I WOULD like to respond to Pat Synge’s comments, DisConnect, on the proposed change to connectfinancial’s constitution.
The proposed changes unanimously recommended to members by the board are straightforward and aimed at strengthening its mutual status and meeting national governance standards.
Connectfinancial is Tasmania’s largest locally-owned financial institution and it is in everyone’s interest that it meets the highest prudential standards possible, has appropriate expertise on the board and has the flexibility to match or better the services offered by competitors.
We are, after all, managing the savings and financial interests of more than 62,000 Tasmanians and some $800 million of their money — surely this deserves the highest order of prudential governance.
The connectfinancial Board voted unanimously for the proposed changes, which are required to meet Australian Prudential Regulatory Authority (APRA) regulations by October 1, to be put to a Special General Meeting on April 28th.
Far from doing anything by ‘stealth’ all connectfinancial members have now received a package of information relating to the Special General Meeting and the proposed constitutional amendments.
The Board is seeking members’ approval to make amendments to modernise the constitution to:
• more effectively direct the organisation
• satisfy a high level of corporate governance
• raise capital within our mutual structure
• protect the integrity of membership
These changes will make connectfinancial stronger in an increasingly more complex environment, allow us to recruit people with particular expertise to the board and provide access to new sources of capital to meet members’ needs.
The proposal to sell non-voting dividend yielding shares is an opportunity for members to further participate and contribute to their credit union. It will also allow connectfinancial to raise additional money to meet members needs and allow it to continue to grow.
This in no way undermines members’ control over their credit union. Additionally, it helps protect members from local economic fluctuations.
Having the capacity to appoint up to three directors will give the Board access to people with the expertise, skills and experience rquired by modern financial institutions. At least six directors will still be elected by members so they always retain control of the board — representative democracy will be preserved.
Under APRA’s prudential framework, all directors must meet ‘Fit and Proper Persons’ standards and connectfinancial is no exception. It is proposed that in future all candidates for the board be scrutinized by an elegibility and nominations committee.
Most Australian credit unions have alraedy adopted these changes to their constitutions including, for example, Island State, Australian National, Australian Central and Members Education.
The adoption of the proposed changes will keep connectfinancial at the forefront of the Australian credit union industry.
Peter Armstrong
Deputy Chairman, connectfinancial
