Management of a cooperative business is a collaborative effort between members, the board of directors, managers, and employees. Each group has distinct duties and responsibilities.
The owners of a cooperative are members of the cooperative. Co-ops typically operate using a one-member one-vote system where each member has one equal vote to make business decisions.
The level of engagement of members in cooperative governance varies widely. In some cooperatives, members may remain at a distance, trusting an elected board of directors to create policy and hire management to carry out the daily business of the co-op. In other cooperatives, members may be highly engaged and attend meetings, serve on special committees, and provide ongoing feedback to the Board of Directors.
Rod Kelsay, Executive Director Mid America Cooperative Council (MACC), talks about member engagement.
Board of Directors
The board of directors is elected by the cooperative’s membership base. Potential board members should be knowledgeable about the cooperative and active participants in the business. Industry knowledge and expertise is preferred.
The board of directors is responsible for representing members, establishing the policies of the cooperative, hiring and supervising management, acquiring and preserving assets, maintaining the cooperative character of the business, assessing the co-op’s performance, and keeping members informed. Board officers typically include a president, vice president, secretary, and treasurer.
Rod Kelsay, Executive Director MACC, highlights board of directors’ role in the co-op.
Managers oversee co-op operations. Managers lead co-op functions including marketing, finance, and human resources. Managers work with employees, training and supervising daily activities. Managers carry-out the policies set by the board. They work closely with the board to ensure policy is effectively executed.
Rod Kelsay, Executive Director MACC, outlines the role of the manager in a cooperative business.
The workforce is the lifeblood of the cooperative. Employees, paid and volunteer, should be trained and empowered to carry out daily business tasks. Additionally, employees should have a clear understanding of what a cooperative is, and what makes the model unique.
Baarda, J. (2003). “Co-op boards’ circle of responsibilities.” in The Circle of Responsibilities for Co-op Boards. U.S. Department of Agriculture, Cooperative Information Report 61. Washington, D.C.: U.S. Government Printing Office.
“Co-op Essentials: What They Are and the Role of Members, Directors, Mangagers, and Employees.” U.S. Department of Agriculture Rural Business – Cooperative Service, Cooperative Information Report 11. Retrieved from http://www.rd.usda.gov/files/publications/CIR%2011%20%20Co-op%20Essentials.pdf