Management

Manipulation of RESOURCES to achieve the

objectives.

7 Ms of Resources:

1. Money
2. Machine
3. Men
4. Market
5. Materials
6. Measurement
7. Methods
Management

The process of getting activities completed

efficiently and effectively with and through
other people
Organizational Structure of Cooperative
Cooperative organizational structures and management are
based on shared governance and democratic principles1. Key
components of cooperative structures include:

1.Member ownership and control: Cooperatives are owned and

operated by their members.

2.Democratic decision-making: Members have a say in the

organization's decisions.

3.Shared benefits and responsibilities: Cooperatives serve the

needs and interests of their members.

4.Different types of cooperatives: These can be centralized,

federated, or mixed
Organizational Structure
Composition of the General Assembly

The General Assembly shall be composed

of such members who are entitled to vote
under the Articles of Cooperation and By-
Laws of the cooperative.
Powers of the General Assembly

The General Assembly shall be the highest

policy-making body of the cooperative. The
general assembly shall have the following
powers:

• To determine and approve amendments to

the articles of cooperation and by-laws.
• To elect or appoint the members of the board
of directors, and to remove them for cause.
• To approve developmental plans of the
cooperative.
Meetings

A regular meeting shall be held by the general assembly

on the date fixed in the by-laws, or if not so fixed, on any
date within ninety (90) days after the close of each fiscal
year. Provided, that notice of regular meetings shall be
sent in writing, by posting or publication, or through
other electronic means to all members of record.

Whenever necessary, a special meeting of the general

assembly may be called at any time by a majority of the
board of directors or as provided for in the by-laws.
QUORUM

A quorum shall consist of at least twenty-five

percent (25%) of all the members entitled to
vote.

VOTING SYSTEM

Each member of a primary cooperative shall

have only one (1) vote. (one man-on vote policy)
General Assembly Resolution

• Development Plan
• Annual Plan and Budget
• Acceptance of AFS
• Hiring of External Auditor
 Section 7. Order of Business

As far as practicable, the order of business of a

regular general assembly meeting shall be:

o Call to order;
o Declaration/consideration of presence of
quorum;
o Reading, consideration and approval of
the minutes of the previous meeting;
o Presentation and approval of the reports
of the board of directors, officers, and the
committees, including audited financial
statements of the Cooperative.
o Unfinished business;
o New business;
o Election of directors and committee
members;
o Approval of Development and/or annual
plan and budget;
o Hiring of External Auditor;
o Other related business matters;
o Announcements; and
o Adjournment
Direction and Management of the Affairs

The direction and management of the affairs of

a cooperative shall be vested in a board of
directors which shall be composed of not less
than five (5) nor more than fifteen (15) members
elected by the general assembly for a term fixed
in the by-laws but not exceeding a term of two
(2) years and shall hold office until the
successors are duly elected and qualified, or
until duly removed for a cause.
Powers of the Board of Directors

The Board of Directors shall be responsible for

the strategic planning, direction-setting and
policy-formulation of the cooperatives.
Qualification

Any member of a cooperative, who has the right to vote

and possess all the qualifications provided in the by-
laws shall be eligible for election as director.

The members of the board of directors shall not hold

any other position directly involved in the day to day
operation and management of the cooperative.

Any person engaged in a business similar to that of the

cooperative or who in any way has a conflict of interest
with it, is disqualified from election as a director of said
cooperative.
Meeting of the Board and Quorum
Requirements
Regular meetings of the board of directors shall
be held at least once a month.

Special meetings of the board of directors may

be held at any time upon the call of the
chairperson or a majority of the members of the
board.

A majority of the members of the board shall

constitute a quorum for the conduct of business.

Directors cannot attend or vote by proxy at

board meetings.
Vacancy in the Board of Directors
Any vacancy in the board of directors, other
than expiration of term, may be filled by the
vote of at least a majority of the remaining
director.

Otherwise, the vacancy must be filled by the

general assembly in a regular or special meeting
called for the purpose.

A director so elected to fill a vacancy shall serve

only the unexpired term of his predecessor in
office.
Officers of the Cooperative

The board of directors shall elect from among

themselves the chairperson and vice-
chairperson and elect or appoint other offices of
the cooperative from outside of the board.

No two (2) or more persons with relationships

up to the third degree of consanguinity or
affinity nor shall any person engaged in business
similar to that of the cooperative shall serve as
an appointive office.
Officers of the Cooperative

The officers of the cooperative shall include:

• Members of the board of directors

• Members of the different committees
created by the general assembly
• General manager
• Secretary
• Treasurer
• Other positions as maybe provided for in the
by-laws
Committees of Cooperatives
The By-Laws shall provide for the creation of the
following committees:

1. Audit Committee – elected by GA

2. Election Committee – elected by GA
3. Mediation and Conciliation Committee –
appointed
4. Ethics Committee – Appointed by BOD
5. Education Committee – Appointed by BOD
6. Other Committees as may be necessary for
the conduct of the affairs of the cooperative
(ex. Credit Committee)
Implementation of the Training
Requirements for Cooperative Officers
To rationalize the implementation of Rule 7 of
the Implementing Rules and Regulations of RA
9520.

MC 2013-02 | Supplemental Rules on the

Training Requirements of Cooperative Director,
Officers and Committee Members.

Inclusion in the election guidelines that require

all officers to comply with the mandatory
trainings and person responsible to ensure
compliance thereof.
Removal of Elected Officers
All complaints for the removal of any elected
officers shall be filed with the board of directors.

Such officer shall be given the opportunity to be

heard. Upon finding of a prima facie evidence of
guilt, the board shall present its
recommendation for removal to the general
assembly.

An elective officer may be removed by ¾ votes

of the regular member present and constituting
a quorum, in a regular or special general
assembly meeting called for the purpose.
Strategic Plan Preparation

❑ Development Plan (DP)

❑ Annual Plan
❑ Social Development Plan (SDP)
❑ Education and Training Plan (ETP)
❑ Succession Plan (HRD Plan)
Note:
- Annual Plan is lifted form the
Development Plan
- SDP and ETP can be incorporated in the
DP
Board Resolutions

▪ Oversight functions
▪ Performance evaluation/appraisal
▪ Election guidelines
▪ Distribution of net surplus (Rate of Interest
and Patronage Refund)
▪ Provisions and funding for statutory reserves
▪ Utilization of statutory reserves
▪ Provisions of funding for Retirement fund
Policy/Board Resolutions

▪ Monetary benefits (Performance Bonus, 13th

month pay, SSS, PhilHealth, Pag-Ibig)
▪ Non Monetary Benefits (Rice subsidy,
uniforms)
▪ Membership subscription of capital
▪ Compliance limitation of shares
▪ Deposit for share capital subscription
▪ Issuance of ISC/PR
Policy/Board Resolutions

▪ Conflict management – officers, employees,

members
▪ Associate members
▪ Laboratory cooperatives
▪ Subsidiary cooperatives
Compensation

In the absence of any provision in the by-laws

fixing their compensation, the directors shall not
receive any compensation except for reasonable
per diems
General Manager
The General Manager shall:
i. Oversee the overall day-to-day operations of
the cooperative by providing general
direction, supervision, management and
administrative control over all the operating
departments subject to such limitations as
may be set forth by the BOD or the GA;
ii. Formulate and recommend in coordination
with the operating departments under his/her
supervision, the Cooperative’s Annual and
Medium Term Development Plan, Programs,
and Projects, for approval of the BOD and
ratification of GA;
General Manager
The General Manager shall:
iii. Implement the duly approved plans and programs of
the cooperative and any other directive or instruction
of the BODs;
iv. Provide and submit to the BODs monthly reports on the
status of the coop’s operation vis-à-vis its target and
recommend appropriate policy or operational changes,
if necessary;
v. Represent the cooperative in any agreement, contract,
business dealings, and in any other official business
transaction as may be authorized by the BODs;
vi. Ensure compliance with all administrative and other
requirements of regulatory bodies; and
vii. Perform such other functions as may be prescribed in
the By-Laws or authorized by the GA.
THANK YOU!
Functions of Management
PLANNING. Devise short range and long-range
plans and set goals to help achieve the plans

ORGANIZING. How to use the resources.

STAFFING. Choosing the right person for the

job.

DIRECTING. Guiding the employees to perform

their work.

CONTROLLING. Monitoring progress towards

goals.

✓ Get the job done on time

✓ Within the budget
✓ Satisfactorily using available resources
Managerial Skills

• Conceptual
• Design (Technical)
• Human
• Decision-Making
• Problem-Solving
Managerial Skills
TOP LEVEL:

Conceptual/Design

MIDDLE LEVEL:

Design/Human Skills

FIRST LINE

Operations
Conceptual Skills
Ability to see the ‘Big Picture’, to recognize and
understand the significant elements in a
situation.

Creation Phase:
• Establish positive thinking
• Develop creative ideas
• Combine
• Refine
• Re-arrange
• Simplify
Technical Skills
Knowledge of and proficiency in activities
involving methods, processes, and procedures.

• Development of your technical skills as an

integral part of your personal
development.

• Strong technical skills can save you time

and increase income.
Human Skills

Ability to work with people. Creation of an

environment in which people feel secure and
free to express their opinions.

• HR is the most important career skill.

• One’s ability to get along is the single

most important factor affecting chances of
success in the workplace.
Decision Making Skills
Ability to solve problems that will benefit the enterprise. Also
ability to design a workable solution to the problems and to
avoid them in the future.

Simple Tips:
• Get all the facts
• Weigh
• Decide
• Act

Post Implementation:
• Monitor
• Verify results
• Document
• Celebrate success
Problem Solving

PREVENTION PRINCIPLE

Solve the problem at the source.

Live by the 1 – 10 – 100 rule

PRACTICE PRINCIPLE

A collaborative approach to discourse and

decision-making that cultivates relationships,
honors individuals perspectives, and teamwork.
Lately in Public Administration

Managerial Functions

1. Planning
2. Organizing
3. Staffing
4. Directing/Influencing
5. Coordinating/Reviewing
6. Budgeting
Level of Management
The Five Basic Parts of an Organization

High Level
(Strategic)

Long-range
view Planning
The Five Basic Parts of an Organization
Middle Level
(Tactical)

Responsible for
working out
strategies and
plans to
implement
decisions and
policies made
by top level
manager.
The Five Basic Parts of an Organization
Low Level
(Operational)

Supervisor
directing and
controlling.
Responsible for
ensuring work
is done
according to
plans.
Task Assignment and Planning
Workers

People who work directly on a job or task and

have no responsibility for work of others.
Managerial Functions
Managerial Roles

1. Interpersonal Roles (figurehead, liaison,

leads)

2. Decision Maker (entrepreneur, disturbance

handler, resource allocator, negotiator)

3. Information Roles (monitors, disseminator,

spokesperson)
THANK YOU!
NATURE OF CO-OPERATIVES
Origin and Acts of Mutual Assistance

Co-operatives action takes place when

individuals pool their resources together
which are often meager in an effort to
obtain what is needed by all but can not
be obtained by the use of an individual’s
resources, talents, time, information or
effort
Traditional Societies

Traditional societies, existed customary

arrangements for securing assistance
from neighbors on these occasions.
Advanced Forms of Traditions

It developed various patterns of mutual

assistance, reduced them to custom, and
handed them down as tradition and as a legacy
from the past through formal and informal
education.
Extension of Mutual/Traditional
Assistance to Formal Co-operative

Modern co –operation developed from these

traditional forms of cooperation. The co- operative
actions are based on voluntary agreements by the
individual actions. This voluntarism is the main
tenet of modern acts of co-operation.
General Rule

Co-operative can be any form of two or more

persons working together to achieve one goal or
the other, which can be permanent or adhoc or
even a one time act.
Nature of Cooperative

Co-operative from a limited perspective

is also often used to mean the activities of
a specific form or organization: the co-
operative.
In a Different Perspective

The word co-operative can also be used as an

adjective. From the point of view of looking at
co –operation as specific formal organization, a
study of co –operation is a study of the
institution and its activities.
Co –operatives as Non–Profit making
Organization

The underlining force behind them is not for

making profit. That is to say, the primary
objectives for the formation of a co –
operative society is not for profits unlike the
private entrepreneurs. The entrepreneurs
establish businesses for the sole purpose of
making profit.
Co- operatives on the other hand are business
organizations of patrons whose motive is to
obtain goods and services they require at cost
through their joint undertaking. Consequently,
co –operators combine in themselves the
functions of owners and users.
The Owner-User Nature of Co-Operative

The buyer becomes the seller, the

borrower becomes the lender, and the
tenant becomes the landlord and so on.
Patron is the Owner

He must be the controller of the Co-operative.

This is necessary so as to ensure the quality of
service that is needed and to avoid all forms
exploitation. That is why there is broad base
control or democratic control by members
(patrons).
Economic Results

Commonly referred to in co–operative

business as surplus are shared by members
in proportion to the volume of business
each member does with the co-operatives.
explanations of self – help organization and
“Traditional Co-operatives”

Traditional co –operatives refer only to the

historical co-operatives models such as the
Rochadale Equitable pioneer, which is the first
cooperatives organization in the whole world
and established in 1844 in England.
Traditional Co-operatives

Sometimes confusion arises in the mind of the

students as to the difference between self – help
organizations, which are also known as traditional
co-operatives institutions and “traditional co-
operatives”
What formal co-operative is?

Formal co-operative is not ad- hoc. It comes into

existence when individuals or economic units
whose means are limited freely act together to
overcome this limitation by pooling such limited
resources to accomplish common objectives
through the formation of a cooperative society.
Capital is contributed equitably and the
members run the enterprise democratically.
They will also agree to share the risks as well as
benefit in proportion to the participation and
patronage by members in the business.
 Comparing formal co-operative with
self – help organizations
1.) A co-operatives society is a business entity.
As such the management concepts, techniques
and principles are applied which may not be
emphasized in a self - help organization.
2.) The co- operatives are owned by members.
The capital invested in the business is for
members who have taken the risks of
investment. There is no such risk in self – help
organizations.
3.) The co-operative is controlled by members by
takings major decisions affecting the business.
Members delegate whoever carries out activities
in the co-operative,. The committee members or
what is sometimes called board of directors are
elected by the general members and delegated
to mange the business. All these may not be
applicable in a self – help organization. An
opinion leader in a self – help organizations may
be taking major decisions that a project needs to
be executed without much consultation.
4) Co-operative is voluntary; the decisions to
join in cooperatives is freely made by the
individual. Members, who so desire are also free
to withdraw as long as they fulfill all agreements
to the business. This is not applicable in a self I
help organization.

5) Members accept risks and benefits. They buy

shares in the cooperatives and expect to get
benefits if the co-operative succeeds; but if it
fails they lose their investments; there is no
such investment ands risk in self- help
organization
6) A co-operative is a long term concern, that is,
it outlives its founding fathers. That is why the
sustainability in co-operative is higher than that
of self – help organization, some of which
operates on ad –hoc basis.
7.) There are definite rules and regulations governing
cooperatives as spelt in the co-operatives Decree of 1993,
the cooperatives laws of the various states of the
Federation and by laws of each co-operative organization.
But many self –help organizations are based on rules that
are simple and are not necessarily reduced to contractual
agreements. They fit into the normal behaviors of the
community. They are capable of being modified depending
on the changing circumstances and environment, which
may result with the development of the group or
community.
8) The process of registration of a co-operative is
more rigorous than that of self – help
organization.
Area of similarities between modern co-
operative and self – help organizations:

1. Individuals that form a co-operatives share

identical interest (s) or goals (s). The same
can be said of self – help organization. It is
the pursuit of such identical purpose that
brings them together.
2. Roles exist in both self – self organization
and formal co- operation. Members must
play these roles. The proper execution of
these roles will enhance the attainment of
objectives.
3. Values are also shared by groups’ members.
Theses values are general agreement
emphasized as positive or negative, that is, the
“dos” and “don’ts” which are reflected in the
constitution.
4. Communication exists in the groups. This
includes communication between one individual
and the other as well as between one individual
and the organization.
5. Members of both organizations may enjoy a
common identity. The identity separates
members of an organization form other
organizations. Such identity’s include:
recognized names, an identical or peculiar
mode of dressing among others.
THANK YOU!
 DEFININTION OF A
CO-OPERATIVES AND THE
ANALYSIS
In attempting to say what a co-operatives
organization is by way of definition, two major
ways will be followed, these are:

a) Essentialist Approach.
b) Nomalist Approach
Essentialist approach to co-operative

It discusses the challenges of defining co-operatives

based on shared values, ideologies, and economic and
social goals. It highlights that these elements vary across
different economic systems where diverse values and
long-term goals are emphasized by various actors. Co-
operatives exist in all economic systems—capitalist,
socialist, and welfarist—making it difficult to create a
universal definition that encompasses the unique
aspects of each system. An essentialist approach to
defining co-operatives is deemed inadequate, as what is
considered essential can differ significantly between
systems, hindering comprehensive analysis and
recommendations.
Nomalist approach to co-operative

Looking at the nominalist approach it attempts

to select structural elements of organization
present to all institutions, which claim to be co-
operatives in any economic system and sector.
This is why it is readily accepted. The structural
elements, which are readily emphasized, are:
1) Individuals or persons who operate their private businesses
or who operate their households and are unified by a
common goal.
2) Joint action by a group, which attempt to attain group goal
through economic betterment of the group such as mutual
help.
3) A jointly owned long term/ permanent business enterprise
as a channel through which goods and services are produced.
4) A special promotional relationship between the members’
private businesses of household and the co-operatives
enterprise which is saddled with the responsibility of
promoting member’ welfare by making its goods and service
directly available to the members (as customers’ or in social
case of productive co-operative, as employees).
An example of essentialist approach to the
definition of a co-operative could be that “it is
an association of socially weak persons trying to
achieve certain social aims within the frame
work of an enterprise open to all and based on
the rules of solidarity and democracy, it instills
ideas of mutual help and social responsibility as
part of a new ideal society.
An example of nominal definition

“A co –operatives is an association of persons

usually of limited means who have voluntarily
joined together to achieve economic end
through the formation of a democratically
controlled business organization making
equitable contribution to the capital required
and accepting a fair share of the risks and
benefits of the undertakings.”
Analysis of the nominal definition
Association of process: A Co – operatives Society is
an association of persons, who are ready to work
together, understand themselves, ready to solve
their problems jointly and socially fit to associate
with one another. This is not to say that a co-
operative society should be an association of armed
robbers, thieve, and fraudsters among others.

Limited means: Those persons that join together are

usually of limited means, but not beggars. They must
be willing to make capital contributions to the
society.
Voluntarily joined together: Individuals are not forced to join a Co-
operative. The decision to team up with others to form the society
rests with every individual. If people are interested to join Co-
operatives through some inducement such as money by
government or any other institution as soon as the inducement is
no longer forthcoming, members’ interest will go down and that
starts the beginning of the end of that society.

Achieve a common Economic: End The major aim of a Co-operative

is to achieve economic goals, which include making profit or
surplus. In co – operatives gathering, profit is regarded as surplus.
Other goals include: the ability of members to make more money,
buying of goods cheaply, getting loans with little interests for
productive purpose amongst others.
Democratically controlled: This means that the Co-
operatives business is controlled by members
themselves through one man, one vote on any
decision affecting the Co-operatives. No mater the
status of any member in the community or the
amount of his/ her money invested into the business
he / she is only excepted to vote once on any issue
that requires voting.

Business organizations: A Co- operative is business

entity and not humanitarian organization. Business
concepts, techniques and principles are brought to
bear in the Management of Co- operatives.
Equitable contribution to the capital: Since a co-
operative is a business venture, equitable contribution
is expected by all members including intending
members.

Accepting a fair share of the risks and benefits: Every

member participates in the management of the Co-
operatives so that at the end of the year, through
efficient management, surplus can be made. If this is
the case, each member will have a fair share of the
surplus depending on how such members has
patronized the cooperatives.
CO-OPERATIVE AND OTHER
FORMS OF BUSINESS
Types of Business Organizations

Sole proprietorship

This is a one – man business. He finances

the business alone, takes all the decisions
and the success and failure of the business
are squarely on his shoulder. It is not
restricted to the sole trader who hawks his
wares about.
Types of Business Organizations
Partnership business

This is an improvement on the sole

proprietorship. A least two persons must comer
together to establish this business. They pool
their resources together such as talents, skills,
knowledge, finance, and time in order to carry
out the business. More funds made available two
goods heads are better than one. Risks are
proportionately shared among the owner of the
business unlike the sole proprietorship who caries
all the risks associated with his business.
Types of Business Organizations

Private Limited Companies

Most private limited companies started as a

family business. Eventually other individuals were
invited to buy shares and become co-owners of
the business. There is better financing in this type
of business compared to partnership. Also profit
declared which is the major aim for forming such
business is shared according to the number of
share each shareholder is having. Hired manager
are employed to run such business.
Types of Business Organizations

Public Limited Companies

These are big organizations whose shares

are publicly quoted in the Stock Exchange.
Well - trained mangers are usually
employed to run such organizations. Profit
motive is the major force for establishing
such businesses.
Types of Business Organizations
Public Corporations
These are organizations usually established by
Government through Act of parliament and similarly
authority. They are usually formed because:

▪ If left to private individuals, they may not be able to

finance them;
▪ If owned and managed by private persons, they may
exploit the masses;
▪ Private persons may make abnormal profit if they are
allowed to establish such organizations, among other
reasons.
Criteria for comparing Co-operatives and
other business
Ownership - This addresses the issue of who can be
the owner of the business. This means that there must
be certain conditions that should be fulfilled before
somebody or a group of persons or an organization can
lay claim to such a business entity.

How much can an individual own? - This is

another important criterion because in some businesses
as we shall soon see, there is restriction to the amount
an individual can own, while in others there is no such
restriction.
Transfer of ownership - What will be the
basis, under which ownership is transferred from
one person to the other, varies from one form of
business to the other.

Control - Controlling the business is of high

importance such as taking such decisions as to
who becomes a member of the board, the
requirement for voting, how many votes per
voter and who mangers the organizations need to
be carefully considered.
5) Benefits - Here, issues concerning why net
income is generated, who can be patrons of the
business, , how is income so generated is distributed,
among other issues, are looked upon.

6) Guiding rules for accepting a transaction

7) Size of Board of Directors

Business Objectives

Nature of business objectives

An objective is an end in view, that is, it concerns the future

activities of a business organization. Once an objective has been
formulated, resources must be put in place so that the objectives
can be realized. But business objectives must have the following
features:
• Specific and well defined
• Measurable, that, some quantitative figure should be
out there;
• Action oriented;
• Realistic ; and
• Timely.
Common Objectives

• To make profit

• To produce or provide good quality product or

service at affordable price;

• To keep on surviving;

• To have good quality workers;

• To be leader in the industry etc.

 Co- operatives business versus Non – Co-
operatives business
Criteria Non Co-operative Co-operative
Ownership Anybody who is able to buy Generally restricted to those who
shares of common stock. qualify for membership e.g. those
a) Who can be an owner of the Some firms such like with common
business partnership the other economic interest and are able to
conditions are having good buy the minimum share.
b) How much can an individual skill and being 'well
own? connected. The cost of a minimum share
applicable to all members.
c) Transfer of ownership No limit except the money
cost of one share of common
stock; some firms may vary
the conditions.
Control Shareholders All members who
are paid the entrance fees and /
a) Who is allowed to vote on the Must own stock or own the minimum share.
selection Board of Directors?
One vote per share. This Must meet the qualification
b) Requirement for voting means that a voter with many
shares will have as many Usually democratic, that is one
c) How many votes per voter? votes as his share. member one vote.

d) Who managers the organizations? The board of Directors The committee members or Board of
elected by shareholders Directors elected by members.
 Co- operatives business versus Non – Co-
operatives business
Criteria Non Co-operative Co-operative
Benefits For distribution to For distribution to member-
shareholders in return for their owner on the basis of their
a) Why is net income investments (share) transactions with the co-
generated? operative. Member – owners
Not restricted patronize
b) Who can be a patron of the
business? i. Interest payment to investor
is a priority
c) Distribution of net income ii. Pays taxes according to
(profit or surplus) taxations law.
iii. Allocation is made to
reserves

Guiding rules for Do business if individual Do business if total benefits to

accepting a transaction benefits are greater than individuals and co operatives
individual costs. The are
emphasis is to make money greater than individuals total
from investment. costs to individuals and co-
operatives
THANK YOU!
 True or False
1.The essentialist approach emphasizes structural elements
common to all co-operatives.
2.A public corporation is usually established by the government.
3.The nominalist approach focuses on the specific practices of
individual co-operatives.
4.A private limited company is owned by the government.
5.The main difference between the essentialist and nominalist
approaches lies in their focus on shared values.
6.A partnership business is owned by at least two people.
7.Profit maximization is the only objective of a business.
8.A sole proprietorship is owned and managed by one person.
9.Benefits refer to the distribution of profits or surplus.
10.Ownership refers to who can be the owner of the business.
 BOARD
AND
MANAGEMENT
Task of Board and Manager

Both the Board and the Manager are part of the

overall management of the cooperative.
However they are separate and complementary
parts of the overall management structure. For
each to be effective they must understand their
own role and responsibility and that of the other
party and should not interfere in each other’s
areas of decision-making.
Decision Areas

Because of the growth of cooperatives today,

these enterprises are becoming very complex to
operate and manage and as such require people
who subscribe to sound governance practices.
As a consequence, government agencies are
now imposing fit and proper conditionality for
elected officers and management to follow
when managing a cooperative.
Roles, Skills, and Training
Proper fulfillment of the roles of Manager and Board
members are crucial to the success of the
cooperative. For that reason they should all recognize
that they have major responsibilities to ensure
success of the cooperative.

Each Director should have a brief description of

his/her job, just like a staff member. When a new
person joins the Board, he or she should be oriented
to his/her responsibilities just as any new staff
member. It is the responsibility of the Chairperson to
see that this is done.
A Board member and a Manager require
particular skills. It should never be assumed that
either one comes to the helm of the cooperative
with the necessary skills set. If external training
is not possible, then advice should be sought
from experienced persons, either former Board
members of the cooperative or people who have
profound understanding of how a Board of a
cooperative works.
To effectively operate and manage a cooperative,
Board and Committee members and senior
management should seek to acquire or develop the
following skill set:
• Credit risk management;
• Investment management;
• HR Management;
• Operations Management;
• Accounting;
• Marketing and Sales;
• Governance;
• Risk management;
• Communication; and
• Leadership skills.
Responsibilities and Skills of Board
Members
• Ensuring the organization’s financial viability;
• Articulating the mission, vision and values;
• Setting the strategic direction;
• Setting overall direction of the cooperative and approving the policy guidelines
to be observed by management;
• Approving the Annual Work Plan, Budget and Organization Chart of the
cooperative;
• Ensuring that competent and appropriately qualified people are appointed as
managers and that they are adequately instructed about the overall directions
and guidelines fixed by the Board;
• Ensuring that the cooperative is properly managed by monitoring management
actions and keeping up-to-date with the cooperative’s affairs;
• Attending regular Board meetings and contributing to the Board’s deliberations;
• Facilitating a cordial relationship between the cooperative and the Regulator;
• Being able to read and interpret / analyze financial statements; and
• Identifying and strengthening the skills section that needs to be developed.
Monitoring Function
• Ensuring the cooperative is able to meet liabilities;
• Following up on decisions taken;
• Ensuring that adequate financial control systems are in
place;
• Ensuring legal requirements are met (including Annual
Reports,
maintenance of records, Audited accounts);
• Establishing that proper reporting and accounting
standards are adopted;
• Assessing and monitor management performance
against demanding
standards;
• Confirming that members are properly informed; and
• Ensure cooperative is meeting expectations of other
interest groups
Monitoring Function
• Ensuring the cooperative is able to meet liabilities;
• Following up on decisions taken;
• Ensuring that adequate financial control systems are in
place;
• Ensuring legal requirements are met (including Annual
Reports,
maintenance of records, Audited accounts);
• Establishing that proper reporting and accounting
standards are adopted;
• Assessing and monitor management performance against
demanding standards;
• Confirming that members are properly informed; and
• Ensure cooperative is meeting expectations of other
interest groups
Contribute to Cooperative Performance
• Appoint and replace senior management;
• Ensure a management succession plan is in place;
• Contribute skills, experience and knowledge to Board and
cooperative;
• Help bring the cooperative into contact with wider networks;
• Maintain good relations with members and the community;
• Contribute to results-based strategic planning ;
• Provide an objective view of proposals and plans;
• Help management to identify opportunities, anticipate problems
and develop strategies;
• Criticize constructively to ensure full debate of issues affecting the
cooperative;
• Question and challenge management and Board when necessary;
• Serve as an active team member – involved, informed, interested,
loyal and committed; and
• Continually learn and improve
Protect Members’ Interest

• Ensure that money is managed prudently by

providing proper guidelines and limitations
• Balance appropriate levels of risk and caution
• Take care to ensure that cooperative activities
increase and grow funds rather than diminish
them; and
• Ensure two way communications with
members so that the Board is always
aware of changing member needs and priorities
(make no assumptions!)
Questions a Board member should be
asking:
• Is this proposal in the best interests of the cooperative as a whole?
• What do our members need and expect from the cooperative - have needs
changed?
• Do we have the best people we can get to manage the cooperative?
o Are we paying enough to attract the best talent?
• Do we have the skills and expertise around the table to make effective decisions?
• Can we afford to pay our debts?
• Do I need additional information/input in order to make a decision on this issue?
• Do I have a conflict of interest on this issue?
• Is the Board fully aware of its legal duties and obligations on this issue?
o Can we access expert opinion?
• What are the risks and what are the benefits of this proposal?
• Does this proposal help the cooperative meet long term objectives?
• Why is this proposal recommended?
• Does the Board need to take action on this issue?
• Can I have additional information?
• What potential issues or problems may arise?
• How can we find a solution to these problems?
• How can I help?
• Have we met all our legal obligations?
What things get in the way of good
performance?
Directors must ensure that they devote
adequate time to serving and looking after the
affairs of the cooperative on behalf of the
members. While Directors are expected to
function as a Team, an individual Director may
express an opinion different from that of other
Directors if he/she strongly believes that it is in
the interest of the cooperative as a whole. Even
if colleagues on the Board may disagree with
him/her and his/her point is ruled out, he/she
should still insist that the dissenting opinion be
recorded in the minutes.
Some common behaviors that inhibit the
efficient performance of a Director:
• Failure to get an overview of the cooperative’s objectives, organization and functions;
• Becoming over involved in management issues;
• Spending too much time on minor issues better left to management (for example
interference
with the technical aspects of the Managers work);
• Not doing one’s homework or agreed actions (being unreliable);
• Not observing the proper procedures and etiquette of the Board;
• Acting as an individual instead of a member of a team;
• Not making any effort to resolve conflicts when they occur within the cooperative or
between
the cooperative and other parties;
• Feeling too shy to speak out or air disagreement;
• Being intimidated by a strong-willed and vocal Board member, Chairperson or Manager;
• Letting personal interests interfere with good judgment on cooperative issues;
• Underestimating the skill required to manage the cooperative and not being willing to pay
for
those skills even when the cooperative is able to do so;
• Pretending to understand or grasp a concept or issue when he/she does not making,
including not making the effort to find out more about an issue;
• Not listening;
• Thinking that members do not or cannot understand Board decisions;
• Not 'selling' the cooperative; and
• Not willing to learn and improve.
Some of the common dilemmas for
Directors
• Incurring debts that the cooperative cannot pay because the
Board does not understand financial management;
• Not managing the finances well to ensure that assets are
protected, suitably controlled and that they grow;
• Not declaring or avoiding conflicts of interest;
• Not able to interpret information from management and failing to
ask for explanations;
• Not able to interpret financial statements/records;
• Not preparing oneself for Board meetings;
• Not asking questions when unsure or not communicating with
members, Managers, other Directors, and stakeholders;
• Interfering with the manager's work; and
• Not reading reports and minutes.
Responsibilities of the Chairperson

Primary Function

The Chairperson of the Board of a cooperative is

primarily responsible for the leadership of the
Board of Directors.
Board Assessment

Building an effective cooperative board is a

continuous process of recruiting, training and
self-assessment.

The most effective boards are:

• Those whose members are deeply committed
to the cooperative’s mission;
• Members who bring expertise in key areas;
• Members who represent diverse points of
view;
• Evolve over time through careful planning.
Board building is a dynamic process and
can involve the following areas:

• Identify the needs of the board: the skills,

knowledge, perspectives;
• Cultivate potential board members;
• Recruit prospects to stand for election;
• Orient new Board members;
• Engage all Board members
• Educate the Board by providing pertinent
information;
• Rotate Board members – establish term limits; and
• Evaluate the Board as a whole and on an individual
level.
Board assessment can take many forms. The
cooperative can use any one of the following
to conduct the assessment:

• Board’s self-evaluation: All board members

participate;
• Peer evaluation;
• A committee of the board;
• A non-board committee; and
• Outside consultant.
Fit and Proper to serve

Cooperatives are mutual organizations in that

they are run and managed by members on
behalf of members. Notwithstanding the
mutuality concept, Board and Management
operate a fiduciary role to seek after the interest
of the cooperative. This ensures that people
who have been entrusted with leadership roles
in the cooperative must be fit and proper to
hold the particular positions.
Specifically, the cooperative may wish to consider the
following in determining fitness and propriety
of the person:

• Previous conduct and activities with his business or financial affairs;

• Whether the person has been convicted of an offence involving fraud or
other dishonest act;
• Whether the person has been convicted for violence;
• Whether the person is delinquent with his financial obligations,
bankrupt;
• Whether the person is in involved in unscrupulous business ventures;
• Dishonest employment track record; and
• Consideration of information that would cast doubt as to one’s
competence and soundness
of judgment
THANK YOU!