Over the last twenty years, the Agency has made significant strides in helping housing co-operatives address the issue of directors in arrears as a part of its client risk assessment.
In 2007, 28% of co-ops reported having directors who owed money to their co-op. But by 2024, that number dropped to an all-time low of just 51 directors across our portfolio, with the total amount owed falling by 86%, from over $500,000 to just $72,471. This data is reported by each Agency client co-operative as of the last day of their fiscal year.
This metric is critically important not only from an ethical standpoint, but for what it indicates about broader financial practices at co-ops.
Our analyses consistently show that co-operatives with directors in arrears have consistently reported much higher rates of member arrears and bad debts. This correlation shows the ethical and financial risks of allowing indebted directors to remain on the board.
Directors are expected to model responsible behaviour and uphold the co-op’s rules. When they fail to do so, they undermine their credibility and the co-op’s financial health.
Over our history, the Agency has strongly encouraged co-ops to adopt by-laws that prevent members in arrears from serving as directors. This policy shift has not only reduced arrears but also helped change the culture within co-ops.
Even where formal rules have been slow to catch up, the conversation around ethics have led to greater accountability. Some co-ops still allow directors to remain on the board if they’ve signed a repayment agreement.
But the Agency’s position is clear: arrears are arrears, and leadership means setting the standard for ethics, governance, and financial sustainability.
Check out more information from the Agency’s 2024 Portfolio Performance Report.