Beneplan Employee Benefits Co-operative Inc.

Proposed changes to the Co-operative’s By-laws

A number of by-law changes have been recommended by the Co-operative’s Governance Committee. The proposed changes have been reviewed by the Board of Directors and it is the position of the Board the proposed changes be presented to the Membership. The Membership is being asked to approve these by-law changes to ensure the Co-operative is in compliance with its legislative requirements and to improve the effectiveness and efficiency of the Board and its Committees.

Following are details of the suggested by-law changes.

A vote will occur at the end of the Special Meeting to accept the proposed by-law changes.

By-law number, existing wording and proposed wording are listed for each proposed change.

Bylaw (1) Membership

b) “To become a Member, an employer must submit an application for membership to the Co-operative Executive Officer who will submit all eligible applications to the Executive Committee of the Board of Directors on behalf of the Board of Directors (“the Committee”). No employer shall become a Member until the employer’s application for membership has been approved by the Committee.”

The Governance Committee recommends this clause be removed and replace with, “Membership applications shall be approved as per Board policy”

Comment - The Governance Committee believes applications should be vetted in accordance with guidelines approved by the Board. These guidelines will be included in our Board Policy booklet. In addition, we will ask our auditors to sample a few new members’ application to ensure the policy is being followed.

Bylaw (3) Board of Directors

a) “The Business of the Co-operative shall be managed by the Board, who may pay from its funds the expenses of the Co-operative and may exercise all its powers, subject to the Act and these By-Laws”

The Governance Committee proposes to change the word ‘managed’ with ‘overseen’ as Beneplan Inc. has been commissioned to ensure management of the Cooperative not the Board.

Comment – This is a housekeeping edit

Bylaw 3 – Board Compensation

d) “Directors shall serve without compensation, but are entitled to receive any expenses they incur on behalf of the Co-operative, as approved by the Board of Directors”

The Governance Committee proposes that the Board and Committee members be compensated for their duties and proposes the follow by-law change: “Directors and Committee members shall be compensated for their duties per Board Policy subject to an annual maximum per board member.”

Comment – To ensure the Co-operative attracts and retains qualified members to sit on its Board and Committees, the Governance committee is recommending Board and Committee members be compensated for the duties they perform. Board and Committee members are compensated on most other Boards for the time they spend preparing and attending meetings. These individuals are responsible for developing and implementing the Co-operative’s strategic plan to ensure the continued growth and success of the Co-operative.

Bylaw 3 – Term

g) “The length of the term for any Directors, notwithstanding the special conditions surrounding the first Annual General Meeting (AGM) (subparagraph f)), shall be three years (3). A Directors term may be renewed by a vote of the Members but not consecutively.”

The Committee recommends this clause to be changed to…. “shall be three (3) terms of three (3) years. A Director’s term shall be renewed by a vote at the AGM after each term of three (3) years. Directors may stand for additional terms following a waiting period of at least one three (3) year term.”

Comment – The Governance Committee believes the learning curve for new Board and Committee members is such that only in their second or third year do they start to add value to the strategic initiatives of the Co-operative. Allowing members to stay as Board/Committee members for a longer period of time will improve the Board’s decision making.

Bylaw 3 - Nomination

l) “Candidates for election to the Board shall be nominated by a nominating committee appointed by the Board at least thirty (30) days prior to the AGM. Candidates may also nominate themselves or other members by sending a nomination sheet and resume to the Executive Officer at least 30 days before the AGM.”

The Governance Committee recommends the following procedure to elect Board members; “Candidates wishing to stand for election to the Board shall complete a nomination application as established by the Nominating Committee within the timeframes provided.

Comment – This change will ensure a pool of qualified candidates and candidates that are eager to move the Co-operative’s strategic initiatives forward.

Bylaw 3 - Nomination

r) “The Directors will establish the flowing two (2) Standing Committees of the Board:

i) Executive Committee: shall consist of the Chair, Vice‐Chair and one other Director elected by the Board. The Executive Committee shall act on behalf of the full Board between Board meetings; shall in consultation with the Executive Officer(EO) of the Co‐operative, approve new applicants, decide on the Agenda for Board meetings; act as a liaison between the Board and the EO, including the making of recommendations to the Board re. EO objectives, evaluation and compensation; receive submissions and resolutions from Members of the Cooperative and make recommendations to the Board as to their status.

ii) Audit and finance Committee: shall consist of three (3) Directors elected by the Board. The Audit and Finance Committee shall be responsible for overseeing the work of the auditor as well as other financial matters of the Co‐operative; receive, review and recommend the approval of the annual auditor’s report and the EO’s annual report; review the reserve and refund calculation and make appropriate recommendations to the Board.”

Given the dynamic nature of the Board and its activities, the Governance Committee recommends the entire clause be removed and replaced by, “The Directors will establish Standing Committees of the Board in accordance with Board policy.”

Comment - This change will allow the Board to establish permanent and non-permanent/special committees as necessary as well as defining the number of members needed for each committee.

Bylaw 4 - Officers

a) “Officers are elected by the Board of Directors from within the ranks of the Directors.

b) Term of Officers is one year and is renewable.

c) Officer positions include the following:

i) Chair/President

(1) Presides at Board Meetings and General Meetings of the Co‐operative.

ii) Vice Chair

(1) Exercises the powers of the Chair/President in the absence

of the Chair/President.

iii) Secretary

(1) Maintains an up to date Registry of Members;

(2) Provides a Membership Directory to all Members;

(3) Ensures all Filings are up to date with the Financial Services Commission of Ontario;

(4) Advises Directors and Members of future meetings;

(5) Maintains minutes of all Meetings of the Co‐operative, including but not limited to

(a) Records of all Officer elections;

(b) Names of the Directors present at each meeting of Directors or of any committee;

(c) All resolutions and proceedings at all meetings of the Co‐operative, the Directors, or any Committee. The Secretary may delegate the above activities to the EO.

d) Signing authority shall be held by three (3) Officers, one of which must be the Chair/President, and two of the members of the finance committee. Any two of the three shall constitute a full signature.”

The Governance Committee recommends that the entire clause be removed and replaced by, “The Directors will establish Officers of the Board in accordance with Board policy.”

Comment – This is a housekeeping edit. We shouldn’t be listing the officers and their duties in our by-laws. This detail should be included in our Board Policy booklet.

Bylaw 5) Meetings

a)ii) “The AGM shall be held annually and no later than March 28th of the year in order to receive and discuss the results of the prior fiscal (calendar) year.”

The Governance Committee suggests the wording should be changed to agree with current legislation. “The AGM shall be held annually and no later than 120 days after the fiscal year”.

Comment – This is a housekeeping edit and it agrees with current legislation.

Bylaw 5) Meetings

c) Board of Director Meetings

i) “The Board of Directors shall meet at least 3 times a year. One of the meetings must be in March, just prior to the AGM, one meeting as soon as possible after the AGM to elect Officers for the coming year and to conduct other business as required and one meeting during the months of October or November of the Year.”

The Board recommends this clause to be changed to “The Board of Director shall meet at least 3 times a year; once before the Annual General Meeting (AGM), once after the AGM, and a minimum of one time during the fiscal year.”

Comment – This is housekeeping edit.

Bylaw 9) Disputes

a)”Any dispute arising out of the affairs of the Co‐operative, between a Member, or any person aggrieved who has not ceased to be a Member for more than six (6) months, or any Member claiming on behalf of a Member or person aggrieved, and the Co‐operative or a Director, shall be referred to a committee of three (3) Members of the Co‐operative. The Chair/President, in the case of a grievance against the Co‐operative, or the Director involved, and the Member or other person aggrieved shall each nominate one Member, and the third shall be chosen by the two (2) nominated. The decision of the committee shall be final and binding on all parties and may be enforced on application to the Supreme Court of Ontario.”

The Governance Committee reviewed the clause and maintained that it is highly unlikely to be enforceable in a court of law. Instead, the Committee proposed to remove the entire clause and replace with “Disputes shall be handled in accordance with Board policy”.

Comment – Included in the Co-operative’s Board Policy booklet will be the dispute resolution procedures as listed in current legislation.