As with most organisations, the principles of good governance and accountability play an increasingly important role in underpinning the credibility and transparency of credit unions.
"The management and governance of credit unions is focused on ensuring that the social and finance principles of the credit union movement are met - members being treated with dignity, fairness, honesty, transparency, and funds being managed with prudence so that the outcome for the member is always 'value for money'," says Liam O'Dwyer of the Irish League of Credit Unions (ILCU).
The governance of each credit union is in the hands of its members, who democratically elect a governing board of directors, explains Mr O'Dwyer.
This board is supervised by an elected supervisory committee, and its accounts are audited annually by an independent auditor.
The performance of the credit union's finances is examined by the monitoring staff of the ILCU on a quarterly basis. Mr O'Dwyer says that the ILCU's monitoring team operates a performance audit system to ensure certain "key stability ratios" are met.
In addition, credit unions are regulated by the Irish Financial Services Regulatory Authority through the Registrar of Credit Unions Brendan Logue. The registrar has the power to regulate and supervise credit unions in order to protect members' funds and maintain the financial stability and wellbeing of credit unions in general.
The €100 million savings protection scheme (SPS) provides an additional level of protection. The scheme can be used to assist credit unions, protect members' savings, encourage best practice and contribute to the overall stability of credit unions.
Under a new ILCU strategy, the SPS system will be significantly enhanced, it says. The ILCU will discuss this revision with the financial regulator, the Department of Finance and the regulatory authorities in Northern Ireland.
"This multi-layered approach to governance and risk management has been enormously successful for the Irish credit union movement in ensuring that risk is managed locally and nationally, internally and externally," says Mr O'Dwyer.
