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

Act current to 2019-06-20 and last amended on 2019-06-17. Previous Versions

PART VIICorporate Governance (continued)

Directors and Officers (continued)

Directors and Officers — Authority (continued)

Marginal note:Limits on power to delegate

 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.

  • 1991, c. 48, s. 202
  • 1997, c. 15, s. 128
  • 2005, c. 54, s. 175

Marginal note:Remuneration of directors, officers and employees

  •  (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.

  • 1991, c. 48, s. 203
  • 1994, c. 26, s. 26

Marginal note:Validity of acts

  •  (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

 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

  •  (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.

  • 1991, c. 48, s. 206
  • 2005, c. 54, s. 176

Marginal note:Director to abstain

  •  (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.

  • 1991, c. 48, s. 207
  • 1997, c. 15, s. 129
  • 2005, c. 54, s. 177

Marginal note:General notice

  •  (1) For the purposes of subsection 206(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

    • (a) the director or officer is a director or officer of a party referred to in paragraph 206(1)(b) or (c) or a person acting in a similar capacity;

    • (b) the director or officer has a material interest in the party; or

    • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

  • Marginal note:Access to disclosures

    (2) The members or shareholders of the association may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 206(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the association.

  • 1991, c. 48, s. 208
  • 2005, c. 54, s. 178

Marginal note:Avoidance standards

  •  (1) A contract or transaction for which disclosure is required under subsection 206(1) is not invalid and a director or officer is not accountable to the association or its members or shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

    • (a) the director or officer disclosed their interest in accordance with section 206 and subsection 208(1);

    • (b) the directors approved the contract or transaction; and

    • (c) the contract or transaction was reasonable and fair to the association at the time that it was approved.

  • Marginal note:Confirmation by members

    (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the association or its members or shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

    • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of members;

    • (b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

    • (c) the contract or transaction was reasonable and fair to the association at the time that it was approved or confirmed.

  • 1991, c. 48, s. 209
  • 2005, c. 54, s. 178
 
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