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

To respond to amendments Nos. 5 and 6 in the name of Senator Reilly, one of the core purposes of the Bill, as expressed in its Long Title, is to "change the governance requirements for credit unions by removing certain management functions from boards of directors of credit unions and providing for a separate management structure and to improve the oversight and general policy functions of such boards of directors". The core change at the centre of the governance provision in the Bill is to separate the role of the board in overseeing the credit unions' operations from day-to-day operations. These exclusions are designed to ensure people are not overseeing their own work and are not answerable to themselves. For this reason and given the core function of the board in overseeing the work of voluntary assistants, volunteers of credit unions cannot also be a director. However, there is no difficulty with volunteers becoming members of boards provided they do not remain in their role as a voluntary assistant at the same time. The Government has brought forward amendments to allow a volunteer from another credit union or family member of a volunteer to sit on the board.

Amendment No. 6 seeks to delete the second two lines of subsection (10)(a) to provide that the employee of one credit union may be on the board of another credit union. The Minister addressed this suggestion on Committee Stage in the Dáil. The Government has already shown considerable flexibility in accepting amendments on board membership where to do so would not compromise the principles of the Bill.

In respect of employees of other credit unions, credit union members must have confidence that board members are free not only from conflicts of duty but also conflicts of loyalty. A director who is making decisions about business strategy or a possible amalgamation may find it difficult to maintain sufficient objectivity where the decision may also affect the neighbouring credit union at which he or she also works.

To address Senator Darragh O'Brien's point, the recommendations the Government is following are those made in the report of the Commission on Credit Unions and we are being honest to the recommendations. A potential conflict arises where a person is employed and serving on another board. The Senator asked about a person who had previously worked in this area. This scenario does not present a difficulty because the provision would not apply to such a person on the basis that he or she is not in his or her current employment. As such, the issue the Senator raises does not create a difficulty because the person is not currently employed in the relevant area.

As far as the Government is concerned, we are being loyal to and consistent with the recommendations of the commission's report, while showing a degree of flexibility towards the amendments Senators tabled yesterday.