We have recently assisted a credit union where a PCF was unable to continue in their role and was seeking assistance with the appropriate steps to follow. We thought it might be helpful to share some information on it with you. In this regard kindly see attached templates and info below on F&P. Please revert if needed at all.
Please click on these links to find the:
These two documents were already on CUSP and I am recirculating them to you in word format as they may be something you wish to consider, in particular, in a scenario where the CEO or member of the Management Team is required to take sick leave and/or is unable to carry out some or all of their functions for a temporary period of time.
Succession Plan for the Management Team
The first Column – Interim/Temporary Solution, may be useful in putting a structure in place to help alleviate this concern. You may wish to insert the names of replacement staff should a member of the Management Team, including yourself, become incapacitated for a period of time.
Fitness and Probity
- Regulation 10 of Central Bank Reform Act (Sections 20 and 22 Credit Unions) Regulations 2013 provides that a temporary officer:
“shall not be taken to be responsible for the performance of a pre-approval controlled function solely as a result of that temporary officer being responsible for the performance of such function on a temporary basis pending the credit union appointing a person to perform such pre-approval controlled function, provided such temporary officer performs such function under an arrangement agreed in writing with the Central Bank in advance of the person in question assuming such responsibility as a temporary officer”.
- The F&P Guidance (June 2018) provides that the Central Bank expects that Regulation 10 will only be used in the most exceptional of circumstances. The Guidance state that the Central Bank does not envisage that this Regulation would be invoked for circumstances which can, in the normal course, be planned for, e.g. maternity cover, cover for career breaks, etc.
- I would be of the view that the current situation amounts to “exceptional circumstances”.
- You should remember to notify the Central Bank in writing if a temporary officer is taking on a PCF role – notification in this regard should be to the member of the supervisory team assigned to your credit union in the first instance.
- Of course, something could happen so quickly in this current climate, that does not afford you the time to notify the CBI in advance and obtain written approval. Hopefully, pragmatism on the part of the CBI will be applied.
- If the function enables the person to exercise a significant influence on the conduct of the affairs of the credit union, even for a relatively short period, the Central Bank will require the credit union to progress with the full PCF application process.
- I would be inclined to consider this requirement on a case by case basis, for example, the CEO may still be in a position to provide some level of oversight and influence, albeit incapacitated and on a remote basis.
- Please note however, that all positions within the Management Team are subject to Fitness and Probity requirements. You will still have to be able to demonstrate that the person stepping in to the role meets the F&P Standards i.e. a person must (a) be competent and capable; (b) act honestly, ethically and with integrity; and (c) be financially sound.
- You may find it beneficial to address this issue (i.e. of meeting appropriate standards) now by pre-populating each role with key competencies and matching them to the appropriate member of staff.
Please revert is you have any follow up questions on this.
Emergency Succession Plan for the Board of Directors & BoC
- Also, for your convenience, you may click on this link to download an Emergency Succession Plan for the Board of Directors & BOC which is an extract from the CUDA Succession Policy and Framework document.
Kind regards for now, Elaine