Agri 2301 part III ch 11 cooperative directors and managers

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Describes the roles and responbilities of directors and managers

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Agri 2301 part III ch 11 cooperative directors and managers

  1. 1. <ul><li>Chapter 11: The Cooperative Business Team: </li></ul><ul><li>Members and Directors – Policy & Control </li></ul>
  2. 2. Members Make Cooperatives Work S 5.1
  3. 3. Exercising Member Responsibilities <ul><li>Commitment and Use </li></ul><ul><li>Ownership and Control </li></ul><ul><li>Finance </li></ul>S 5.2
  4. 4. <ul><li>Commit to </li></ul><ul><li>Use Products and Services </li></ul><ul><li>Maintain Control </li></ul><ul><li>Provide Financing </li></ul>Member-Owner Commitment and Use S 5.3
  5. 5. <ul><li>Using the cooperative is members’ easiest responsibility to carry out, and by using it as much as they can, members help the cooperative succeed </li></ul>Member-Owner Commitment and Use S 5.4
  6. 6. Member Ownership and Control <ul><li>Know legal responsibilities </li></ul><ul><li>Understand the Cooperative </li></ul><ul><li>Make decisions </li></ul><ul><li>Vote </li></ul><ul><li>Express opinions </li></ul><ul><li>Serve (board/committees) </li></ul>S 5.5
  7. 7. Member-Owners Have Legal Responsibilities <ul><li>Incorporate </li></ul><ul><li>Approve legal documents </li></ul><ul><li>Elect directors according to mandated State law and cooperative policy </li></ul><ul><li>Ensure that general business and cooperative-specific laws are followed </li></ul><ul><li>Make major decisions that alter legal status </li></ul>S 5.6
  8. 8. Owners Must Understand Their Cooperative <ul><li>Know and understand its </li></ul><ul><li>Definition and history </li></ul><ul><li>Mission or purpose </li></ul><ul><li>Articles and Bylaws </li></ul><ul><li>Organizational structure and staffing </li></ul><ul><li>Products and services </li></ul><ul><li>Policies </li></ul>S 5.7
  9. 9. Member-Owner Financial Responsibilities <ul><li>Finance in Proportion to Use </li></ul><ul><li>Most capital from members </li></ul><ul><li>Distribute earnings according to use </li></ul><ul><li>Return equity to inactive members </li></ul><ul><li>Revolve equity </li></ul>S 5.8
  10. 10. Ways Member-Owners Finance Cooperatives <ul><li>Direct Investment </li></ul><ul><li>Retained margins </li></ul><ul><li>Per-unit retains </li></ul><ul><li>Start-up capital </li></ul>S 5.9
  11. 11. Using the Cooperative is Essential for <ul><li>Maintaining control </li></ul><ul><li>Achieving business success </li></ul><ul><li>Fulfilling member needs </li></ul><ul><li>Producing continuing benefits </li></ul>S 5.10
  12. 12. THE COOPERATIVE DIRECTOR S 5.11
  13. 13. Directors <ul><li>Hold a key position between members and hired management </li></ul><ul><li>Set cooperative objectives and chart its course </li></ul><ul><li>Make cooperative policy </li></ul><ul><li>Must be well versed in many areas </li></ul><ul><li>Have time and energy </li></ul><ul><li>Listen, inform, advise </li></ul><ul><li>Represent the cooperative </li></ul>S 5.12
  14. 14. Selecting Directors <ul><li>A good director should be able to </li></ul><ul><li>Show leadership </li></ul><ul><li>Think independently </li></ul><ul><li>Place cooperative’s interests first </li></ul><ul><li>Make good business decisions </li></ul><ul><li>Communicate well </li></ul><ul><li>Express views </li></ul><ul><li>Make the most of available resources </li></ul><ul><li>Promote the cooperative </li></ul>S 5.13
  15. 15. Furthermore, a Director <ul><li>Gets along with others </li></ul><ul><li>Uses the cooperative fully </li></ul><ul><li>Is interested in its performance </li></ul><ul><li>Participates in decision-making </li></ul><ul><li>Understands that he/she is representing owners in their business </li></ul><ul><li>Understands his/her role in relation to management </li></ul>S 5.14
  16. 16. Potential Directors <ul><li>Helpful to identify by nominating committee </li></ul><ul><li>Should be studied by the membership - biographical sketch - prior to the election </li></ul><ul><li>Considered for election at annual meeting </li></ul>S 5.15
  17. 17. Elect Directors <ul><li>Equitable representation </li></ul><ul><li>At-large system </li></ul><ul><li>Geography </li></ul><ul><li>Business volume </li></ul><ul><li>Commodity </li></ul><ul><li>Personal Expertise </li></ul>S 5.16
  18. 18. Elected Directors <ul><li>Have primary control </li></ul><ul><li>Use strategic perspective to better serve members’ needs </li></ul><ul><li>Delegate daily operational control to the manager </li></ul>S 5.17
  19. 19. Directors Recognize Division of Responsibility <ul><li>Directors Manager </li></ul><ul><li>Have primary control Has operational control </li></ul><ul><li>Strategic perspecti5e Tactical perspective </li></ul><ul><li>Develop operational and Follows operational and </li></ul><ul><li>organizational policies organizational policies </li></ul><ul><li>Take counsel from manager Advises board </li></ul><ul><li>Make big-view decisions Day-to-day decisions </li></ul><ul><li>Provides direction Acts in line with direction </li></ul><ul><li>Hire/fire manager Hires/fires staff </li></ul>S 5.18
  20. 20. Director Responsibilities <ul><li>Preserve cooperative character </li></ul><ul><li>Safeguard assets </li></ul><ul><li>Hire the manager </li></ul><ul><li>Set policies </li></ul><ul><li>Distribute benefits </li></ul><ul><li>Plan for the future </li></ul><ul><li>Evaluate </li></ul><ul><li>Elect board officers </li></ul><ul><li>Appoint committees </li></ul>S 5.19
  21. 21. Directors Preserve Character <ul><li>Serve according to laws and regulations! </li></ul><ul><li>Laws </li></ul><ul><li>Bylaws </li></ul><ul><li>Articles </li></ul><ul><li>And carry on the cooperative’s spirit! </li></ul>S 5.20
  22. 22. Directors Safeguard Assets <ul><li>Protect members’ investment </li></ul><ul><li>Make sound financial decisions </li></ul><ul><li>Hire auditors </li></ul>S 5.21
  23. 23. Directors Hire Manager <ul><li>Appraise applicant qualifications </li></ul><ul><li>Delegate day-to-day control </li></ul><ul><li>Appraise performance </li></ul>S 5.22
  24. 24. Directors Set Policies <ul><li>Originate and approve </li></ul><ul><li>Function and business related </li></ul><ul><li>Reviewed and updated </li></ul><ul><li>Policy manual </li></ul>S 5.23
  25. 25. Directors Distribute Benefits <ul><li>Amount of patronage refund </li></ul><ul><li>Proportion in cash </li></ul><ul><li>Allocated equity </li></ul><ul><li>Unallocated equity </li></ul><ul><li>Equity revolvement and retirement </li></ul>S 5.24
  26. 26. Directors Plan <ul><li>Assess business climate </li></ul><ul><li>Evaluate challenges--internal and external growth, business volume, membership, territory, assets </li></ul><ul><li>Develop objectives and strategies </li></ul><ul><li>Monitor progress </li></ul>S 5.25
  27. 27. Directors Self-Evaluate <ul><li>Internal assessments </li></ul><ul><li>Self-ability, performance </li></ul><ul><li>Whole board performance </li></ul><ul><li>Board meeting productivity </li></ul>S 5.26
  28. 28. Directors Choose Leaders <ul><li>Elect Board Officers </li></ul><ul><li>President </li></ul><ul><li>Vice president </li></ul><ul><li>Secretary </li></ul><ul><li>Treasurer </li></ul>S 5.27
  29. 29. Directors Appoint Committees <ul><li>Temporary or permanent </li></ul><ul><li>Field of study (finance, feasibility, marketing, purchasing, etc.) </li></ul><ul><li>Recommendations to the board </li></ul><ul><li>Power to decide </li></ul>S 5.28

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