Cooperative Credit Associations Act (S.C. 1991, c. 48)

Marginal note:Deemed by-laws

• 197 (1) Any matter provided for in the incorporating instrument of the former-Act association on the coming into force of this Part that, under this Act, would be provided for in the by-laws of an association is deemed to be provided for in the by-laws of the association.

• Marginal note:By-law prevails

  (2) Where a by-law of the association made in accordance with sections 192 and 194 amends or repeals any matter referred to in subsection (1), the by-law prevails.

Committees of the Board

Marginal note:Committees

198 The directors of an association may appoint from their number, in addition to the committees referred to in subsection 167(2), such other committees as they deem necessary and, subject to section 202, delegate to those committees such powers of the directors, and assign to those committees such duties, as the directors consider appropriate.

Marginal note:Audit committee

• 199 (1) The audit committee of an association shall consist of at least three directors.

• Marginal note:Membership

  (2) None of the members of the audit committee may be

  • (a) employees of the association or of a subsidiary of the association; or

  • (b) officers of the association or of a subsidiary of the association who are involved in the day-to-day operation of the association or subsidiary.

• Marginal note:Duties of audit committee

  (3) The audit committee of an association shall

  • (a) review the annual statement of the association before the annual statement is approved by the directors;

  • (b) review such returns of the association as the Superintendent may specify;

  • (c) require the management of the association to implement and maintain appropriate internal control procedures;

  • (c.1) review, evaluate and approve those procedures;

  • (d) review such investments and transactions that could adversely affect the well-being of the association as the auditor or any officer of the association may bring to the attention of the committee;

  • (e) meet with the auditor to discuss the annual statement and the returns and transactions referred to in this subsection; and

  • (f) meet with the chief internal auditor of the association, or the officer or employee of the association acting in a similar capacity, and with management of the association, to discuss the effectiveness of the internal control procedures established for the association.

• Marginal note:Report

  (4) In the case of the annual statement and returns of an association that under this Act must be approved by the directors of the association, the audit committee of the association shall report thereon to the directors before the approval is given.

• Marginal note:Required meeting of directors

  (5) The audit committee of an association may call a meeting of the directors of the association to consider any matter of concern to the committee.

Marginal note:Conduct review committee

• 200 (1) The conduct review committee of an association shall consist of at least three directors.

• Marginal note:Membership

  (2) None of the members of the conduct review committee may be

  • (a) employees of the association or of a subsidiary of the association; or

  • (b) officers of the association or of a subsidiary of the association who are involved in the day-to-day operation of the association or subsidiary.

• Marginal note:Duties of conduct review committee

  (3) The conduct review committee of an association shall

  • (a) require the management of the association to establish procedures for complying with Part XII;

  • (b) review those procedures and their effectiveness in ensuring that the association is complying with Part XII; and

  • (c) review the practices of the association to ensure that any transactions with related parties of the association that may have a material effect on the stability or solvency of the association are identified.

• Marginal note:Association report to Superintendent

  (4) An association shall report to the Superintendent on the mandate and responsibilities of the conduct review committee and the procedures referred to in paragraph (3)(a).

• Marginal note:Committee report to directors

  (5) After each meeting of the conduct review committee of an association, the committee shall report to the directors of the association on matters reviewed by the committee.

• Marginal note:Directors report to Superintendent

  (6) Within ninety days after the end of each financial year, the directors of an association shall report to the Superintendent on what the conduct review committee did during the year in carrying out its responsibilities under subsection (3).

Directors and Officers — Authority

Marginal note:Appointment of officers

• 201 (1) The directors of an association may, subject to the by-laws, designate the offices of the association, appoint officers thereto, specify the duties of those officers and delegate to them powers, subject to section 202, to manage the business and affairs of the association.

• Marginal note:Directors as officers

  (2) Subject to section 171, a director of an association may be appointed to any office of the association.

• Marginal note:Two or more offices

  (3) Two or more offices of an association may be held by the same person.

Marginal note:Limits on power to delegate

202 The directors of an association may not delegate any of the following powers, namely, the power to

• (a) submit to the members or shareholders a question or matter requiring their approval;

• (b) admit members;

• (c) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;

• (d) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 71, except in accordance with any authorization made by the directors;

• (e) declare a dividend on membership shares or shares, a payment of a bonus on any deposit or a patronage allocation;

• (f) authorize the redemption or other acquisition by the association pursuant to section 79 of membership shares or shares issued by the association;

• (g) authorize the payment of a commission on a share issue;

• (h) approve a management proxy circular;

• (i) except as provided in this Act, approve the annual statement of the association and any other financial statements issued by the association;

• (j) expel members; or

• (k) adopt or amend by-laws.

Marginal note:Remuneration of directors, officers and employees

• 203 (1) Subject to this section and the by-laws, the directors of an association may fix the remuneration of the directors, officers and employees of the association.

• Marginal note:By-law required

  (2) No remuneration shall be paid to a director as director until a by-law fixing the aggregate of all amounts that may be paid to all directors in respect of directors’ remuneration during a fixed period of time has been confirmed by special resolution of the members.

Marginal note:Validity of acts

• 204 (1) An act of a director or an officer of an association is valid notwithstanding a defect in the director’s qualification or an irregularity in the director’s election or in the appointment of the director or officer.

• Marginal note:Idem

  (2) An act of the board of directors of an association is valid notwithstanding a defect in the composition of the board or an irregularity in the election of the board or in the appointment of a member of the board.

Marginal note:Right to attend meetings

205 A director of an association is entitled to attend and to be heard at every meeting of members or shareholders of the association.

Conflicts of Interest

Marginal note:Disclosure of interest

• 206 (1) A director or officer of an association shall disclose to the association, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the association, whether entered into or proposed, if they

  • (a) are a party to the contract or transaction;

  • (b) are a director or officer of a party, other than a member, to the contract or transaction or a person acting in a similar capacity; or

  • (c) have a material interest in a party to the contract or transaction.

• Marginal note:Time of disclosure — director

  (2) The disclosure shall be made in the case of a director

  • (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;

  • (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;

  • (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or

  • (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.

• Marginal note:Time of disclosure — officer

  (3) The disclosure shall be made in the case of an officer who is not a director

  • (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;

  • (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or

  • (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.

• Marginal note:Time of disclosure — contract not requiring approval

  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the association’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the association, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.

Marginal note:Director to abstain

• 207 (1) A director who is required to make a disclosure under subsection 206(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction

  • (a) relates primarily to their remuneration as a director, officer, employee or agent of the association, an entity controlled by the association or an entity in which the association has a substantial investment;

  • (b) is for indemnity under section 216 or insurance under section 217; or

  • (c) is with an affiliate of the association.

• Marginal note:Ineligibility

  (2) Any director who knowingly contravenes subsection (1) ceases to hold office as director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated or formed by or under an Act of Parliament.

• Marginal note:Validity of acts

  (3) An act of the board of directors of an association or of a committee of the board of directors is not invalid because a person acting as a director had ceased under subsection (2) to hold office as a director.