The day-to-day business operations of a cooperative are for the most part no different than any other business, but one of the key differences is that people who patronize the business play an active role in its governance.  Cooperatives are democracies, and they are dependent upon the active participation of its members. 

There are three agents or groups involved in the management of the cooperative: members, the board of directors, and manager.  For a cooperative to have the best chance to optimally serve its members, each of the groups needs to understand and perform their responsibilities.  Responsibilities for each include the following: 

Members

• Participate in the selection of the directors;

• Adopt Articles of Incorporation and Bylaws;

• Keep informed about the co-op;

• Serve on co-op committees;

• Patronize the co-op; and

• Provide necessary capital.

Board of Directors

• Represent members;

• Establish cooperative policies;

• Hire and supervise management;

• Oversee acquisition and preservation of cooperative assets;

• Assess the cooperative’s performance; and

• Inform members.

General Manager

• Oversee the day-to-day operations of the cooperative;

• Implement policies;

• Hire, fire, and train employees;

• Inform board of directors of the business activities;

• Confer with board on need and development of new policies; and

• Maintain accounting system and develop operating budgets.

Cooperative Governance Structure

A cooperative is only as good as its members ask it to be.  For a cooperative to serve its members, it is vital that its members play an active role in the co-op and understand its key responsibilities.  When members are not active participants, the co-op runs the risk of not serving its members and of being viewed by members as simply the business “where I sell my grain” or “where I buy my fertilizer” instead of having a sense of ownership and pride in its operations. 

For assistance in developing a cooperative or developing training for the board of directors, contact us today at 859-550-3972 or via email at kcard@kcard.info.