Member Responsibilities in a Member Owned Business
Phil Kenkel
Bill Fitzwater Cooperative Chair
One of the challenges facing cooperatives is informing members of their responsibilities as member
owners. Managers and boards know that members expect a lot from the cooperative and try to meet
those expectations. Perhaps our focus on reminding members what the cooperative does for them
prevents us from reminding them of what they must do for the cooperative.
Members need to understand the cooperative’s basis business model. That means that they must
understand how volume drives down per-unit costs. Members should be interested in maximizing
business with the cooperative because in doing so they help make the organization that they own
more efficient. Members should also be informed enough about the cooperative’s basis business
environment so that they can evaluate the board’s decisions and strategic investments.
Members have a responsibility to be engaged in governance. That means they should be familiar
with the by-laws of the cooperative, be prepared to actively support or actively oppose resolutions
coming before the membership, and vote for board member candidates on the basis of their potential
contribution to the cooperative’s governance.
Members have a responsibility to provide information to the cooperative relative to their needs,
preferences and farming strategies. The cooperative is an extension of the member’s farm operation
that also has to operate as an efficient business. Most cooperative members are comfortable with
their customer role and will actively comment on what they like and don’t like about customer
transactions. As owners, members also need to help the board and management team understand
how the cooperative’s asset mix will line up with their future farming operation.
We have moved into an era where wealth generation has more to do with information than it does
with physical assets. Cooperatives are ideally positioned to thrive in this environment because their
member owners have a vested interest in sharing information with their cooperative. This potential
is not a high priority for most cooperative members. Perhaps, we are partly to blame. Cooperative
leaders should never lose their focus on their responsibility to their member owners. Occasionally
we need to remind the members of their responsibility to the cooperative they own and control.
11-12-2011