From next March, many credit union directors around the State who have been in the role since 2014 will no longer be eligible for reappointment. It comes as part of a new time limit on director tenure introduced by the Central Bank.
Credit unions are largely volunteer-driven organisations and there is now some concern that there might not be enough people on the boards of individual credit unions once long-time stalwarts are forced to step down. As a result, the movement is asking members around the State to step up and put themselves forward.
After all, could the movement survive without them?
“They are fundamental. They’re the core,” says David Malone, chief executive of the Irish League of Credit Unions (ILCU).
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Back in March 2014, a new rule, first introduced under the Credit Union and Co-operation with Overseas Regulators Act, 2012, came into play. It limits the amount of time a volunteer can sit on a credit union board as a director to 12 years out of the previous 15 years. So, from this date, the clock has been ticking for directors who were on boards at the time and continue to serve.
“The earliest date on which a person could become ineligible for appointment or election, due to length of continuous service as a credit union director, is March 3rd, 2026,” a spokesman for the Central Bank said.
After that date, the rule will impact any relevant remaining members of credit union boards of directors “on a phased basis”, he says.
While there was “a little bit of resistance” to the new rule amid a fear that skills could be lost, Helen Carbery, chief executive of the Credit Union Development Association (Cuda), accepts “it’s being done for the best reasons”.
But now the clock is ticking and that deadline is coming sharply into view.
Credit union boards need to have a minimum of seven directors – “but you want to run it with more,” says Carbery – and a maximum of 11.
Given the circumstances, credit unions need to find a flow of new volunteers to replenish their boards. They are, after all, an essential part of credit unions.
“They’re the absolute bedrock,” says Malone, adding: “The role of volunteers is fundamental to the role of credit unions.”
It’s something that distinguishes credit unions from other financial institutions, he says, adding that it means that “every decision is made in the best interest of members”.
There are 180 credit unions across the Republic, with some €21 billion in assets, 3.3 million members and about 4,000 professional staff. To keep them running smoothly, about 3,000 volunteers also give their time on a weekly and monthly basis.
A note of caution first around the word “volunteer”.
“They’re not your standard volunteer – they are non-executive directors of regulated financial institutions who are offering to provide professional services pro bono,” says Malone.
Volunteers become directors of the credit union, and may sit on additional bodies such as audit or oversight committees. This means potential directors have to get the green light from the regulator to perform their functions by going through the Central Bank’s fitness and probity regime.
For the sector, such oversight “strengthens confidence in the sector”, says Malone. However, the fact that it’s a regulated entity “could scare some people a bit”, says Carbery.
“It is an onerous role,” agrees Malone, adding that directors have a fiduciary role to protect members’ savings and credit union assets. “They’re key responsibilities, onerous responsibilities,” he says, adding that indemnity insurance is in place. “Every credit union director takes it so seriously.”
Credit union boards are required to meet six times a year, although there are additional committees, which may meet more often. So the time commitment can vary.
“It can range from five to 10 hours a month, depending on your role. If you’re chairing a board, it will take more time,” says Malone.
It is a two-way vetting process. “They need to think you’re good enough and you need to be happy with them,” says Carbery.
She suggests that if it is something you are considering, you should have a clear understanding of your duties and responsibilities; understand the financial position of the credit union; and look for a strong governance framework with induction and continuing training supports for directors, and a strong executive team.
But what makes a good volunteer?
“People who want to give back to their community and see this as a path to use their skills,” says Carbery. “You’ve got to believe in the movement, that it does make a difference.”
Carbery understands this motivation as she is a volunteer herself. Before taking up her current role in Cuda last November, she was already on the board of YMCA, a community-based charity dedicated to supporting young people, individuals and families.
Getting a mix on a board is important. “You don’t want too many financiers on the board. You do need a balance,” says Carbery, adding that credit union boards across the State will be made up of teachers, gardaí and people from “all types of backgrounds”.
“I think around the country, when I visit credit unions, there is a great balance on our boards, between those who have the relevant skill sets and those who have the community focus as well,” says Malone.
While it comes with responsibilities, volunteering can also be a “huge opportunity” in terms of getting experience and growing your professional skill set.
The experience can be “very beneficial” for the individual in their day job, says Carbery.
“The biggest perk isn’t financial, it is the satisfaction of knowing you’re making a real difference to your community,” says Malone, adding that, for younger people joining, it can give valuable corporate governance experience.
“You’re driving the strategy of the credit union,” adds Carbery. “It should be an exciting journey for someone to be part of. It’s quite impactful.”
Remember, volunteering with your credit union is just that: giving up your time for free. There is no remuneration. But should they be paid?
“It has been discussed before,” says Malone, adding that “the majority feel it shouldn’t be the case” due to the ethos of the movement. However, he concedes that it is something that will probably be looked at in the future again some time.
“It’s a bit like paying GAA players,” says Carbery. “It’s about the ethos of the movement and people working together to make it better for each other. I think you’d lose that [if volunteers were paid],”
Could the movement afford to pay people?
“Yes,” says Carbery, but the higher costs would mean higher rates on loans.
“Would it make the offering competitive? Perhaps not,” she says, adding that it should be more about offering supports for volunteers to help them to do their job.
For now, credit unions do invest in training and development for their volunteers. Volunteers receive induction training, while some credit unions offer new volunteers the chance to shadow existing directors, in a role known as an associate director, so they can learn the role before assuming the responsibilities.
And training is not just at the start. As Carbery notes, an issue now hitting credit unions is with respect to longer-term lending, and the move into mortgages. This means that balance sheet management is becoming a big issue, so Cuda is running training for boards on balance sheet management in the evenings.
And if you want to become a volunteer?
“Talk to your local credit union – they’d be delighted to hear from you,” says Malone.
‘It’s a massively rewarding thing to do’
Colin Hernon was just 24 when he became a volunteer at Community Credit Union in west Dublin back in 2016. One of the youngest volunteers, he had no background in the credit union movement – and didn’t even have an account.
Working with Irish Rail as a business analyst, he was interested in the community aspect of the movement.
“I wanted to give back – but I didn’t quite know what shape or form that might look like,” he says.
He started on the oversight committee, moving on to chair it in 2020 for about three years. This required being vetted through the Central Bank’s fitness and probity regime.
The process didn’t take long, “but it is a dive into your personal situation”, notes Hernon.
For Hernon, a big plus of his time on the board has been its impact on his day-to-day career.
“It exposes you to an experience at board level,” he says, and shows you how a business should work. “That experience is invaluable, and has to pay dividends [in your career] at some point,” he says. “”
Is it time-consuming?
This can depend on the role, says Hernon, adding that when he was chairing a committee, “you are nearly always ‘on’”.
One of the highlights of his tenure as a volunteer non-exec director has been the recent merger with Blanchardstown & District Credit Union to create a credit union with assets of more than €280 million and more than 70,000 members.
Navigating Covid-19 as chairman of the board was also a big challenge and achievement, bringing what was a “fairly analogue” business to digital almost overnight. “It was a true test of business continuity planning,” he says.
But could there be scope to change the role of the volunteer?
Community Credit Union is well subscribed at the moment, in terms of its volunteers, but it can be an issue at a wider level.
“One of the biggest challenges we face is trying to attract people,” says Hernon, adding that, despite the level of involvement and responsibility in the role, it is unpaid, although training and investment in upskilling is available.
Hernon, for example, recently completed a chartered director programme.
But, with no pay on offer, it can make it more difficult when you’re looking for people with relevant professional experience and the capacity to give back.
“I think long term it’ll have to be considered,” says Hernon, adding that otherwise the lack of pay might be hard to justify given the time involved and the responsibility assumed by volunteers. “But it’s never going to match the responsibility and nor should it.”
Overall, his experience has been “massively rewarding”.
“Ultimately, I want to leave the credit union in a better place than I found it,” he says.
