The Building & Loan Association Shareholders Committee will host a member of members of the association on Thursday. (IWN file photo)

A proposal that could see only persons with training in finance becoming board members of the Building & Loan Association (BLA) is expected to generate some discussion at a meeting on Thursday.

The Financial Services Authority (FSA), which has been managing the BLA since February, announced the proposal at a meeting of BLA shareholders last week.

But the BLA Shareholders Committee, which has been partnering with the FSA to restructure the financially troubled building society, is expected to meet with BLA members to discuss the proposal on Thursday.

The Shareholders Committee says that Thursday meeting — at 5 p.m. at Frenches House in Kingstown — “will be to bring to the attention of members for discussion matters pertinent to their membership”.

The committee says the agenda comprises:

1. Update members on new elections procedures proposed by the FSA

2. New Board selection and tenure rules as proposed by FSA

3. The non-payment of interest currently due.

4. Any other business

The committee has been mum about its reaction to the proposed changes to the election procedures.

The saying that speaking about it will pre-empt the position they plan to outline at Thursday’s gathering.

But the proposals generated some discussion at the FSA’s meeting with shareholders last week.

“I have one major, major concern, and that is, my helper at my office, … who has been a member of the association for the past 25 years, cannot be elected to the board of directors. … Why not?” a medical doctor told the head table, which included Leon Snagg, chair of the FSA, Sharda Bollers, executive director of the FSA, and Eleanor Astaphan, deputy executive director of the FSA and acting chief executive officer of the BLA.

“This person is a member of the association for 25 years. Is in good standing, why cannot that person be elected to the board of director? She is not an accountant –” the physician was saying when Bollers told him she did not quite understand.

“Can I remind you why we are here? We are here to decide on and discuss matters pertaining to the survival of the Building & Loan Association. We are here because of issues, essentially, of mismanagement on the part of the Building & Loan Association,” Bollers said as cross talk erupted.

“… what are looking at with respect to board of directors is persons whom we can trust to be able to have a certain background in terms of qualification,” Bollers further said among even more cross talk.

She noted that in the past, the members of the BLA elected the board of director, which in turn appointed a CEO.

“So those functions are very important, obviously,” Bollers said.

“The board of directors, in the past, for example, the member have not been really, for example, responsibly — I have to tell you — ensuring that the board of directors are carrying our their duties.

“The members, for examples, have the opportunity to be present at annual general meetings and make representations. They have the responsibility to elect those directors.

“Now, let me just ask a question. The key decisions to be taken by a board of directors, we are talking about a financial institution with millions and millions of dollars in assets. We are talking about a financial institution, and it’s a non-bank financial institution, which need to be modernised, which needs to be able to handle liquidity issues, solvency issues, recapitalisation; which needs to be able to address internal controls, accounting decisions.

“Now, if you feel comfortable, for instance in putting persons with no financial background, with no accounting background, no legal background or no any sort of business experience, as director… of the Building and Loan Association, then, it is entirely a matter for you,” Bollers said.

But a state-employed economist, speaking after Bollers, said:

“There is a lot of sense made in the point made by [the doctor] because you can’t determine that someone has not financial experience because they have no financial degree.”

8 replies on “Proposed changes to BLA board election rules could generate friction”

  1. Watching Hard says:

    I can’t believe the points being made by the economist and the doctor. Or maybe I’m missing something? I would think that the most objective way of determining if someone has credible financial credentials id looking at their educational qualifications. Is there anything more objective than that? Why the docotor would want to go down that road is mind boggling. do we want BLA to be a business or a mauby shop?

  2. orde ballantyne says:

    the fsa suggestion has merit. In any public organisation election to the office of director must be based on trust,expertise,and management skills. Many times we elect persons based on friendship or who speaks the most or who appears more in the public eye or who we deem as in good standing like persons in the legal feild.
    I differ to the extent of inclusion on such a body. The rule could read at least three out of 7-10 persons should have training in a specified/relevant feild. The CEO should be from an advertised postion.hence he will be one of the experts on the panel. I would not elect my mother because she has been a member for 60 years, I would elect my mother because she can perform as a director.

  3. So the FSA is now proposing that you need “financial training” to prevent mismanagement of this financial institution, the BLA. I read Shardas Bollers’s reported comments and I have to ask whether her memory has failed or did the world not not just have a major financial crisis which was caused by the actions of investment banks and various financial institutions filled with people with “financial training”? Financial training does not prevent mismanagement. Integrity does. And integrity is not limited to, nor even always present, in those who have financial training.

  4. Listening to the Doctor and the economist i would be inclined to take all my money out. My son is 19yrs old have been a shareholder ever since. We should vote for him to be on the board. #just saying

  5. “financial training” alone wouldn’t save an organization.
    How many highly paid persons with the highest levels of “financial training” were employed at Enron, Bear Stearns, Fannie Mae, Countywide ? Education / training without morals, high standards and genuine interest in success is just as useless.

    I think half the board should be selected based on “financial training” and the other half elected by the Shareholders, weighed in such a manner that those with greater shares have a stronger vote.

  6. I don’t follow the FSA argument that financial experience personnel is better qualify to be a board member. The board should not be running the organization. Instead, they board should hire competent managers, with skills needed to run the financial department of the organization, while they act as monitors to see the managers are performing their duties.
    The rules should allow new blood to get on the board, by recycling a number of officers every AGM. No member should be on the board for more than 4 years. He/she should step down for a period – probably one year before he/she is eligible to get back on the board.
    This format will encourage accountability, integrity, and continuity of the workings of the organization. No workers should not be board members. However if members have the necessary skills, then they can apply for the positions.

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