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.”