Board Roles & Responsibilities

A. Role

The board of directors' role is to direct the management of the business and affairs of the credit union to ensure Conexus is managed and operated in a sound and prudent manner, as established in The Credit Union Act, 1998 (The Act) and Standards of Sound Business Practice.

B. General Legal Obligations

The membership of Conexus elects the board to represent their ownership interests.  Directors have a fiduciary duty1 to carry out their duties:

  1. Honestly and in good faith
  2. In the best interests of Conexus
  3. With the care, diligence and skill of a reasonably prudent person

C. Relationship with Management

While The Act assigns responsibility to 'manage the affairs of the credit union' to the board, the board delegates to the Chief Executive Officer (CEO) the responsibility for day-to-day leadership and management of the credit union and its subsidiaries.  The CEO does not have full powers to conduct operations free from any control or supervision by the board.

Management regularly provides appropriate and timely information and reporting to the board to enable it to reach informed conclusions as to the soundness of Conexus' day-to-day management and operations.

The board promotes a collaborative relationship with management and respects the approved organizational structure.  A director has no authority to direct any management or staff member.

D. Governance Responsibilities

The board retains responsibility for managing its own affairs through the Audit & Conduct Review, Governance & Human Resources, and Risk Committees.

The board is ultimately responsible for oversight of management and cannot delegate the following responsibilities:

  1. Organizational Structure and Human Resource Management
    • Review and approve an organizational structure that reflects adequate balance and separation between revenue generating activities and risk management control functions that have appropriate resources, focus and status2.
    • Ensure sound human resource processes for directors, officers and employees that support Conexus in achieving its objectives.
    • Review and approve a compensation philosophy for Conexus that will attract and retain employees.
    • Ensure that plans have been made for CEO and executive management succession. 
  1. Chief Executive Officer
    • Appoint, monitor, set performance objectives, and evaluate the CEO's performance and determine compensation.
    • Provide advice and counsel to assist the CEO in accomplishing strategic goals and objectives.
      Note: The CEO is the only employee solely hired and terminated by the board. 
      The CEO is authorized to hire its executive management team.  
    • The most senior internal audit position disciplinary or firing actions require the Audit
    • Committee's prior approval
    • Corporate Secretary disciplinary or firing actions require the Board of Director's prior approval 
  1. Strategic Direction
    • Annually review with management the corporate mission, values and business objectives, and approve Conexus' comprehensive business strategy and business plan.
    • Safeguard Conexus' resources by reviewing and approving operating plans, capital plans/budgets, and new material strategic proposals.
    • Ensure effective coordination of capital management with strategic management and risk management processes.
    • Actively monitor progress towards the objectives set in the strategic business plan, operating plan, and capital plan/budget, and revise and alter its direction to management in light of changing circumstances.
  1. Board Policies
    • Set board policies for all aspects of operations to provide guidance to management, including defined risk tolerances, accountability and reporting requirements.
    • Actively monitor, through management, compliance with all board policies that govern Conexus' operations.
  1. Business Conduct and Regulatory Compliance
    • Direct management to implement operational systems designed to ensure that Conexus operates at all times in accordance with applicable legislation, standards of sound business practice and board policy, and to the highest ethical standards.
    • Approve and act as the guardian of Conexus' corporate ethical standards by maintaining codes for conduct and market practices that ensures good business practices and fairness to consumers.
    • Actively monitor, through management, compliance with applicable legislation, standards of sound business practice and board policy that govern Conexus' operations.
  1. Risk Management
    • Direct management to implement operational systems designed to ensure that Conexus is controlled and can demonstrate that business risks are identified and managed.
    • Review and approve an enterprise risk management framework3, including overall risk philosophy and risk tolerance levels.
    • Actively monitor, through management, the effectiveness of the risk management approach to control business and operating risks. 
  1. Assurance Reporting
    • Specify the content and frequency of reporting needed from management in order to monitor performance and gain reasonable assurance of organizational control and prudent business conduct. 
    • Annually report to the membership on the board's stewardship for the preceding fiscal year.
    • Set appropriate disclosure requirements to support transparency to members and other stakeholders regarding operations, risks4 and capital adequacy5.
  1. Accountability
    • In performing its functions, the board considers the legitimate interests of stakeholders6 and is accountable to the credit union and its membership.

1Without being legally precise, a fiduciary duty is duty to act for the benefit of another (i.e. the membership)

An effective system of checks and balances provides the necessary independent assurances to the board for it to be confident and demonstrate that it is in control of the credit union.

3 SSBP require an entity-wide framework that supports the proactive identification, assessment and management of significant risks, overall risk aggregation and decision-making.

4 SSBP requires disclosure that allows members and other interested stakeholders to assess key information on the scope of operations, risk exposures and risk management processes.

5SSBP require disclosure to members and other interested stakeholders of the credit union's capital framework, including types of capital, terms and conditions of capital instruments and capital adequacy to support operations, risks and growth.

6 Includes the in-system regulator (CUDGC), employees, the membership, and the communities Conexus serves.