Most Credit Unions would have had their Annual General Meeting with their members and it is at this meeting that a resolution is presented to the members for the dividend percentage to be paid out to members. Example of the resolution: Be it resolved that in accordance with Bye-Law (x) Section (y), (check the number and Section in your credit union bye laws) a dividend of X% be paid on fully paid up shares at the end of the financial year ended (month & year) and that such dividends be credited to members’ shares.
It is strongly recommended that members of a Credit Union pay attention the words “credited to members’ shares”. A question needs to be asked of the person proposing as to what does the above statement mean as the statement does not indicate how the dividends will be paid out to members.
Placing on shares is not the same as placing is a deposit account which the member can access at any time.
Some examples of resolutions are:
• BE IT RESOLVED THAT: “A dividend of x % of which y% be paid in cash, z% be retained in shares.”
• BE IT RESOLVED THAT: “A dividend payment of x% on fully paid up shares. Recommended that the dividend payment be deposited to members’ deposit accounts after all outstanding arrears are satisfied.”
• BE IT RESOLVED THAT: ”A dividend of x% on the average monthly share balance held by each member for the year ended (month & year) be declared for the year ended (month & year) and that the proceeds of this dividend distribution be credited to the Share Savings and Savings Deposit Accounts of each member.”
A person joins a Credit Union for the purpose of saving money with the intention of getting dividends and applying for loans. Therefore, it is important to understand that when a resolution is proposed by the Board of Directors, that you as the member, stand up and ask for clarification of how the dividends will be paid out, if it is not clearly stated and not just accept the resolution being presented for approval.
How many of us, when we get a policy or bye laws document just throw it in a corner? I asked a friend of mine the other day, if she had read the bye laws of the credit union that she was a member of. Her response was – I have not read it. I advised her to go dig out the bye laws and read it before going to the next annual general meeting.
For members (especially those who are new) who have been elected to the Board, Credit and Supervisory Committees, it is recommended that you get your Credit Union to arrange free training on the role and responsibilities of the Supervisory and Credit Committees and the Board, from the Ministry of Labour, and Small Enterprise Development, Co-operative Development Division and get a copy of the Co-Operative Societies Act Chapter 81:03. Guidance on how Credit Unions are to operate but most important there are guidelines as follows:
• Powers and duties of the Board
• Meetings of the Board
• Failure to attend Board Meeting
• Vacancy on Board
• The annual election by members of the credit and supervisory committees
As a member of the above bodies, it is important that you have a voice. As an elected member, the membership is relying on you to make the decisions that will keep their hard earned savings safe.
I remember, at a Board Meeting of an organization, that I attended – as I walked in and sat down, the Chairman said – we all agree to do x y and z. Stunned, I turned to the Chairman and said – I am sorry, I have not agreed to anything as I don’t have a clue what you are talking about. There is a tendency to rush through decisions at Board Meetings without following the process. Lessons to be learnt.