuse of Power Cronyism, nepotism
Self interest
Misuse of products and services
Bad Behaviour Lack of respect
Inability to negotiate
Bad employment practices
By using the code of governance as a benchmark, the credit union is able to show stakeholders how it achieves standards of good practice, upholds the integrity of the credit union and provides added value to its membership.
Reporting to Members
One element of signing up to a Code of Practice is that the credit union’s achievements in reaching compliance with the code are reported to members.
There are a number of ways this can be achieved but particularly it is good practice for the credit union to produce an Annual Report for its members and stakeholders which include information on how well the credit union is achieving standards of good governance. An annual report is also a useful tool in demonstrating to outside bodies such as funders and local authorities the steps taken by the credit union to protect interests of stakeholders and the integrity of the credit union as an organisation. There need not be large expensive glossy documents. Often a few sides desk top published photocopied is enough. Many organisations now produce a Stakeholder Report as a separate document to the annual report which outlines levels of compliance and achievement on issues of importance to stakeholders. Reports such as these provide added value to an organisation.
Stakeholders
The stakeholders of the credit union are those who have a vested interest in the success of the credit union whether financial or otherwise. The most obvious stakeholder is the credit union member because they are the users of the service but also the owners of the credit union. When looking at members as users of services they should be separated as savers and borrowers as they will have different needs and wants. There are other important stakeholders in the credit union and the Board must take steps to identify who they are and what they require from the credit union.
- Regulator
The Regulator’s responsibility is to protect consumers’ (members’) money and as such requires the credit union to comply with its own requirements as well as those required by law.
- Employees and Volunteers
These people need to protect their livelihoods and/or their personal development needs. They will have an interest in the credit union as a social business but have added needs including remuneration, protection and development.
- Government, Local Authorities and Policy Makers
Policy makers determine the legislative and regulatory framework under which credit unions operate, therefore should be informed of ongoing needs of the sector.
- General Public, Potential Members
These are the future members of the credit union and the way the credit union is perceived via the media or marketing is essential
- Funders
Funders have invested into the credit union and have an interest in protecting their investment and achieving their own social goals.
The Chairperson – a Checklist
- The Chairperson of a credit union undertakes the roles of leader, presiding officer, co-ordinator, figurehead and spokesperson
- The Chair’s authority is as a member of the Board, not as an individual and he/she can act only on behalf of the Board, according to agreed policies
- In addition to the normal roles and responsibilities as a board member, the Chairperson also acts as line manager to the Manager, oversees the running of Board meetings, address conflict on the Board and Chair members’ meetings.
- A key role for the Chairperson is facilitating a positive and effective partnership between the Board and the Manger
- The Chairperson must obtain Approved Person’s Status CF8 Apportionment and Oversight function before undertaking any duties
- When the Board is developing the strategic plan, the Chairperson has a role in influencing the direction and vision of the credit union.
The Chairperson takes a key role in overseeing effective governance of the credit union and maintaining accountability to members and other stakeholders.