building prosperity together - prospera credit union€¦ · annual report 2016 building prosperity...

Annual Report 2016

Don’t just bank. Prosper.

together

building prosperity

Prospera Credit Union

Prospera is focused on my needs, I don’t feel they ever recommend products that aren’t right for me.

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corporate governanceAnnual Report 2016

Annual Report 2016

corporate governance

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SYDNEY TOROK

I’m very thankful for the opportunity to attend UVic and my experiences so far, which wouldn’t have been possible without the support of Prospera.

EDUCATIONAL AWARD WINNER

Annual Report 2016

Building Prosperity TogetherDuring 2016, we embarked on an important journey to develop our long-term strategy and vision for Prospera. That vision: “To be the trusted home for families and local businesses, building their financial dreams and prosperity within our communities,” reimagines the part we play in the lives of our members and our communities. As we grow, our ability to help others grows. We are better able to help bring the financial dreams of our members to life, to nurture prosperity for everyone in our communities and to grow Prospera to be a stronger organization. Below are just a few of the ways we’ve been doing that this past year.

VolinspireProspera was honoured to be one of the founding community partners of Volinspire, a unique technology platform that makes it easy to match volunteers with causes that are important to them, to help build a stronger and more connected community. Since it was introduced to staff in March 2016, over 75% of employees have created profiles on the platform and they have been busy logging hours, sharing their stories and making an impact in our communities. In 2016, Prospera staff logged 4,220 hours with a monetary value of $84,410.00. Volinspire is also used for managing Prospera’s volunteer program. All upcoming volunteer opportunities are posted on the platform, which allows staff volunteers to become engaged in their community and Prospera events and ensures that they are recognized for their efforts and the value of their contributions.

Co-ops in Schools ProgramThe newly developed BC Co-operative Association “Co-ops in Schools” Program (CIS), has two primary objectives: the first is to give youth the opportunity to learn about co-operatives and how they contribute to strong local economies. The second is to provide opportunities for students to gain practical business skills. The CIS program utilizes an innovative tri-mentorship model that gives professionals in the co-operative sector the opportunity to share their knowledge and experience by engaging them as “mentors” to university students and in turn, the post-secondary “mentees” share what they are learning with high school students through extra-curricular Co-op Clubs. As a regional program sponsor, Prospera provided mentorship support to five University of the Fraser Valley students who participated in the inaugural program. A highlight of the program is the Case Co-opetition, in which Co-op Clubs across the province are challenged to select from a list of real cases submitted by BC co-ops and credit unions and develop the best alternative to solve a business challenge.

Prospera Annual Report 2016 | 4


Stacey CrawfordChair of the Board

COMING TOGETHER IS A BEGINNING. KEEPING TOGETHER IS PROGRESS. WORKING TOGETHER IS SUCCESS.

“HENRY FORD

Annual Report 2016

Government RelationsGovernment Relations (GR) has increased in importance at Prospera over the last three years, during which time we have actively participated in, and supported, system led GR initiatives. Initially, these initiatives were a reaction to credit unions being impacted by increasing taxes and regulation. More recently, the focus has evolved with Central 1 (the wholesale banker and trade association for credit unions) and the credit union system as a whole, becoming more proactive in advocating for legislation and regulation that supports our growth.

Some of the key priorities of our GR activities are to:

1. Promote and enhance strategic relations with all levels of government.

2. Educate policy-makers about the value that credit unions bring to communities and economies and advocate for statutory and regulatory proposals, provincially and federally, that promote the development of the credit union system.

3. Communicate Prospera’s overall vision and priorities to government and advocate for policy and legislation that contributes to Prospera meeting its business and strategic objectives.

4. Actively consult with our credit union peers and Central 1 to ensure that we are in alignment and working together when issues or opportunities arise that are mutually beneficial.

Social MediaIn support of Prospera’s Growing Prosperity Strategic Plan, in 2016 we have been building a solid presence on our social channels to create opportunities that advance brand awareness initiatives, show how we benefit our communities and support the business objectives of our credit union.

Facebook continues to be the social media channel of choice for the audiences we most want to reach and throughout 2016, we continued to develop and share Prospera stories, promote what we are offering, enhance our brand awareness and increase awareness and engagement with our fans, members and communities. As we continue to grow and serve members through mobile channels, social media will be an ever more valuable tool for collaboration and relationship building within our communities.

Growing Prosperity for the FutureAs mentioned, 2016 was a significant year of transformation for Prospera. A considerable amount of thought and time went into establishing a new vision and enterprise strategy to prepare the organization for the future and, most importantly, to better serve the needs of our members. This restructuring resulted in some of the most consequential decisions our credit union has undertaken in some time. It was an opportunity to shape our future and the impact of those decisions has resonated throughout the organization, resulting in unprecedented employee engagement, incredible operational results and the highest member satisfaction in recent memory.

Your Board of Directors, the President & CEO, senior management and the entire Prospera organization continue to work as a team to establish our future direction. This collaboration is an experience I am very proud of, and while we all have different roles and responsibilities, we are all enthusiastically aligned to our objective of making a difference for our members and our organization.



Stacey CrawfordChair of the Board

Annual Report 2016

Setting a new course is always exciting. In 2016, Prospera Credit Union introduced a new five year plan to grow prosperity for our members, our credit union and our communities. We established a clear vision for the future that requires us to transform the way we do business in order to deliver sustainable, long-term value for our members and communities. Transformational change requires an honest self-assessment, clear strategy, aligned structure and governance, robust enterprise risk management and a focus on team and leadership. We have invested significantly in advancing each of these areas over the past year, with great results.

We have delivered the ‘good growth’ that I challenged the organization with one year ago with exceptional results in member service, new member growth, loans, investments, wealth management, employee engagement, and project execution. This is the result of hard work and a remarkable willingness on the part of every member of the team to invest in our vision as “the trusted home for families and local business, building their financial dreams and prosperity within our communities.” To sustain this momentum, we’ve introduced an initial round of technology and tools to enable our team to serve you, our members, more effectively.

Here are a few of the highlights:

In June, Prospera’s Board of Directors approved the credit union’s new long-term vision. Key elements of the strategy during this first phase include a focus on membership growth, member-led innovation, integration of teams and lines of business, and the development of a “business owner” strategy. I’m proud to say, in 2016 we have already made significant progress. With over 4,000 new members, net membership increased by 1.5 per cent in the year and today we are more than 63,300 members strong – that’s the most significant membership growth in the past five years.

Our “Vision 2020” strategy calls for meaningful growth in order to fuel our transformation and fund investments in technology, innovation, and communities. During the summer of 2016, Prospera reached an important milestone of $3 billion in Assets and by the end of the year total Assets under Management (which includes our Wealth portfolio) reached $4 billion. We have initiated IIROC certification for our Wealth Management staff, which



Shawn L. GoodPresident + CEO

YOU HAVE TO MAINTAIN A CULTURE OF TRANSFORMATION AND STAY TRUE TO YOUR VALUES.

“JEFF WEINER

Annual Report 2016

will expand our Wealth Management offering to include full-service brokerage solutions, providing more investment options for our members.Great leadership at every level within an organization is the secret to success. You don’t need a title to be a leader. Leaders live our values and hold themselves and others accountable to results and doing the right thing. They invest in solutions and take action. At the beginning of the year, we made a commitment to evolve our leadership culture in 2016 through effective coaching and more clearly defined leadership competencies, expectations and development opportunities. We also committed to holding semi-annual leadership development sessions for all managers.

In April of 2016, Prospera introduced the Young Leaders of Prospera program (YLOP), a new effort aimed at giving staff aged 40 and younger the opportunity to develop their leadership skills and prepare themselves for leadership roles in the future. In doing so, the program also supports the growth and development of our credit union. The Young Leaders program is focused around the three pillars of leadership: leading self, leading others and leading organizations. The Young Leaders Executive Committee, made up of 11 young Prospera leaders, is responsible for governing the program and creating engaging leadership and professional development opportunities that have a lasting and meaningful impact.

As a further investment in leadership development, for the first time in 2016, Prospera put forward a candidate for the National Credit Union Young Leaders Award. As Prospera’s nominee, Steven Lang, Branch Manager, West Oaks, attended the Canadian Conference for Credit Union Leaders in Saskatoon in May, where he had the opportunity to build connections with young leaders from all across Canada as well as learn from established credit union leaders.

I am also proud and excited to share that based on our strong employee engagement scores, Prospera is now a Great Place to Work certified company as endorsed by the Great Place to Work Institute, an organization dedicated to building a better society by helping companies transform their workplaces.

We’re dedicated to providing members with access and service when, where, and however they choose, including access to the latest technology and convenient, innovative payment options. In October of 2016, Prospera converted its payment processing system for ATMs and debit cards to Everlink Payment Services. With the conversion to Everlink, we adopted the latest in debit card technology – Interac Flash® – to further prepare our credit union for the adoption of Mobile Payments in Canada. Interac Flash® allows members to pay with a simple tap of their card. Going forward, Prospera will be able to take advantage of Everlink’s leading payments innovations across all seven of its operational areas: ATM Managed Services, Card Issuance and Management, Fraud Management Solutions, Mobile Payments, Payment Network Gateway, Professional Services and SME Solutions.

My sincerest appreciation to our members for their support and trust in Prospera, and to our staff and Board for their courage and commitment to delivering exceptional results in 2016.

With courage,



Shawn L. GoodPresident & Chief Executive Officer

Annual Report 2016


A year ago we were in denial about our finances. Thanks to Prospera, we completely rebuilt our financial lives. As a reward, we took a family trip to Disneyland, something we’d only dreamed about!

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ELISE FAIRCLOUGH

KELOWNA

Annual Report 2016

To achieve this, sound corporate governance business practices and policies have been adopted by the Board and cascaded throughout all levels of the organization. The Board of Directors strives to ensure that its governance is of the highest standard, while at the same time practical and transparent to Prospera members.

The Board’s governance responsibilities include, but are not limited to:

• Managing the Board’s affairs including recruitment, development, evaluation, Board composition and committee structure.

• Approving and monitoring the strategic plan, annual business plan and budgets.

• Selection, evaluation, development and succession planning of the President and Chief Executive Officer (CEO).

• Establishing standards of ethical business conduct and obtaining assurances that they are being adhered to.

• Ensuring compliance with applicable laws, regulations and guidelines.

• Approving and implementing a risk governance framework.

• Ensuring accountability and transparency mechanisms are appropriate and effective.



Prospera Credit Union’s Board of Directors and Management are committed to acting responsibly, ethically and with the highest standards of integrity to ensure that Prospera’s activities are continually structured and delivered in a manner that allows us to meet the needs of our members.

Annual Report 2016

The Board’s governance model has been developed over time and is a blending of practices that are deemed to be most appropriate for Prospera. These practices include the following principles, which have been adopted by the Board:

• The Board governs and Management manages. The Board’s role is to ensure that Prospera has the appropriate Management in place. Day to day management is the responsibility of the CEO, who reports to the Board of Directors.

• The Chair and the CEO are the official spokespersons for the Credit Union and a decision made by the Board is a decision that is publicly supported by all Directors.

• Only the Board can make decisions that are binding on the organization; however, the Board may elect to delegate these responsibilities to its standing and ad hoc committees.

• The Board has committed to transparency in its overall governance of Prospera.

• The Board’s Governance Manual which outlines philosophies, structures and methods by which the credit union is governed, is reviewed biennially and amendments are reviewed and approved by the Board.

AS SPECIFIED IN THE CREDIT UNION’S RULES, Prospera’s Board of Directors is comprised of nine shareholding members, each elected by the membership for a three-year term. As a whole, the Board is accountable for the stewardship and oversight of the Management of the Credit Union. Although the Directors may have special expertise and points of view, they do not represent a particular constituency.

Collectively, the Board has over 100 years of Director experience specific to Prospera Credit Union and its predecessors (Fraser Valley and Edelweiss Credit Unions). Individual Director tenure ranges from just under two years to 29 years.



15 years ago, my husband and I were self-employed and needed a loan. Prospera showed how much they care about their members and helped when no one else would.

“

Annual Report 2016

Stacey holds a diploma in Business Management and a Master of Arts in Leadership and Training. In 2016, Stacey attended the Governance Leadership Institute offered by the Rotman School of Business in Toronto and received his Certified Credit Union Director (CCD) designation. Currently the Economic Development Officer for the District of Mission, Stacey is responsible for managing the economic, tourism and film development portfolios of the municipality.

He has an extensive background as a community volunteer that includes past and current board governance with the Kinsmen Club of Mission, the Mission Regional Chamber of Commerce, Community Futures Development Corporation and the Rotary Club of Mission Midday. He also has a background in real estate and commercial lending.

Stacey is an avid supporter of the philosophy that local decision-making and local development are the most effective means for communities to shape their future.

EDUCATIONAL PURSUITS IN 2016:• Urban Development Institute, Fraser Valley Development 10 - Building Communities Together• International Summit of Co-operatives • Governance Leadership Institute - Certified Credit Union Director• Strategy Planning & Design - UBC Sauder School of Business• Canadian Credit Union Association – National Conference• Central 1 Credit Union Conference and AGM



Stacey CrawfordMA, CCD (Certified Credit Union Director) Board Chair Director Since 2012

As a co-operative financial institution guided by strong values and our vision to be the trusted home for families and local businesses, we want to broaden the definition of Prosperity. Prospera is purposely crafting a future committed to making life better not just for our own members, but for everyone in the communities we serve.

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Annual Report 2016

Eric has over 30 years of business experience as a professional engineer, business manager and leader. After spending a number of years in construction for BC Hydro, he retired from the organization as the Operations Training Program & Strategy Manager.

Eric’s community involvement includes serving as Chair of the Association of Professional Engineers and Geoscientists BC Mentoring Committee, helping to mentor engineers as they work towards their professional designation. He is also a classroom volunteer with Junior Achievement and a graduate of the Vancouver Leadership Program, which involved participation in a year-long community project for the KindActs Network Association of BC. In 2010, Eric was nominated for the BC Hydro Business Mentor Award.

Eric is a strategic thinker with strong business acumen who enjoys building valued working relationships in a team environment and developing innovative solutions based on a set of core values. Eric earned his ICD.D designation through the Institute of Corporate Directors Education Program in 2015.

EDUCATIONAL PURSUITS IN 2016:• Canadian Credit Union Association – National Conference• FICOM 2016 Credit Union Conference• PwC’s Financial Regulatory and Reporting Event


Eric NadinBASc., P.Eng., ICD.D (Institute of Corporate Directors) Vice Chair Director Since 2011

Prospera is committed to helping support your financial goals. Whether it is paying down debt, saving for the future or building a small business, Prospera will be there.“


Annual Report 2016

Angela’s educational background and experience, skills and passion are just some of the attributes that enable her to provide valuable input to the Board.

Angela holds designations as a Chartered Professional Accountant as well as a Certified Financial Planner. She currently operates a public practice accounting firm that focuses on the financial, tax and accounting needs of individuals and small business corporations.

Angela believes strongly in loyalty to members, commitment to communities, strong governance, enterprise risk management and the value of the co-operative principles on which a credit union is built.

Other Board Appointments: Director, Stabilization Central Credit Union Director, Central 1 Credit Union Director, British Columbia Co-operative Association Director, Agape Street Ministry Director, Sancta Maria House Association Director, CUPP Services Ltd. Director, Delta Police Board

EDUCATIONAL PURSUITS IN 2016:• The Changing World of Retail Payments - CPA Canada• Government Relations & Advocacy Update – CCUA• Central 1 Credit Union Conference and AGM• Canadian Credit Union Association – National Conference• FICOM 2016 Credit Union Conference• International Summit of Co-operatives• Corporate Governance Best Practices – Webinar, Korn Ferry Hay Group• Developments in Financial Regulatory Reporting – IFRS 2016 - PwC• Board Evaluations: The Quest for Best – ICD Webinar• The Intersection of Technology and Banking: How FinTech Innovators and Financial Institutions Can Steer Together – Fasken Martineau


Angela KaiserB. Comm, CPA, CGA, CFP, ICD.D (Institute of Corporate Directors)Director Since 2001

There is nothing more rewarding than being able to make a positive difference in the well-being of someone you care about. That is my definition of Prosperity and it is the experience we are striving to achieve at Prospera and the difference we are trying to make for individuals, families and communities. I have experienced it as a member of Prospera and I have seen the difference our credit union has made to others and in our communities.

“Prospera Annual Report 2016 | 13

Annual Report 2016

Karen’s long experience with effective governance started during her career as a journalist, where she learned the art of asking tough questions and demanding accountability. Her current position is Manager of Governance and Resource Development for Mission Community Services Society (MCSS), a not-for-profit agency responsible for delivering a variety of social programs. As a senior leader at MCSS, Karen manages an overall budget in excess of $4 million and is accountable to federal, provincial and local funding sources.

Karen holds the ICD.D designation for corporate governance from the Rotman School of Business at the University of Toronto. Karen chaired Prospera’s Board of Directors from 2007 to 2010 and has served multiple times as Vice Chair of the Board as well as Chair of the Audit and Investment and Lending committees. She is currently Chair of the Member and Community Relations committee. Karen is a strong believer in the power of co-operatives and works diligently to promote that business model in the community.

EDUCATIONAL PURSUITS IN 2016:• Governance – Federalization of Credit Unions Bill-C43


Karen LaingICD.D (Institute of Corporate Directors)Director Since 1991


No matter if you’re a first-time home buyer or a seasoned investor, at Prospera we treat you like family and we make it simple for you to make the right choices to fit your financial needs. When it comes to community, we put both our time and money where our mouth is—Prospera employees volunteer for dozens of community projects every year and as a co-operative, we support not-for-profit organizations in every community we serve. I’m so proud to be part of a successful community-based financial institution that puts people before profits.

“

Annual Report 2016

Tracy’s strengths include experience in operations, human resources, sales, marketing and government relations. Throughout her career, she has held various upper management and business consulting positions and founded Discover Wines VQA Wine Stores in 2003, where one store held the number one position in the province for sales of BC wines for thirteen years.

Tracy has been honored with many local and national business awards and gives back to the community by mentoring women who are starting new businesses and guest lecturing at UBC Okanagan and Okanagan University College. She has served on a variety of boards and has been invited to participate in government and economic development roundtable discussions.

In 2014, Tracy was elected to Kelowna City Council and she is also a Director of the Regional District of the Central Okanagan.

EDUCATIONAL PURSUITS IN 2016:• Centre for Credit Union Board Excellence • Election and Orientation of New Board Members • Role of the Board in Reporting to the Membership • The Role of a Credit Union Board in Strategic Planning • Role of the Board in Monitoring Performance• Central 1 Credit Union Conference and AGM


Tracy GrayDirector Since 2010


To me, prosperity means that our members are flourishing, thriving and successful, in whatever that looks like for them, whether personally or professionally—and knowing that we, as a credit union, play a part in making that possible.“

Annual Report 2016

Pauline is passionate about the co-operative principles, the credit union movement and the philosophy of “People helping People.” She has over 35 years of experience in the financial industry.

As Corporate Secretary and Chief Governance Officer of Prospera for 23 years, Pauline has a comprehensive understanding of the Financial Institutions Act and regulatory requirements. During this time, Pauline developed strong leadership, communication and people skills.

Pauline volunteered on the Board for The Centre for Child Development (The Centre) and the Child Development Foundation of BC and was ultimately hired as a consultant to assist the CEO in revising governance policies and the strategic planning process for the Board.

Prior to joining The Centre, Pauline spent six years on the Board of the United Way of the Fraser Valley, serving as president for two of those years. Pauline supports the Mental Health Society and is a member of Communitas Supportive Care Society.

EDUCATIONAL PURSUITS IN 2016:• FICOM 2016 Credit Union Conference• The Board Evaluation Process – ICD webinar


Pauline HavelockDirector Since 2013


Prosperity from our point of view is having the confidence to invest all of our assets with Prospera. By educating members about Prospera’s Wealth Management expertise, we can ensure that more of our members benefit from the comprehensive financial planning that is available to them.

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Annual Report 2016

Serving the membership in an active and accountable manner is Sylvia’s goal. This involvement has strengthened her resolve to ensure Prospera continues to be strong, vibrant and relevant to our staff and members.

Sylvia’s extensive community experience on numerous boards and committees has provided a solid foundation of skills for the credit union role. These skills include budgeting and financial management, leadership and communication skills, sound decision-making abilities and the capacity to contribute effectively as part of a team.

Sylvia served for 15 years on the District of Kent municipal council including six years as Mayor and recently served seven years as a Vice-Chair Commissioner with the Agricultural Land Commission. In November 2014, she made the personal decision to re-involve herself and was successfully re-elected as a Councillor.

Past volunteer activities include serving on the fundraising committee for the new emergency room at Chilliwack General Hospital and the Healthy Communities Committee for Kent/Harrison. Sylvia is also a founding member of the Kent Harrison Foundation, past President of the Harrison/Agassiz Rotary Club, Vice Chair of the RVRD Hospital Board and a Director of the Fraser Basin Council.


Sylvia PrangerDirector Since 1996


Prosperity to me is about playing our role as a community builder, committed to improving the well-being of our members and communities in good times as well as in tough times. Our dedication to volunteerism also helps to ensure that we continue to contribute to our local communities in a meaningful way.

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Annual Report 2016

Rowland has dedicated the majority of his career to the credit union/co-operative sector and most of this career has been spent with Central 1 Credit Union, the wholesale banker and trade association for credit unions in British Columbia and Ontario. His background is in finance and investment management and he retired from Central 1 in 2011 as Chief Operating Officer and Chief Financial Officer, a position that he held for over 12 years.

Rowland has also worked in the retail credit union sector and understands the challenges of retail banking and the financial and regulatory issues faced by credit unions today.

Rowland has served on a number of credit union affiliated boards, the most recent being The Co-operators Insurance Group (2008-2012), where he served as Chair of the Audit Committee. He has also served on the boards of Credit Union Central of Canada (2006-2008), Ethical Funds, Inc. (2004- 2008) and the Credential Group (1998-2004).

In his 30-year career, Rowland has seen significant changes in the credit union sector. In that time, credit unions have evolved into major players in the financial services sector and major contributors to the financial health and well-being of their members and their local communities. Rowland is dedicated to seeing these positive trends continue.

EDUCATIONAL PURSUITS IN 2016:• FICOM 2016 Credit Union Conference• Central 1 Credit Union Conference and AGM


Rowland KellyBA Econ/Comm, CPA, CGA

Director Since 2015


As a member of the Board of Prospera, I am a witness to the total commitment by my fellow Directors, the management team and staff to deliver on our promise to families, local businesses and communities to help to build their financial dreams. What’s more, there is a commitment to continually search for innovative ways to deliver on this promise.

“

Annual Report 2016

As a Certified General Accountant, Karl operated his own accounting practice (Noordam & Co, CGA) for 30 years in Surrey before merging the firm with Vohora & Co, CA in 2012. His profession has stood him in good stead in exercising his role as a Director for Prospera Credit Union for the past 25 years.

Karl has served on all committees of the Board and acted as past Chair of the Investment and Lending Committee. He is currently Chair of the Audit Committee. From 1998 to 2007, Karl was privileged to serve as Board Chair during which time Fraser Valley Credit Union merged with Edelweiss Credit Union to form Prospera Credit Union.

In 2002, Karl attended the London School of Business (UK) and obtained his Certified Credit Union Director (CCD) designation.

Karl is a strong, community-oriented person and a long-time resident of Abbotsford and Chilliwack. He has been very involved in volunteer capacities and has served for many years on the Board of Trustees of Emmanuel Free Reformed Church in Abbotsford as both Board Chair and Treasurer.

EDUCATIONAL PURSUITS IN 2016:• Central 1 Credit Union Conference and AGM


Karl NoordamCPA, CGA, CCD (Certified Credit Union Director)

Director Since 1988


In an age where much uncertainty exists in the economic world, it is critically important for individuals, families and businesses to have the assurance of financial independence and security. The support and guidance they receive from their financial advisors can play an important role in ensuring this. Prospera’s motto, “Don’t just bank, Prosper.” is our pledge to you that we have the products, services, knowledge and commitment to help ensure your financial well-being through good times and bad.

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Annual Report 2016

DIRECTOR COMPENSATION Prospera offers a level of remuneration that both reflects its co-operative heritage and satisfies the market reality in order to attract and retain Directors with the business experience and skills required to achieve the Credit Union’s strategic plan.

The Director Remuneration Policy is reviewed every three years by the Conduct Review and Governance Committee, which may from time to time retain the services of an independent remuneration consultant.

Annual Compensation levels are as follows:

Board Chair $27,000Vice Chair $16,500Committee Chairs $16,500 (Audit Chair receives an additional $1,000)All other Directors $13,500

In addition to the honorarium noted above, Directors receive a $500 per diem for attendance at Board meetings and a $300 per diem for Committee meeting attendance.

DIRECTOR EXPENSESDirectors are reimbursed for mileage, travel and business expenses incurred on Credit Union business. Directors are expected to provide receipts for all expenses and reimbursement is based on reasonable and accountable out of pocket expenses.

EDUCATIONIn accordance with the Credit Union Incorporation Act, all Directors are required to complete Level A of the Credit Union Director Achievement (CUDA) Program – ‘Foundations of Governance.’

Additionally, Directors are required to engage in learning activities that will expand their knowledge and enhance their role as a Credit Union Director.

Ongoing professional development is supported by providing periodic special presentations in-house with subject matter experts at Board and Committee meetings. Presentations over the past year included:

• Capital• The Future State of Credit Unions – Central 1 Credit Union• Credit Union Executives Society – Director Education Platform• International Financial Reporting Standards (IFRS) 9: Financial Instruments • Risk Management – Peter Reimer and Associates• Cyber Security Awareness – Annual training and testing• Anti-Money Laundering and Counter-Terrorist Financing – Annual training and testing

To further encourage active participation with individual continuous learning, Prospera provides funding up to $15,000 per Director for each three-year term. This allowance covers registration, travel, accommodation and meal costs for attendance at conferences and seminars. (Required and optional CUDA modules are available to all Directors and are not included in the $15,000 allowance).



Annual Report 2016

SUMMARY OF COMPENSATION AND EXPENSES FOR 2016‘Gross Remuneration’ includes annual honorariums as well as meeting and education session per diems. ‘Expenses & Education’ figures include mileage, conference and education session registration fees with related expenses (i.e. travel, accommodation and meals), data plan costs for a Prospera issued iPad for Board use as well as a nominal telecom allowance.

DIRECTOR 2016 GROSS EXPENSES & TOTAL REMUNERATION EDUCATION

Stacey Crawford - Board Chair 47,600 17,344 64,944Eric Nadin - Vice Chair 35,350 6,273 41,623Angela Kaiser 26,500 4,405 30,905Karen Laing 23,550 2,866 26,416Tracy Gray 23,300 13,100 36,400Pauline Havelock 26,800 4,441 31,241Karl Noordam 27,150 4,259 31,409Sylvia Pranger 23,419 2,084 25,503Rowland Kelly 27,342 4,610 31,952Total 261,011 59,382 320,393



Annual Report 2016

BOARD AND COMMITTEE MEETING ATTENDANCE There were nine regularly scheduled Board meetings in 2016 for which there was 97% attendance.

Much of the Board’s groundwork takes place at the Committee level. Each spring following the Annual General Meeting, Committees are realigned and Directors are strategically rotated through different Committees to provide experience while preserving continuity and developing leadership. 2016 Board and Committee attendance was as follows:

DIRECTOR BOARD MEETING COMMITTEE ASSIGNMENTS COMMITTEE ATTENDANCE ATTENDANCE

Stacey Crawford 8/9 Human Resources (January – December) 6/6Board Chair Conduct Review & Governance (January – May) 1/1 Nominations & Elections (June – December) 2/2

Eric Nadin 9/9 Audit & Risk (June – December) 3/3Vice Chair Nominations & Elections, Chair (January – May) 1/1 Member Community Relations (January – May) 1/1 Conduct Review & Governance, Chair (June – December) 3/3 Audit & Risk (Year-end meeting only) 1/1

Tracy Gray 9/9 Nominations & Elections (June – December) 2/2 Investment & Lending (January – May) 1/1 Member Community Relations (January – December) 4/4 Audit & Risk (Year-end meeting only) 1/1

Pauline Havelock 9/9 Nominations & Elections, Chair (June – December) 2/2 Member Community Relations, Chair (January – May) 1/1 Conduct Review & Governance (January – December) 4/4 Audit & Risk (Year-end meeting only) 1/1

Angela Kaiser 9/9 Human Resources, Chair (January – December) 6/6 Audit & Risk (January – December) 4/4

Rowland Kelly 9/9 Human Resources (January – December) 6/6 Investment & Lending (January – May) 1/1 Investment & Lending, Chair (June – December) 3/3 Audit & Risk (Year-end meeting only) 1/1

Karen Laing 8/9 Investment & Lending, Chair (January – May) 1/1 Investment & Lending (June – December) 2/3 Audit & Risk (January – May) 2/2 Member Community Relations, Chair (June – December) 3/3

Karl Noordam 9/9 Audit & Risk, Chair (January – December) 4/4 Nominations & Elections (January – May) 1/1 Investment & Lending (June – December) 3/3

Sylvia Pranger 9/9 Nominations & Elections (January – May) 1/1 Member Community Relations (June – September) 2/2 Conduct Review & Governance, Chair (January – May) 1/1 Conduct Review & Governance (June – December) 3/3 Audit & Risk (Year-end meeting only) 1/1

Note: The Board Chair also served as an ex-officio member on all other Committees.



Annual Report 2016

CEO COMPENSATION DISCLOSURE

Our Total Rewards PhilosophyAt Prospera, we provide a comprehensive and competitive total rewards programs for our employees. Our programs are designed to ensure we act with members’ best interests in mind and perform as a team to the best of our capability. Our total rewards programs:

• Align the interests of our employees with the organization’s business goals and interests of our clients/members.• Are competitive within the regions/markets where we compete for talent.• Provide clear and consistent communication to all stakeholders.• Support the transformation and changes at Prospera.• Enable Prospera’s go-forward culture.• Recognize differentiated levels of individual performance within the same role.• Are comparable externally and internally.• Are flexible in aligning with our changing business conditions and growth needs.

Our goal is, for most positions, to target the median (also known as 50th percentile or P50; it is the value in which one-half of the observations included in the sample are above and one-half are below) for all of our cash compensation programs. We may target at higher than the median (P50) for certain positions due to market conditions or strategic intent. We will review the external marketplace on a continuing basis through the use of published and custom surveys. We will look for data which matches the appropriate organization size, geographic region and industry in which we recruit.

Compensation ProgramsProspera reviews compensation programs for all employees with the Human Resources Committee of the Board on an annual basis. The Board of Directors is responsible for CEO compensation and for determining any specific elements for the CEO.

Prospera has defined salary structures and we have published salary ranges up to senior management levels. We have a flexible benefits program and a defined benefit pension plan that is offered to eligible part time employees and all full time employees. We have a short term incentive plan that applies to all non-wealth management employees, and has targeted eligibility levels based on position complexity, responsibility and market practices.

CEO Compensation Summary The CEO’s compensation package is reviewed by the Board of Directors annually, based on the Central 1, Korn Ferry industry survey and Mercer industry survey for executive compensation in credit unions. Prospera targets the 50th percentile for total target cash in the comparator market.

For the fiscal year ending December 31, 2016, the CEO earned the following compensation:

DESCRIPTION AMOUNT

Base Salary $ 325,806

Variable Pay $ 148,865(*paid in 2017 for 2016 fiscal year performance)

Pension, benefits and perquisites Please see descriptions on next page



Annual Report 2016

CEO Short-Term IncentiveThe CEO’s Short Term Incentive (STI) Plan is the same as the Prospera Variable Pay Plan that applies to all non-wealth management employees in the organization, with a target commensurate to the employee’s level of responsibility and influence. The STI is based on the achievement of both organizational goals and individual performance objectives and leadership competencies. The target for the CEO has been established at 40% of base salary.

In fiscal year 2017, the CEO received $148,865 based on the achievement of 2016 organizational performance, and factored with individual performance and the overall funding available for the total organization. The STI plan specifies that all payments under the plan are contingent on audited financial results and final board approval. While the STI was earned for performance in fiscal year 2016, actual payment is made in fiscal year 2017, once fiscal year 2016 results are finalized.

Benefits, Pension and PerquisitesThe group benefits provided to the CEO are consistent with those received by all other employee groups within Prospera. As part of the standard coverage, the CEO participates in the flexible benefit plan that provides plan credits to the participant in order to select a custom benefits package that is aligned with their life situation (e.g. single/married, dependent/spousal coverage) and which offers plan credits based on a defined formula.

The CEO is eligible for retirement benefits through the BC Credit Union Employees Pension Plan – 1.75% Division, as well as the Prospera Credit Union Supplemental Pension Plan (SERP). The SERP is a supplemental pension that mirrors the base plan and is in place for certain executive employees whose benefits are restricted by reason of limits on retirement benefits prescribed under the Income Tax Act.

Under the 1.75% pension plan both the employee and the employer are required to contribute in an amount set by the Trustees of the Plan, in consideration of the recommendations from a qualified actuary regarding the total required level of contributions to ensure that the plan will be able to meet future obligations. Plan members are not required to contribute to the SERP.

The pension formula used for both plans to determine the annual pension is 1.75% of average earnings multiplied by years of service. For the purpose of calculating contributions to the SERP for the CEO, earnings include the STI payment.

Additional benefits and perquisites are also provided to the CEO. These include a car allowance and flexible perquisite account. The combined value of both is equivalent to 10% of base salary.

SeveranceThe CEO has a severance agreement of 18 months’ base salary. The CEO would be entitled to STI for service up to the last day worked in a calendar year. The agreement does not provide for benefits continuation.



Annual Report 2016

PROSPERA SENIOR LEADERSHIP TEAM Senior Leadership Team bios are available on prospera.ca

Shawn L. GoodPresident & Chief Executive Officer

Diane Dou Chief Operating Officer

Michael Kerdachi Chief Financial Officer

Greg DyckChief Information Officer

Lili CordeiroSenior Vice President, People and Culture



https://www.prospera.ca/AboutUs/CorporateInformation/Executive/

Annual Report 2016

Don’t just bank. Prosper.

Prospera Credit Union

[email protected] Free: 1 888 440 4480

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