Organization and management of cooperatives

ORGANIZATION AND

MANAGEMENT OF

COOPPresented by: Victoria N. Cortez Librarian, Sisters of Mary School -Boystown, Inc.

How to organize?

• Felt Need

-solution for problems-inefficient existing business organizations in the community(high interest rates, high prices, financial , production, & marketing problems)

• Volume of Business

-sufficient resources needed to pay fixed operations (rentals, salaries of employees)-attract more members & customers to increase its volume

• Availability of Qualified Officers

-men of integrity and honesty-willingness to serve

• Adequacy of Facilities-available facilities to sustain the operations & services-simple & adequate

• Opportunities for growth

Organizational Procedure

COOP

COOPE

RAT

ION

LEADER

SHIP

FELT NEED

Preparation of an Economic Survey

The Leaders or core group who initiated the organization of the cooperative shall undertake a feasibility study with the assistance and guidance of a cooperative specialist from the Authority. The purpose of the survey is to determine the viability and potential of the projected cooperative. Before selling the idea of a cooperative to the people, management, manpower, economic, technical, and financial aspects of the project should be studied. In addition, non-economic factors such as politics, customs, traditions, habits, and values should be also analyzed.

Guidelines for Economic Survey

Formation of Working Committees

During the first general meeting, the following committees shall be organized:

1. Membership Committee –promotes cooperative ideas, practices, & campaigns for members

2. Finance Committee- Collects payments, contributions, etc.

3. Documents Committee- prepares all required documents, such as bylaws and articles of cooperation, forms, and other requirements for the organization of the cooperative

4. Survey Committee- gathers data and other relevant information on the viability of the cooperative. This survey validates, supplements, and updates the data gathered by initiators or core group

Organizational Meeting

If the criteria of viability and all requisites of membership, Capital, training, and technical matters have been fully met, then a general meeting shall be convened to organize formally the cooperative or kilusang bayan.. Among the matters to be taken up are:

1. Resolution to organize the cooperative2. Adoption by majority vote of the articles of incorporation and bylaws3. Election of the members of the Board of Directors and important committees4. Other matters

The cooperative field man shall see to it that the elected officials meet the necessary qualifications prescribed by the Cooperative Development Authority. The Board of Directors, committee members, and the members of the core group shall the constitute the incorporators. Immediately after the organizational meeting, the members of the board and the committees shall take their oath of office, and meet separately to elect from among them selves their respective bodies. Among the matters to be taken up at the board are:

1. Appointment of the manager and other subordinate employees.2. Designation of its depository bank3. Creation of Education and Training Committee which shall be headed by the Vice-Chairman4. Creation of other committees5. Ratification of contracts which may have been negotiated by the core group or organizers prior to the formal organization of the cooperative6. Other matters

Requirements for Registration

four copies of Economic Survey with a general statement describing the :

-structure -purpose -economic feasibility -area of operation -size of membership -other pertinent data

Four copies of Articles of Cooperation, together with bond of accountable officers

Four copies of Bylaws Registration fee of P250 payable to CDA

• Certificate of Registration is issued by CDA after evaluation of necessary documents

• Return of documents and its reason for denial• A registered cooperative acquires juridical

personality separate and distinct from its members

Organizational Structure

GENERAL ASSEMBLY

BOARD OF DIRECTORS

ELECTION COMMITTE

E

AUDIT/INVENTORY COMMITTEE

1.General Assembly of Members

-The general assembly of members shall consist of all members of good standing and when convened and acting as a body and subject to the provisions of Cooperative Code, it has ultimate authority in the administration and management of the affairs of the cooperative

-Annually, the members of the cooperative shall convene to hear & evaluate the reports of the various bodies elected by them to perform certain functions and activities in connection with the objectives of the organization. This consultation within the members of the officers shall take place within 90days after the close of the fiscal period (January-December) or granted an extension by the CDA

Among the matters :

1. Consideration of the consolidated reports of the board and the committees including audited financial statements of financial condition & operation2. Amendments to the Bylaws3. Election of directors and committee, and 4. New Business

• For business efficiency, the preparation and approval of budget shall be the responsibility of the Board

2. Quorum at membership assemblies

-One-half plus one of the members in good standing shall constitute a quorum at any annual or specific assembly or otherwise provided, a majority vote of the quorum shall be a valid cooperation act- A conditional quorum exists if at the time and date in the call, the

members present constitute at least 25% of the members in good standing

- A majority vote of such members on matters which do not otherwise require a different quorum and a higher percentage of votes, shall be a valid corporate act on condition that:

a) The minutes of the meeting duly certified and attested to by the secretary and presiding officer, respectively, are submitted to the Chairman, CDA, within 15 days from the date of said meeting

b) A list of the members present during said meeting is enclosed with the minutes, and

c) The Chairman, CDA, approved the resolutions

3. Powers of the general assembly

a. Elect and remove directors, officers, and committee members for cause;b. Hear and pass the upon the reports of the Board of Directors, officers, and committees;c. Arbitrate in disputes or disagreement by and between members of the board, committees, officers, and members;d. Determine amendments to the Articles of Incorporation and Bylawse. Decide, subject to legal restrictions, on major financial policy changes; f. Exercise final authority on all matters vitally affecting the cooperative; and g. Exercise all the rights and privileges appurtenant to membership

4. Special General Assembly-may be called at any time by the Board of Directors in between Annual general assemblies to take up urgent matters

-special general assembly shall be convened by the President within30 days upon receipt of the call from:a. At least 10% of the membershipb. The audit and inventory committeec. The CDA or its authorized representative; andd. The Federation or Union of which the cooperative is a

member

5. Board of Directorsa. Manner of Selection

The members of the board shall be elected by secret ballot by the general membership at the annual assembly for a term of 2 years, However, during the first election after registration, one-half plus one of the directors garnering the highest number of votes shall serve for 2 years,the rest for one year. Thereafter, all directors shall serve for a term of twoyears

All members in good standing who have the time and willingness to serve,are qualified to be voted upon as directors

b. Disqualifications 1. holding any elective position in the gov’t except that of the barrio councilman 2. having conflicting interest with the business of the Coop 3. having been absent for three(3) consecutive board meetings w/o being excused

4. Being a full-time employee of the Kilusang Bayan5. Having been convicted of any crime involving moral turpitude, gross negligence, gross misconduct in the performance of his duties, or found culpable in any administrative case involving such offenses

6. Facing as a defendant or respondent, in an administrative proceeding or civil suit involving financial/or property accountability7. Having been associated with any past anomalies in cooperatives, and8. Having been disqualified pursuant to disqualifications prescribed by theCDA

c. Power of the Board

the members of the Board of Directors, as a body and not acting in theirIndividual capacity, shall have the following duties:

1. Exercise general supervision and control over the affairs of the cooperative2. Prescribe policies consistent with the law, the bylaws, resolutions of the membership assembly for the management of its business, and the guidance of its members, officers, and employees

d. Liability of the Board Member Members of the board shall be jointly and severally liable for transactions, acts, omissions made in violation of law, regulations of the bylaws, or the decisions of the general assembly, except those who entered a protest at the time when such transaction, act, omission was acted upon.

-Joint and Severally Liability- any aggrieved party or the cooperative has the option to go after any member of the Board or all the members for the performance of an undertaking or for damages incurred in connection thereto.

e. Meetings of the Board

-shall meet after 10 days of their election to elect among themselves a Chairman, Vice-Chairman -Treasurer and Secretary are not members of the Board -The Board shall designate said officers and fix their tenure & compensation -Term of office for Chairman & Vice-Chairman is 2 years, until their successors are elected and qualified unless sooner removed for cause -Board shall meet at least once a month. However special meetings may be called by the chairman

f. Quorum at, and notice of, Board meetings -regular or special--- one-half plus one of the entire membership -unless dispensed with by the Board, regular & special meetings shall be served by the secretary at least 5 days before each meeting

g. Vacancies -when a vacancy occurs by reason of death, incapacity, removal or resignation, the remaining members of the Board constituting a quorum shall fill such vacancy.. The successor shall serve the unexpired portion of term. If the remaining members do not constitute a quorum, the CDA, shall designate the successor

If at the regular general assembly the members cannot elect the members of the Board due to lack of quorum and the directors whose term have expired refuse to hold over, the CDA shall appoint from among the members qualified the successor for the vacant position

h. Removal of the director

Members of the Board may be removed for cause by a majority vote of the members in good standing present at a regular or special general assembly called for the purpose

The democratic character of cooperatives demands that no member shall be disenfranchised in his cooperative without due Process of law

On the other hand, officers, appointed or elected by the Board or the committee may be removed for cause by the Board or the committee concerned, by a majority vote of all its members after giving the director or committee member sought to be removed an opportunity to be heard

6. Officers of the Cooperativea. Chairman 1. Shall preside over all meetings of the cooperative and the Board of Directors 2. Perform any and all duties usually performed by a presiding officer 3. Sign all stock certificates, revolving fund certificates, and such other papers of the cooperative 4. Perform such other duties as the Board of Directors may prescribe

b. Vice-chairman -shall perform the duties of the chairman in the absence of disability of the latter. In the event of death, resignation, removal of the chairman, the board may elect a successor

c. Treasurer 1. take custody of all money, securities, and papers of the cooperative

2. Keep complete record of its cash transactions for the establishment and proof of his cash position at any given time and date

3. Pay upon the recommendation of the manager or as authorized by the Board of Directors, all money transactions and certify to the correctness of the cash position of the cooperative in all financial statements and reports submitted to the Board of Directors

4. Turn over all money, securities, papers, books, and other property belonging to the cooperative that he may have in his possession upon election or appointment of his successor

5. Post an adequate bond, the expenses of which shall be paid by the cooperative, to assure the faithful performance of his duties, and

6. Perform the duties of the secretary in the latter’s absence or inability to perform his duties.

d. Secretary 1. Keep complete list of all members and maintain a correct record of all meetings of the Board of Directors and general assembly; 2. Give notices of all meetings called; 3. Keep an maintain the stock transfer book and serve as custodian of the corporate seal of the Kilusang Bayan (cooperative)

4. Turn over to his successor all bonds and other properties in his possession belonging to the cooperative; 5. Perform the duties of the treasurer in case the latter’s absence or inability to perform his duties

7. Management Staff -appointed by the Board -Headed by a General Manager -in charge of day to day affairs of the cooperative entrusted to them -implement the policies of the Board and the membership assembly to attain the objectives of the coop -members of the management staff are the policy implementors of the cooperative, and as such, they shall be responsible to the Board for the performance of their functions

Duties of the General Manager

1. The manager, under policies set by the Board of Directors, shall have general charge of all the phases of the business operations of the cooperative. Upon the appointment of his successor, he shall turn over to him all money property and other assets belonging to the cooperative which he has in his possessions or over he has control

2. He shall maintain his records and accounts in such manner that the true and correct condition of the business of the cooperative may be ascertained therefrom at any time. He shall render annual reports in the form and in the manner prescribed by the Board of Directors, and shall preserve the books, documents, correspondence, and records of whatever kind pertaining to the business which may come into his possession

3. Subject to the policies that may be promulgated by the Board of Directors, he may employ, supervise, and dismiss any agent and employee in the management force.

Accountant

No person shall be appointed to the position of accountant Unless he possess the following qualifications:

1. Commerce graduate, major in accounting2. Must have at least 2 years experience in cooperative business3. Must be honest and must have a deep sense of responsibility4. Must not engaged directly or indirectly in any business similar to that handled by Kilusang Bayan5. Must not be facing or have been convicted of any administrative or criminal case involving moral turpitude, gross negligence, or grave misconduct in the performance of his duties

6. He must not addicted to any form of gambling or immoral or vicious habits

7. He must be willing to undergo pre-service and /or in- service training

Duties of the Accountant

1. He shall install adequate and effective accounting system in the cooperative2. He shall render monthly/annual(as may required) reports to the Board of Directors on the financial condition and operation3. He shall coordinate with the manager and the audit and inventory committee in assisting the Board in the preparation of annual budgets

4. He shall assist the chairman in preservation of the books of accounts, documents, vouchers, contracts, and records of whatever kind pertaining to the business of the cooperative which may come into his possession.

Manner of selection: Same as the manager

Compensation

The Members of the Board and Committees shall not be Entitled to regular compensation; however, they may begiven per diems for actual attendance in Board and Committee meetings, reimbursement of actual and necessaryExpenses while performing functions on behalf of theCooperative. They may also be given allowances subject tothe discretion of the general assembly