Governance at Affinity

As an Affinity member, you’re also an owner! Your say is important in determining the directors and delegates who work for you to represent your interests.

Board Governance The Board has a comprehensive charter and mandate that guides their accountability to provide oversight and direction for Affinity Credit Union. This includes commitment to achieving the highest standards of corporate governance and overseeing the effectiveness of business operations and the risk management framework.

The Board meets at least quarterly to discharge their primary responsibilities to approve and oversee items essential to prudential oversight of Affinity Credit Union, such as strategy, risk appetite, capital plans and key policies, and to provide challenge, advice and guidance to senior management.

In 2021, the Board met their expectations to discharge their essential duties. Through the execution of their work plan, the Board accomplished the following key deliverables:

• continued to respond to the COVID-19 pandemic and provided direction in the successful continuation of member service, while ensuring the safety of our employees, members and communities, • accelerated the development of a Truth &

Reconciliation road map, building on our

established commitments and calls to action as a credit union in the key areas of: • create opportunities for learning and discovery of the history, truth and importance of reconciliation for our employees, members and communities • develop connections to expand employment, education and economic prosperity with Indigenous Peoples, communities and businesses • foster an environment that’s inclusive, respectful and welcoming • approved a three-year recurring Board

Performance Assessment cycle; and • approved the 2022-2024 strategic plan aligned with our goals and aspirations of being the financial institution of choice in Saskatchewan with a renewed focus on: superior member value, frictionless touchpoints, superior workforce talent, local & co-operative strength and a solid foundation, which includes: • financial strength & retailing strength • risk, compliance & control regimes • governance & oversight • data & digital readiness • Environmental, Social and Governance (ESG) commitment

Governance Model Review The Governance Committee conducts a governance model review at minimum every five years or more frequently as deemed necessary. In order to fulfill the board’s accountability to members and to satisfy it’s legal and regulatory obligations, the review monitors the effectiveness and appropriateness of the Board Governance Framework and the Delegate Framework.

The Board of Directors initiated a governance model review in early 2021 to assess Affinity’s current governance model and determine what, if any, improvements should be considered. The 2021 model review coincided with the regular five-year cadence and was conducted in the context of Affinity being designated a Provincially Significant Financial Institution (P-SIFI) by its regulator Credit Union Deposit Guarantee Corporation (CUDGC). As a P-SIFI, Affinity is held to a higher standard and subject to more intensive supervision by CUDGC. In tandem with the governance model review, CUDGC conducted a review and assessment of Affinity’s governance framework and their findings supported the proposed revisions to the governance structure. Following extensive review and discussion, the Board has determined that a model with an at-large director election aligns the best with the established guiding principles and the overarching requirements to respect the co-operative nature of Affinity while meeting regulatory expectations.

The Board is recommending a revised governance structure and amended Affinity Credit Union Bylaws for presentation to members for their review and approval at the April 20, 2022 Annual General Meeting (AGM).

Orientation & Continuing Education The Board is committed to the provision of appropriate opportunities for the education and professional development of directors to ensure that the Board has the knowledge and skills necessary to fulfill its oversight responsibilities.

New directors are offered orientation and mentorship programs to familiarize themselves with Affinity’s governance processes and business operations. The Governance Committee conducts an annual debriefing of the orientation and mentorship programs to capture enhancement opportunities for subsequent years.

In addition to individual director development, the Board approved ongoing director training and development including educational sessions, industry-sponsored seminars and conferences relevant to Affinity’s business. In 2021, the following board education sessions were held to address topics considered to be particularly important, including The Art and Science of Chairing a Board and Committees, The Future of Consumer Directed Finance (Open Banking), Risk Awareness for Directors, A Competency Approach to Governance, and Governance Oversight of Information Security.

The District Councils As Affinity ambassadors, delegates are role models in their communities and represent Affinity by attending events, being visible to community members and attending delegate meetings. District Councils identify opportunities for credit union support, review and approve community development funding and award the Elwood Harvey Co-operative Leadership scholarship program. The district councils are Affinity’s grassroots connection to our members and ensure communication and feedback between the district councils and the Board.

The nine district councils met their meeting cycle requirement of four meetings during 2021. Through the execution of their work plans, the district councils accomplished the following key deliverables:

• reviewed 251 community development funding applications and distributed over $570,000 to community initiatives; • awarded 20 scholarships to young leaders; and • updated and approved district council funding guidelines including funding priorities, assessment and eligibility criteria.