Never heard of an installation ceremony for a credit union

Mar 05, 2024 Features / Columnists, Peeping Tom

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Kaieteur News – I do confess to never having heard of an installation or swearing-in ceremony for the members of the executive of a credit union. If such a practice exists anywhere in the world, it would be outside of the normal.

Credit unions are private financial institutions and their governance typically involves the election or appointment of board members or executives and officers by the credit union’s members or by a governing body established according to the credit union’s bylaws. While there may not be a formal swearing-in ceremony, elected or appointed officials of credit unions are usually required to take on fiduciary responsibilities and adhere to certain ethical standards outlined by the credit union’s rules. But it would be quite unusual for the elected management or executive committee to subscribe to an oath before taking office.

Credit unions are typically formed and owned by individuals who share a common bond, such as belonging to the same sector, working for the same employer, or belonging to the same organization or association. Members pool their deposits to provide loans and other financial services to one another at competitive rates. Unlike banks, which are owned by shareholders and operate for profit, credit unions are usually owned and controlled by their members, who elect a volunteer board of persons to oversee the institution’s operations. Credit unions therefore, can have thousands of members and this, as we are now seeing, can present problems in obtaining a quorum for special or annual members meetings.

There has been a report in the media which suggests that the Guyana Public Service Credit Union has about 25,000 members and that for a general or special members’ meeting a quorum of one-quarter of these members are required. This for all intents and purposes is impractical. It would be impossible to assemble some 6,000 persons for a meeting, even with the use of technology. Special or annual general members meetings are supposed to be held in-person because the intent is not only attendance but also to allow for participation. How do you facilitate a meeting with 6,000 persons when the meeting is being held in a place which can hold only a few hundred? Even with online attendance, it does present logistical challenges.

Assuming a credit union grows to encompass 25,000 members, assembling such a large number for a meeting presents logistical challenges including space constraints and the ability for all members to effectively engage and participate diminishes. If indeed there is a quorum rule (for members’ meetings) of a quarter of members, it is more than likely that this rule was set when the membership was a few hundred. This rule may no longer be feasible or relevant with tens of thousands of members. The legality of any such special or annual general meetings would thus have to rest on the doctrine of necessity.

This doctrine of necessity allows for actions to be taken that would otherwise be illegal or impractical under normal circumstances when necessary to prevent greater harm or ensure the functioning of an organization. In the context of a credit union or any organization with quorum requirements, if it is genuinely impossible to gather the full quorum due to factors beyond reasonable, the doctrine of necessity may justify proceeding with the election to avoid a situation where the organization is left without leadership or decision-making capabilities. However, this justification typically requires clear evidence of the impossibility to convene a full quorum. To manage quorum requirements effectively in a credit union with a large membership like 25,000, one approach is to implement a representative system. Instead of requiring a fixed percentage of total membership to be present at meetings to establish a quorum, the credit union could establish a representative assembly composed of delegates elected by the membership.

Each delegate would represent a certain number of members. Such a system will ensure a manageable number of representatives can convene to establish quorum while still representing the interests of the entire membership base. This system not only streamlines the quorum process but also encourages greater engagement and representation among members. These members will have the opportunity to elect individuals who best reflect their interests and concerns

In the interest of advancing the work of the Guyana Public Service Credit Union, it is now critical that the newly elected executive be permitted to proceed with their duties, including the revision of rules pertaining to quorum requirements and ensuring the best interests of the union’s members. A protracted legal battle will have implications for public and membership confidence in the credit union.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• appointment, ceremony, Credit Union, members, Peeping Tom

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