Current Light Flashes

Over the last several months, I've provided you the general manager's, employees', and board of directors' responsibilities. This month I will discuss the member-owners' responsibilities.

Member-Owners: Members are the foundation of the cooperative business. They organized it and their needs are the reason for its existence. Their support, through patronage and capital investment, keeps it economically healthy. And, their changing requirements shape the cooperative's future.

Responsibilities:

• Patronize the cooperative. Members must make a conscious decision to be committed to the cooperative and maintain that commitment even when short-term prices or services may be better elsewhere, or competitors make more attractive offers. If members do not want to use the cooperative, the need for it must be re-examined.

• Be informed about the cooperative. To carry out their responsibilities, members must know what the cooperative is, what it can do for them, its purpose, policies, and the issues it faces. They can obtain information through annual reports and newsletters, and from talking to the manager, staff, directors, and other members. To effectively exercise their right of ownership, a member needs a good understanding of the present situation and projected future operations.

• Participate in selecting and evaluating directors. As owners, members assume a positive, broad role in the cooperative's management. Although the cooperative is a user/owner (democratically) controlled form of business, members cannot make all the decisions directly. Other members select from among their peers, the individuals with the best judgement and business management skills to represent them in as the cooperative's board of directors. This is definitely one of the most important responsibilities. Selecting the most popular or least controversial person is not the wisest choice for this job. Members need to study carefully the strengths and weaknesses of the cooperative and determine how the leadership skills of the candidates address them. Loyalty, integrity, the ability to make wise business decisions, and willingness to serve are necessary characteristics to board members. But, this election does not mean the end of the members' responsibility. They need to keep in contact with the directors to ask questions, make comments, and request changes or new services. They also need to observe and evaluate how directors perform.

• Provide necessary capital. A primary responsibility is to finance the cooperative for the purpose of acquiring needed goods and services, not for financial returns. This is done initially through the purchase of stock or a membership. It is continued through patronage and/or use of the cooperative. One-time assessments or investments also may be necessary to finance special fixed assets or services. For a cooperative to be successful, it must have a volume of business. Normally, the greater the volume of business, the greater the efficiency obtainable, the more services available, and the higher the earnings (profit) are for members. Members' patronage finances the cooperative so the business can continue. The greater the patronage, the more likely the cooperative will be able to provide, expand, and improve its services. But if that is not the case, and the cooperative loses money, members have the same responsibility to share in those losses as they do in the earnings.

• Adopt legal papers. Members are responsible for understanding, adopting, and amending legal papers. They should read and understand the cooperative's articles of incorporation and bylaws to know how the business is to  operate and what services it can provide. Before voting to approve bylaw amendments, they need to analyze them to determine how they will affect the business. Members must also become acquainted with the contents of legally enforceable marketing contracts or other legal papers before signing them so that they can fulfill their obligation to the business.

• Evaluate performance of the cooperative. Members should examine the annual report, observe whether the cooperative is meeting their needs and analyze efforts of the cooperative to communicate with members and the public.

This concludes the four-part series about the responsibilities of a general manager, employees, directors, and member-owners.

I pray everyone has a safe month.