A Letter from your Board of Directors
Thank you for registering to join our virtual Annual Meeting of Members (AMM) and Special Meeting of Members (SMM) this Tuesday. We’ve had an amazing response with almost 300 registrations so far. This is the second year we’ve held the AMM virtually, which is proving a very popular format.
As you’ll have already seen, we’re also holding an SMM this year to invite you to vote on some changes to our Rules.
Two Members have challenged our decision to bring most of the proposed changes to the virtual SMM. They want any discussion of these changes deferred until a face-to-face meeting can be held, at some point in the future – post Covid-19. In addition, they claim these changes are undemocratic and are not in line with our Society’s co-operative principles.
We know, in the last year, that all sizes of groups and organisations have successfully held meetings and debates online and, given the large number of Members who have registered, we are confident that Members are happy with the medium and there is no advantage to be gained from deferring until a face-to-face meeting can be convened. A virtual meeting also allows for full participation by both Jersey and Guernsey Members at the same time - a significant step forward in the democratic running of the Society across both islands.
We want to reassure you that the proposed changes are in the best interests of the Society and all our Members. These changes are aligned with our democratic values, and it is important that they should take effect as soon as possible, to ensure regulatory compliance and best practice.
These changes have been considered in great depth, driven by:
- Our co-operative values & principles
- The new Co-operative Corporate Governance Code (the ”Code”)
- Regulatory requirements
These Rule changes have been designed to ensure the Society lives by its co-operative values, principles and the democratic traditions that have served us so well over more than 100 years, whilst preparing us for the future.
The Code was developed by Co-operatives UK in collaboration with the co-operative movement in the UK. The Code is designed to ensure that co-operatives are able to preserve their fine democratic traditions, values & principles for the benefit of all their Members, whilst ensuring that they maintain the standards of Governance rightly required in the 21st century.
As an Industrial & Provident Society our core business is regulated by both the Jersey and Guernsey Financial Services Commissions (JFSC and GFSC), which set high standards in relation to the capacity and capability of the Board, as well as its effectiveness in governing the Society. Compliance with these standards is not negotiable, if we are to trade lawfully, and all the Society’s Directors appointments are now subject to screening by the JFSC and GFSC.
The proposed Rule changes are designed to ensure:
- we meet these requirements
- your Board is equipped to lead a complex business with a turnover of almost £200 million, 129,000 Members and over 1,100 Colleagues
- The Society has the leadership and direction necessary to ensure that it stays strong and profitable in an uncertain and fast-changing future
You can find full details of these changes at www.channelislands.coop/SMM2021 but in brief:
Motion 2: The appointment of a Chair and Vice-Chair instead of just having a President will ensure greater resilience and leadership.
Under our proposals the Chair will normally be an elected Director but, to ensure the most effective leadership, the Board can choose an appointed Director to serve, if necessary because none of the elected Directors want to undertake this onerous task, or in the Board’s own opinion an appointed Director will best serve the Society’s interests. The Chair and Vice-Chair will be re-elected by the Board every year.
We have also proposed that if the Chair is an appointed Director the Vice-Chair must be an elected Director.
This motion will ensure that the Board is Chaired by the most appropriate Board member, to lead the business in the best interests of its Members and will provide continuity.
Motion 3: This change would ensure that no executive Director could ever Chair a Board meeting and removes an unnecessary Rule requiring the Chief Executive Officer to attend Board meetings. This is unnecessary because the Chief Executive Officer is now a Director and has to attend Board meetings anyway.
Motion 4: This change allows for a potential increase in the Board from 9 to 11 members so that the Board could appoint another executive Director, such as the Chief Financial Officer, and also has the power to appoint an additional external Director. It also gives the Board the authority to fill any temporary vacancy that may arise in the absence of candidates that fulfil the Board’s selection criteria.
We would like to emphasise that the majority of the Board (6 of the potential 11 seats) will be elected Directors and that it would be up to the Board to appoint the other 5 Directors based on required skills and experience. All our Directors must be Members.
Motion 5: Under this proposal elected Directors’ terms would be reduced from up to 12 years, subject to re-election, to a maximum of 9 years, subject to re-election every 3 years. This is to ensure fresh thinking and diversity on the Board. We have also proposed that appointed Directors should be subject to the same maximum terms but that their contracts should be reviewed annually.
This change will ensure that the Board has a majority of elected Directors, who can control the selection of executive and appointed Directors from our Member base, on the basis of need.
Motion 6: The proposed change regarding the termination of membership is designed to deal with a specific regulatory challenge and is necessary. It would only be used in the most limited circumstances, normally on the advice of the Society’s Money Laundering Compliance Officer.
Motion 7: These changes are designed to enable the Board to manage the treatment of genuinely dormant accounts ethically and in line with our co-operative values & principles. Any funds from dormant accounts could only be used for good causes in the community, not to fund the business. The closure procedure is very fair and the Board would always refund a Members’ assets on production of proper evidence after closure.
Motion 8: This change is just designed to remove a very outdated provision requiring us to literally display our financial statements at the offices in Don Street. We display our accounts on line and will always provide free printed copies on request.
We encourage you to join the AMM and SMM this Tuesday and assert your democratic rights to vote on the formal matters at the AMM, including this year’s dividend, and to consider these Rule changes, which the Board passionately believes are in Members’ best interests and will allow our Society to trade successfully into the future.
We therefore ask you to:
- vote YES to your Board’s Motions 2-8
- vote NO to Motion 1 proposed by Peter Roffey and June Le Feuvre, which your Board does not support or recommend.
The Board of Directors
Jennifer Carnegie, Carol Champion, Jill Clark, Mark Cox, Michael McNally, John Refault