Author: Chris Peterson, Michigan State University, peters17@msu.edu
The fundamental principles of cooperatives clearly indicate that members use and own the cooperative. The user role does not entail anything more than normal patronage of any business. If you buy from the cooperative (or any other type of business), you need to pay for what you buy, or if you sell to a cooperative (and/or other type of business), the cooperative needs to pay you. There is nothing unusual or unique about …
Author: Chris Peterson, Michigan State University, peters17@msu.edu
Every cooperative has to struggle with the proper balance between cooperative-level profits (net income and patronage refunds) and member-level profits. Some suggestions can be made to guide these key cooperative financial decisions.
(1) Cooperatives should attempt to create a significant amount of their returns at the cooperative level. The ability to more objectively measure these returns provides the motivation for this recommendation. The subjectivity of measurement and variability of return evaluation makes reliance …
Authors: Phil Kenkel, Oklahoma State University, phil.kenkel@okstate.edu, and Bill Fitzwater,
Oklahoma State University
Key performance areas (KPAs) are the few factors that greatly influence a business’ success. The number of KPAs depends on the company and the industry. One of the difficult tasks of the board is to identify (with the manager’s assistance) those areas in which performance vitally affects the success or failure of the firm. Some potential KPAs for agricultural cooperatives include:
Authors: Phil Kenkel, Oklahoma State University, phil.kenkel@okstate.edu, and Bill Fitzwater,
Oklahoma State University
The board should also analyze the strengths and weaknesses of the firm. Is the cooperative serving its customers? Few firms can afford to provide all of the services customers might want. Not all service needs of customers are unreasonable, however. Many increased services are sound business practices. The board should routinely make independent inquiries to determine that customer services are adequate. Some specific areas for assessment include: …
Authors: Phil Kenkel, Oklahoma State University, phil.kenkel@okstate.edu, and Bill Fitzwater,
Oklahoma State University
Authors: Phil Kenkel, Oklahoma State University, phil.kenkel@okstate.edu, and Bill Fitzwater,
Oklahoma State University
The chairman has a special role in the voting procedures of the board. The chairman is responsible for enforcing good decorum in the board room. He may appoint committees or decide points of order.
Voting by the chairman is a sensitive issue in many cases. According to Robert’s Rules of Order, the chair can make motions, speak on one side or the other on every motion, and …
Authors: Phil Kenkel, Oklahoma State University, phil.kenkel@okstate.edu, and Bill Fitzwater,
Oklahoma State University
Some balance is needed between individual discretion and formalized measures of performance. The greater the professional competence of the manager or staff involved, the more decentralized the decision-making process can be. Therefore, different types of controls are needed at different levels of the organization. Board members and managers must communicate, discuss and attain a high level of commitment to the goals and objectives of the organization. The …
