Cooperative Credit Associations Act (S.C. 1991, c. 48)

Qualification and Number — Directors

Marginal note:Minimum number of directors

• 169 (1) An association shall have at least seven directors.

• Marginal note:Residency requirement

  (2) The majority of the directors of an association must be, at the time of each director’s election or appointment, resident Canadians.

Marginal note:Disqualified persons

170 The following persons are disqualified from being directors of an association:

• (a) a person who is less than eighteen years of age;

• (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere;

• (c) a person who has the status of a bankrupt;

• (d) a person who is not a natural person;

• (e) and (f) [Repealed, 1994, c. 47, s. 51]

• (g) a minister of Her Majesty in right of Canada or in right of a province; and

• (h) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof.

Marginal note:Limit on directors

171 No more than 15 per cent of the directors of an association may, at each director’s election or appointment, be employees of the association or a subsidiary of the association.

Election and Tenure — Directors

Marginal note:Number of directors

• 172 (1) Subject to subsection 169(1), the members of an association shall, by by-law, determine the number of directors or the minimum and maximum number of directors.

• Marginal note:Content of by-law

  (2) A by-law made pursuant to subsection (1) shall set out the manner in which directors are nominated, appointed or elected, but no by-law that decreases the number of directors shortens the term of an incumbent director.

• Marginal note:Election at annual meeting

  (3) A by-law made pursuant to subsection (1) that provides for a minimum and maximum number of directors may provide that the number of directors to be appointed or elected at any annual meeting be such number as is fixed by the directors prior to the annual meeting.

Marginal note:Election or appointment as director

172.1 The election or appointment of a person as a director is subject to the following:

• (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

• (b) the person was not present at the meeting when the election or appointment took place but

  • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

  • (ii) acted as a director after the election or appointment.

Marginal note:Voting by shareholders

173 Where shareholders of an association are entitled to elect one or more directors of an association, no more than one third of the directors may be elected by the shareholders.

Marginal note:Term of directors

• 174 (1) An association may, by by-law, provide that the directors be appointed or elected for terms of one, two or three years.

• Marginal note:Term of one, two or three years

  (2) A director appointed or elected for a term of one, two or three years holds office until the close of the first, second or third annual meeting following the appointment or election of the director.

• Marginal note:No stated term

  (3) A director who is not appointed or elected for an expressly stated term of office ceases to hold office at the close of the next annual meeting following the appointment or election of the director.

• Marginal note:Tenure of office

  (4) It is not necessary that all directors appointed or elected at a meeting hold office for the same term.

• Marginal note:Idem

  (5) If a by-law of an association provides that the directors be appointed or elected for a term of two or three years, it may also provide that the term of office of each director be for the whole of that term, or that, as nearly as may be, one half of the directors retire each year if the term is two years, and that one third of the directors retire each year if the term is three years.

• Marginal note:Composition requirements

  (6) Where a director of an association is appointed or elected for a term of more than one year, the association shall comply with subsection 169(2) and section 171 at each annual meeting during the director’s term of office as if that director were appointed or elected on that date.

Marginal note:Determining election of directors

• 175 (1) The persons, to the number authorized to be elected, who receive the greatest number of votes at an election of directors of an association shall be directors thereof.

• Marginal note:Idem

  (2) If, at any election of directors referred to in subsection (1), two or more persons receive an equal number of votes and there are not sufficient vacancies remaining to enable all the persons receiving an equal number of votes to be elected, the directors who receive a greater number of votes or the majority of them shall, in order to complete the full number of directors to be elected, determine which of the persons so receiving an equal number of votes are to be elected.

Marginal note:Re-appointment or re-election of directors

176 A director who has completed a term of office is, if otherwise qualified, eligible for re-appointment or re-election.

Director Vacancies

Marginal note:Void election or appointment

• 177 (1) If, immediately after the time of any purported election or appointment of directors, the board of directors would fail to comply with subsection 169(2) or section 171, the purported election or appointment of all persons purported to be elected or appointed at that time is void unless the directors, within forty-five days after the discovery of the non-compliance, develop a plan, approved by the Superintendent, to rectify the non-compliance.

• Marginal note:Failure to appoint or elect minimum

  (2) Where, at the close of a meeting of members or shareholders of an association, the members or shareholders have failed to appoint or elect the number or minimum number of directors required by this Act or the by-laws of the association, the purported appointment or election of directors at the meeting

  • (a) is valid if the directors purported to be appointed or elected and those incumbent directors, if any, whose terms did not expire at the close of the meeting, together constitute a quorum; or

  • (b) is void if the directors purported to be appointed or elected and those incumbent directors, if any, whose terms did not expire at the close of the meeting, together do not constitute a quorum.

Marginal note:Directors where appointment or elections incomplete or void

• 178 (1) Notwithstanding subsections 174(2) and (3) and paragraph 179(1)(a), if section 177 applies at the close of any meeting of members or shareholders of an association, the board of directors shall, until such time as their successors are appointed or elected, consist solely of

  • (a) where paragraph 177(2)(a) applies, the directors referred to in that paragraph; or

  • (b) where subsection 177(1) or paragraph 177(2)(b) applies, those persons who were the incumbent directors immediately before the meeting.

• Marginal note:Where there is no approved rectification plan

  (1.1) Notwithstanding subsections 174(2) and (3) and paragraph 179(1)(a), where a plan to rectify the non-compliance referred to in subsection 177(1) has not been approved by the Superintendent by the end of the forty-five day period referred to in that subsection, the board of directors shall, until their successors are elected or appointed, consist solely of the persons who were the incumbent directors immediately before the meeting at which the purported election or appointment referred to in that subsection occurred.

• Marginal note:Directors to call meeting

  (2) Where subsection (1) or (1.1) applies, the board of directors referred to in that subsection shall without delay call a special meeting of members or shareholders to fill the vacancies, where paragraph 177(2)(a) applies, or elect a new board of directors, where subsection 177(1) or paragraph 177(2)(b) applies.

• Marginal note:Calling meeting

  (3) Where the directors fail to call a special meeting required by subsection (2), the meeting may be called by any person entitled to vote at that meeting.

Marginal note:Ceasing to hold office

• 179 (1) A director ceases to hold office

  • (a) at the close of the annual meeting at which the director’s term of office expires;

  • (b) when the director dies or resigns;

  • (c) when the director becomes disqualified under section 170 or ineligible to hold office pursuant to subsection 207(2);

  • (d) when the director is removed under section 180; or

  • (e) when the director is removed from office under section 441.2.

• Marginal note:Date of resignation

  (2) The resignation of a director of an association becomes effective at the time a written resignation is sent to the association by the director or at the time specified in the resignation, whichever is later.

Marginal note:Removal of director

• 180 (1) Subject to subsections (2) and (3), the members of an association may, by special resolution at a special meeting of members, remove any or all directors from office.

• Marginal note:Exception

  (2) Where members of an association have the exclusive right to appoint or elect one or more directors, a director so appointed or elected may be removed only by those members.

• Marginal note:Idem

  (3) Where the holders of any class or series of shares of an association have the exclusive right to elect one or more directors, a director so elected may be removed only by a special resolution at a meeting of the shareholders of that class or series.

• Marginal note:Vacancy by removal

  (4) A vacancy created by the removal of a director may be filled at the meeting of the members or shareholders at which the director is removed.

Marginal note:Statement of director

• 181 (1) A director who

  • (a) resigns,

  • (b) receives a notice or otherwise learns of a meeting called for the purpose of removing the director from office, or

  • (c) receives a notice or otherwise learns of a meeting of directors, members or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire,

  is entitled to submit to the association a written statement giving the reasons for the resignation or the reasons why the director opposes any proposed action or resolution.

• Marginal note:Statement re disagreement

  (2) Where a director resigns as a result of a disagreement with the other directors or the officers of an association, the director shall submit to the association and the Superintendent a written statement setting out the nature of the disagreement.

Marginal note:Circulation of statement

• 182 (1) Forthwith on receipt of a director’s statement referred to in subsection 181(1) relating to a matter referred to in paragraph 181(1)(b) or (c), or a director’s statement referred to in subsection 181(2), an association shall send a copy thereof to the Superintendent, to each member and, if the director was elected by the holders of shares of a class, to those shareholders.

• Marginal note:Exception

  (2) An association is not required to comply with subsection (1) in respect of shareholders if the statement is included in or attached to a management proxy circular required by paragraph 166.05(1)(a).

• Marginal note:Immunity for statement

  (3) No association or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (1).