Governance

Members own and control the cooperative, which is organized and operated for their benefit. Members exercise control of the cooperative by voting to elect a board of directors to act on their behalf. In a small percentage of cooperatives, all members serve on the board. This is called direct democracy. Members also vote on changes to the articles of incorporation and bylaws, and on cooperative mergers or dissolution. In Wisconsin, each member typically receives one vote. Members must understand the issues facing their cooperative in order to make sounds decisions, so member communication and education programs are a good investment.

In a cooperative, the board of directors is elected by and from the membership. The board establishes long-term business strategies that balance the needs of the membership with the cooperative’s financial sustainability. They review and evaluate all financial reports, assess the capital needs of the cooperative, and determine patronage refund allocations. They establish operating policies and are responsible for hiring and evaluating the general manager/CEO.

A cooperative’s management is hired by the board to help inform and carry out its strategic objectives. The general manager/CEO oversees the day-to-day operations of the cooperative and reports on the co-op’s financial and operational performance to the board. The general manager/CEO makes recommendations for long-range planning and develops the budget for board approval.

A co-op’s employees carry out cooperative operations that provide the goods and services needed by the members. Employee understanding of cooperative principles and objectives can be an important part of positive member relations. In the case of worker-owned cooperatives, management and employees may also be members.