Mark Lee on Co-operative Societies (Amendment) Bill

The proposed amendments are designed to empower co-operatives (co-ops) to serve their members' interests more effectively, but these changes must be implemented alongside robust safeguards to ensure prudent risk management, said NMP Mark Lee. Speaking in Parliament on Wednesday (Apr 3), he noted that the proposal to allow co-ops to use their reserves to pay dividends aims to ensure that credit co-ops build up sufficient institutional capital to absorb operational losses. He raised concerns that this may put credit co-ops at risk of reducing institutional capital. He wanted to know if there are other advisory and fiduciary safeguards, besides the Registrar’s approval, to help credit co-ops better assess dividend-related decisions in a prudent and objective manner. Mr Lee said with the broader use of the reserves, consistent policies, procedures and processes are even more critical for good governance. He proposed setting up a shared secretariat service to assist smaller trade associations which have limited resources in administrative and operational tasks. He also proposed developing a shared service offering to address collective concerns such as cybersecurity threats and the adoption of new technologies to enhance efficiency and growth.