COOPERATIVE GOVERNANCE AND CONTROL

• Governance of cooperatives is rooted in the international governance principles of cooperatives. It should

be noted that cooperative governance consists of a three tiered system: General Assembly (decision-
making body), BOD (policy-making body) and Management (day-to-day operations).
MEMBERSHIP ROLES & RESPONSIBILITIES
• It is not unusual for members to believe that they have very little role to play in their cooperative,
especially if it is large. Yet, the role of the members is essential – it is placed at the top of the “control”
diagram.

Members
Board of
Directors
CE
O
MEMBERS RESPONSIBILITIES
• Attend and actively participate in all cooperative annual meetings
• Serve on cooperative committees and be willing to run for a board seat
• Only criticize the cooperative in a constructive manner and do not expect special treatment
• Keep informed about the cooperative by reading newsletters, news articles, and annual reports
• Adopt and amend articles of incorporation, bylaws, and any resolutions or motions presented at
cooperative annual meetings.
• Elect and remove directors.
• Help ensure that directors, management, and employees abide by the cooperative’s bylaws and
policies
• Contribute equity to the cooperative
• Patronize the cooperative to the fullest extent possible and pay accounts promptly
• Abide by the decisions of the cooperative board and management
• Choose to leave the cooperative if unhappy, rather than ruining it for other members.
BOARD OF DIRECTOR RESPONSIBILITIES
• Attend every board meeting, actively participate, and be willing to ask questions
• Be prepared for every board meeting
• Seek additional information or training when needed to make the right decision (financial training)
• Elect board officers (chair, vice-chair, etc.)
• Hire and supervise the CEO or GM. Ensure that management abides by the cooperative’s bylaws
and policies
• Do not micromanage the CEO; let him/her do the job you specify
 • Do not expect special treatment by the cooperative and do not vote on issues where there is conflict of
interest
• Raise capital • Select financial institution
• Remove board members who are not doing their job and help fill any board vacancies
• Keep written records of all board meetings
• Establish long-term plans and objectives
• Patronize the cooperative to the fullest extent possible and pay accounts promptly
COOP MEMBERS WITH THE FOLLOWING TRAITS SHOULD BE ENCOURAGED TO RUN FOR
BOARD SEATS:
• Good business judgement;
• Independent thinking and a willingness to ask critical questions;
• Respect for other members; • Integrity;
• A strong work ethic (works well with others, makes and keeps commitments, manages time
effectively); and
• A comprehensive understanding of cooperatives
SEVEN TO NINE BOARD MEMBERS are common for LOCAL COOPERATIVES.
• Some require a minimum of five board members, unless the cooperative has fewer than 50 members,

P R E S ID E N T
and a minimum of three board members.

V-PRES
SEC
TRES
EVALUATING
CEOs
• The CEO should be evaluated on a regular basis, at a minimum annually. An evaluation begins with the
job description, which details the areas and tasks for which the employee can be held responsible.
Generally, the evaluation compares actual performance to a pre-determined standard.
The evaluation should point out the following:
• What the employee has done well;
• Areas of work that need improvement;
• Recommended resources (training, equipment, etc.) to help the employee succeed;
• Reasons work performance was sub-standard (within employee control or not)
• Corrective actions.
MANAGER RESPONSIBILITIES
• The CEO or GM is the sole employee of the BOD and is ultimately responsible for the day-to-day
operations of the cooperative.
• The CEO is responsible for ensuring that the cooperative’s daily activities are leading toward the
realization of the cooperative’s objectives and mission.
• He or she sets more specific performance objectives (sales) that ultimately lead to the larger
performance goals set by the board.
• The most important function the CEO plays is hiring and supervising all other coop employees.
• Employees need to understand the coop mission, they need to be motivated, and trained well
• Making certain that employees see how their efforts fit into the overall goals of the cooperative
is a key component of a manager’s job.
“The conventional definition of management is getting work done through people, but real management is
developing people through work.”
THE BOARD AND MANAGER RELATIONSHIP
• The ability a cooperative board and CEO to form a seamless relationship is generally a strong
indication of an efficient, well-managed cooperative.
COOPERATIVE COMMUNICATION AND EDUCATION
• Leadership, control, and financial ownership of a successful cooperative require informed and
educated members. This is recognized by the inclusion of member education, training, and
information as one of the seven cooperative principles endorsed by the International Cooperative
Alliance.
THE IMPORTANCE OF COMMUNICATION AND EDUCATION
• Cooperatives have special communication and education needs because of their unique ownership
and governance structures. Cooperatives involve a wide range of people in the decision-making
and management process. It involve all agents like the members, board, management, and
employees.
MEMBERSHIP ROLES & RESPONSIBILITIES
MEMBERSHIP IN THE COOPERATIVE
QUALIFICATIONS
Membership shall be open to consumers under any of the following categories:
a. Natural persons who are citizens of the Philippines, of legal age, and with capacity to contract, or heads of
families.
b. Persons of at least 15 years of age, with visible means of income through their own independent work
and effort.
The prospective members should:
1. Reside or work in the area of operation;
2. Pledge to undertake the responsibilities of membership;
3. Complete the prescribed pre-membership cooperative education program; and
4. Use or anticipate to use the services of the cooperative more particularly the acquisition and sale of
consumer goods and other allied goods relative thereto.
MEMBERSHIP APPLICATION

 Application for membership in the cooperative shall be in writing and shall require the favorable action by
the Board of directors. A denial by the Board may be appealed to the general assembly by giving notice
to the secretary, 30 days before said general assembly.
DUTIES OF A MEMBER
o Pay the installment on capital as it falls due and participate in the capital build-up of the cooperative.

o Participate in its parliamentary affairs. o Patronize regularly its business.

o Obey the rules and regulations provided by Coop Code, the bylaws, decisions of the General Assembly
and the Board of directors.
o Attend and participate in its cooperative education and training.

o Promote the aims and purposes of cooperatives and the welfare of its members.

RIGHTS OF A MEMBER
o The right inherent to membership in the cooperative shall be available only to members in good standing.
Among such rights are:
 Participate in the deliberation during membership assembly.
 Vote on all matters brought before such assembly.
 Seek any elective position, if qualified.
 Receive interest on capital and patronage refund, if any.
 Inspect and examine the books of accounts, minutes books, share register, and other records of the
cooperative during office hours.
 Exercise all the rights and privileges appurtenant to membership.
MEMBERS IN GOOD STANDING
o A member in good standing is one who:

 Has paid the membership fee and a value of at least one share of stock;
 Is not delinquent in the payment of his subscription or capital contribution and account;
 Has attended the required cooperative seminars and/or training activities;
 Patronizes regularly the cooperative, and participates actively in its parliamentary affairs.
CDA Declares All Cooperatives to Comply with R.A. No. 9510

 MANILA, PHILIPPINES – 18 January 2019 – The Cooperative Development Authority (CDA) issued
Memorandum Circular No. 2019-01 announcing to all its covered cooperatives to comply with Republic Act
No. 9510, and begin submission of all their borrowers’ basic credit data to the Credit Information
Corporation (CIC).

 The Credit Information Corporation (CIC) is a Government owned and Controlled Corporation (GOCC)
and the Philippines’ 1st and only public credit registry that is mandated to demand and receive both positive
and negative credit information on borrowers over entities covered by R.A.9510. The CIC was established
to address the country’s need for a comprehensive, centralized and reliable credit information system.

 Cooperative Development Authority (CDA), alongside Department of Finance (DOF), Department of

Trade and Industry (DTI), Bangko Sentral ng Pilipinas (BSP) and Insurance Commission, is a relevant
government agency identified to support the implementation of R.A. No. 9510.

 The Cooperative Development Authority (CDA) is in charge of the registration and regulation of all types
of cooperatives in the Philippines. Cooperatives covered by the memorandum circular are those that have the
authority to lend and/or perform micro-finance activities both to individuals and cooperative borrowers.

 It is reiterated in Memorandum Circular No. 2019-01, dated 5th of November 2018 signed by the CDA
Chairman Orlando R. Ravanera, that cooperatives engaged in lending and/or micro-financing activities
and/or extending credit facilities, have the obligation to submit comprehensive, accurate, current,
objective, and factual basic credit data of all their borrowers.

 President and CEO Jaime P. Garchitorena said that having the full support of the CDA, being the
cooperatives’ regulatory agency, is a significant step in achieving many of the inclusive lending targets of
the National Government.  

 Cooperatives are often designated as conduits of funding for the purpose of supporting agricultural and
non-agricultural based ventures, and that cooperatives have the advantage of being closest to the
underserved and un-served markets who have the potential of developing creditworthy records.
 “Currently, the CIC has around 600 medium and large cooperatives registered for submission of data and this
is expected to considerably increase with the CDA’s Memo Circular. As part of our capacitation assistance,
since 2015, the CIC has continuously provided series of technical trainings with the support of various
cooperative federations across the country, we expect this to continue in 2019,” Garchitorena also said.
There are roughly 1,800 reporting large and medium cooperatives as classified by the CDA as of 27 July
2016.