Co-op members elect a board of directors to oversee the governance of the organization.
Board member duties include, but are not limited to: business planning, financial planning, fund development, employee selection and management, member management, setting policy, serving as a spokesperson for the cooperative, resource allocation, conducting audits.
Board members are accountable to cooperative stakeholders. Their actions must align with the co-op’s vision and mission, and aim to accomplish the organization’s purposes. Determining the cooperative’s objectives, policies, and goals are the responsibility of the board. When and how those objectives, policies, and goals are achieved are also up to the board.
Who should serve on the board of directors? The board of directors are committed members of the cooperative. Often they have specialized knowledge that can be applied to help grow the business or create efficiencies within the organization.
How to recruit board members? Make a list of members that can contribute value to the cooperative business and develop nomination criteria to evaluate those members for the board of directors. Examples of evaluation criteria include a member’s level of participation in the cooperative, commitment to the business, industry experience and knowledge, influence, trustworthiness, and integrity, as well as levels of competence and confidence. Board members should be comfortable serving in a leadership role.
After evaluating each potential member, gauge their interest in serving on the co-op’s board of directors. Outline what duties will entail and how much time they can expect to commit to board activities.
How many board members? Members determine the number of individuals that make up the board, and the terms of board members’ service. Typically these decisions are outlined in a cooperative’s bylaws. A large board offers a larger pool of knowledge and experience, more interaction, and greater support. However, a large board often hinders decision making. It is easier to coordinate the efforts of a small board of directors. Small boards tend to be more engaged in cooperative governance and have greater flexibility to execute strategic decisions. Ultimately, the size of a board should reflect the co-op’s stage of growth and business goals.
Initial training: First, the board must be educated on the current state of the cooperative business and its future goals. An understanding of the co-op’s relative position in the industry and marketplace can help guide the board of directors’ strategic decisions.
The roles and responsibilities of board members should be clearly outlined at orientation. Control issues and power struggles are the source of headaches for many cooperatives. Orientation is a good time to distinguish between board directors and management; directors are elected by the members to govern the cooperative while managers are decision makers in daily operations.
Ongoing training. Co-ops that provide ongoing training to the board of directors and management team are 15% more likely to remain in business, 41% more likely to achieve growth, and enjoy a 26% increase in member satisfaction, according to the research paper, “Key Success Factors for Emerging Agricultural Marketing Cooperatives.” After initial orientation, training can focus on how to better serve stakeholders, challenges facing the industry and other issues identified by members and management.
How often to perform ongoing training? Plan 3-4 training sessions throughout the year. Training can be written, lecture, in-person, remote, or a combination of these. Subsequent sessions should focus on important issues, and stick to those issues, in order to avoid turning the training into a board meeting.
Dr. Chris Bruynis, author “Key Success Factors for Emerging Agricultural Marketing Cooperatives,”shares the importance of board member training for the overall success of the co-op.
Understanding Cooperatives: Who Runs the Business? (Rep. No. 45). Washington D.C.: USDA Rural Development.
Rod Kelsay, Executive Director of the Mid America Cooperative Council, in discussions with author.