Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

The amendment sets out new provisions concerning the suspension and removal of directors by the board oversight committee. Issues arose in the Dáil on the procedure for the suspension and removal of directors, in particular in terms of the director concerned being provided with written notification of the board oversight committee?s reasons for taking action under the section.

The Minister, on Committee and Report Stages in Dáil Éireann, and when the issue was raised on Second Stage in the Seanad, indicated his willingness to re-examine the provisions. This amendment reflects the changes necessary to address the concerns raised in both Houses. It brings the procedure for removing a director at a special general meeting convened under this section into line with the procedure for the removal of a director from office by members of a credit union, as set out in section 56 of the 1997 Act, thereby ensuring greater procedural consistency. Under this section, the board oversight committee can suspend a director where it considers that a member has taken any action or decision which is not in accordance with Part IV of the 1997 Act. The board oversight committee is required to provide written notice to the director, setting out the reasons for its decision before either suspending the director or convening a special general meeting of the credit union to consider whether to remove the director.

Where a director is suspended by the board oversight committee under this section, the suspension takes effect immediately and if the director in question has not resigned within seven days of being suspended, the committee shall convene a special general meeting to review the suspension and consider whether to remove the director. At a special general meeting convened in accordance with this section, the members may ratify or rescind the suspension or remove the director from office. This amendment provides, in a similar manner to section 56 of the 1997 legislation, that a director is entitled to written notice of a special general meeting to be held under this section not less than 21 days in advance of the meeting. The amendment also sets out the procedure for the director in question to make written representations in advance of a special general meeting and that the director has the right to be heard orally at such a meeting.

The Minister is confident that the amendment addresses the concerns raised by Members of both Houses on Second Stage. A further amendment will be tabled on Report Stage to clarify that if the director resigns, the special general meeting must be held within seven days after the 21 day period of notice to be given to members. Under the current wording, the special general meeting must be held within seven days of the decision, even though notification of the meeting must be given at least 21 days in advance.

On the key issue of the suspension or removal of the board oversight committee, the Minister has attempted to create a degree of consistency with section 56 of the original 1997 Act to provide certainty and clarity on the rights of individuals. Where the oversight committee takes this action, written notice will be given and the person in question will have a right to reply. Further, within a timeframe set out in the amendment, a special general meeting will be held at which various options placed before members.