Acknowledgements

This learning circle was developed by Active Learning and Communication Limited Co-operative (ALC), a not-for-profit co-operative involved in active community-based learning utilizing the wealth of prior learning and experience that exists in our communities.

ALCC wishes to thank all who contributed to the development of this program including the Co-operative Federation of Victoria Ltd, ALCC members and staff of the NSW Registry of Co-operatives.

The development and production of this publication was funded by a grant provided by Consumer and Business Affairs Victoria to the Co-operative Federation of Victoria Ltd.

Disclaimer

Every effort has been made to ensure that the information in this publication is correct. The publishers and their employees or agents shall not accept any responsibility for loss or other consequences which may arise acting or refraining from acting as a result of material in this publication.

This work is copyright. Graphical and textual information in this work may be reproduced in whole or part, provided written permission is sought and obtained from the Co-operative Federation of Victoria Ltd and the information is not sold or used for commercial benefit and its source is acknowledged. Such usage includes fair dealing for the purposes of private study, research, criticism or reviews as permitted under the Copyright Act 1968.

Published by the Co-operative Federation of Victoria Ltd

71 Franciscan Avenue Frankston VIC

Phone 9785 6704

Fax 9785 6542

Email: cfv@australia.coop
Website: http://www.australia.coop

Please email cfv@australia.coop to report any format difficulties.

Co-opAdvantage Developing Directors of Co-operatives encapsulates the essence of co-operative education – an understanding of and commitment to the CoopAdvantage and how this must underpin education for co-operatives and cooperators. The Co-operative Federation of Victoria Ltd is committed to the importance of Co-opAdvantage workshops. This Co-opAdvantage publication provides the discussion material and resources for these workshops to help current and potential directors of co-operatives to:

· explore the director’s role and responsibilities,

· identify essential and desirable knowledge, skills, attitudes and behaviours, and

· identify pathways for developing essential and desirable knowledge, skills, attitudes and behaviours.

How was this program developed and why?

This material is a modular program for use by directors, potential directors and members of Victorian co-operatives.

· Existing directors – to strengthen their knowledge and skills.

· New directors – to develop their knowledge and skills.

· Members – to prepare them as director candidates.

· Members – to understand how to keep directors accountable.

Co-operatives are distinctive organisations and their social goals provide a competitive advantage. The key to achieving this competitive advantage is acceptance and articulation of the Co-opAdvantage – the values and principles of co-operation. The prerequisite to this is informed and educated members and directors through an ongoing educational process based on the recognition that there is a co-operative difference – the Co-opAdvantage. An informed and active membership depends on understanding and accepting the Co-opAdvantage.

It draws on:

· material in the UK report Developing Directors of Co-operatives and Other Similar Enterprises prepared by the Plunkett Foundation and the UK Department of Trade and Industry,

· expertise of the Co-operative Federation of Victoria Ltd,

· materials successfully piloted with a NSW consultants co-operative, and

· the authors’ experiences as company directors and directors of non-profit bodies as well as other business and life experience.

The Co-operative Federation of Victoria Ltd will periodically evaluate and refine the Co-opAdvantage program to:

· provide a timely and effective self-education mechanism,

· integrating this program with effective mentoring and support services, and

· use feedback from this program to update this publication and assist the development of further programs.

Related activities

This program complements other activities undertaken by a range of government and non-government organisations working with co-operatives or working to conserve and promote study of Australia’s co-operative achievements and heritage.

Some of these organisations are identified in this program’s Resource Book.

Using this program

This program uses a self-paced, group-learning approach, which has been used successfully in Sweden for the last 50 years to train directors of non-government organisations.

For Victoria’s co-operatives, its appeal lies in its flexibility and its capacity to minimise the time, travel and cost demands on members.

Co-operatives can easily distribute the program’s materials to their members for use:

· in conjunction with regular board meetings or committee meetings, or

· by informal groups of interested members.

The materials can be discussed in face-to-face meetings, in phone conferences, or via Internet conferencing or video conferencing. The material will also be held on the web sites or intranets for easy reference.

Whether the discussion takes place face-to-face, in a teleconference or on the web, the main things to remember are to:

· bring an open mind,

· listen to all views,

· value your own experience and that of others,

· ask others for help with points you don’t understand,

· decide for yourself what you want to learn and how deeply you want to explore any topic, and

· supplement this material with local material, expert opinions and site visits as appropriate.

About the sessions & resources

The Co-opAdvantage Developing Directors program has 3 separate sessions:

· The big picture,

· Getting down to essentials, and

· Development paths for directors.

Each session is outlined on this page. Participants decide:

· how much material to use,

· which points to discuss,

· how deeply to explore any discussion point,

· how long the discussion lasts, and

· how many breaks to take and how long the breaks are.

The Big Picture

This session:explores the special characteristics of co-operatives and the legislative and regulatory frameworks within which they operate, and

introduces the idea of developing a job description for the co-operative directors and office bearers.

Before or after this session, the program participants might like to:

· ensure each participant has access to the co-operative’s rules and

legislation or bring these along to the discussion,

· review the co-operative’s rules, bylaws and legislation,

· gather the annual reports for some other co-operatives or look at the

annual report format required in the Co-operatives Act,

· look at the history of some local or well-known co-operatives,

· look at documentation available for your own co-operative’s history, and

· browse or start a collection of press clippings about co-operatives.

· This session explores the essential items that a co-operative’s Board of directors must have.

These include:

· Time

· commitment to co-operative principles,

· common sense and reasonableness,

· a working knowledge of the co-operative legislative and regulatory frameworks,

· a good understanding of the co-operative’s members and the markets,

· an ability to work together, and

· other items that program participants identify as essential.

Case Study 99

~ case studies of Victorian cooperatives ~

Before or after this session, the program participants might like to

· visit a library or use the Internet for further research, and

· invite a guest speaker (e.g. lawyer, accountant, insurance broker or

director from another co-operative, perhaps from a more established co

operative).

This session explores:

· desirable capabilities and qualities for directors of co-operatives, and

· development paths that best fit the needs of a co-operative’s directors and their available resources.

Before or after this session, the program participants might like to consider:

· inviting a speaker on education and training pathways, or

· arranging to browse catalogues of community education programs, TAFE and university course and programs offered by bodies such as the Australian Institute of Company Directors.

The program’s Resource Book contains:

· a rich range of exercises to assist further exploration of the director’s role, and appropriate development paths for directors; and

· case studies of several Victorian co-operatives.

All of this material is optional.

Quotes from case studies in the Resource Book are presented in boxes between super size quote marks like these

Outcomes

Potential outcomes from using this program include:

· a clear understanding of the roles and responsibilities of directors

· a clear understanding of the distinct co-operative competencies

· agreed job descriptions for directors, and perhaps for the Chairman and

Secretary-Treasurer

· statements of the Board’s current competencies (knowledge, skills

attitudes and behaviours),

· statements of the Board’s desired competencies (knowledge, skills

attitudes and behaviours,

· statements of preferred pathways for enhancing existing competencies and

moving toward desired competencies,

· agreed performance indicators for the Boards, Chairman and Secretary–Treasurer,

· a resource list to assist learning about Director’s role,

· an action plan to assist learning about Director’s role,

· greater confidence in performing the director’s role,

· facilitate management accountability to boards

· facilitate director and board accountability to members

· better working relationship among participants; and

· smoother running of the co-operative.

Acknowledgements

ALCC wishes to thank all who contributed to the development of this program including the Co-operative Federation of Victoria Ltd, ALCC members and staff of the NSW Registry of Co-operatives.

The development and production of this publication was funded by a grant provided by Consumer and Business Affairs Victoria to the Co-operative Federation of Victoria Ltd.

Disclaimer

Published by the Co-operative Federation of Victoria Ltd,
71 Franciscan Avenue, Frankston VIC 3199

Phone

97856704

85 6704

Fax

97858585

856542

cfv@australia.coop

The fun of Learning Circles______________________________

Fifteen reasons for learning new skills --------------------------------

Learning circles aren[Øchool classes! --------------------------------

Who is involved?

Do I have enough experience? --------------------------------

Will I look foolish?

The learning circle kit______________________________

The process___________________________________________

How learning circles are run ----------------------------------------------

Participating___________________________________________

Some suggestions on participation-------------------------------------

Agreeing on arrangements, etc --------------------------------

Participating even more ---------------------------------------------------

What if I fail this course?

Organising____________________________________________

Organiser©check list -------------------------------------------------------

Facilitating____________________________________________

Facilitator©checklist

Fifteen reasons for learning new skills

You don’t need a reason, just a desire to gain a deeper understanding of issues, or more detailed information about a topic of interest to you.

Learning circles aren’t school classes!

There is no set textbook, right answer or one point of view that will be handed to you.

There is no teacher with the correct answer.

On the contrary, learning circles present you with a learning experience that:

· uses a kit of material to tease out the issues;

· builds on the experience of you and the other members;

· provides you with some references to further information; and

· uses a lightly structured path to pursue the topic.

There is no curriculum. The group chooses:

· the amount of the material is pertinent to them;

· the sequence they wish to use for the topics; and

· how deeply they explore various topics

The kit provides material for a number of sessions, usually between three and five. However the number of sessions and their length can be varied to suit the circle.

The material in the kit is not the final word on the topic. It provides a starting point and suggests references, so can explore learning on the chosen topic in their own way.

Generally, the material provides:

· an overview giving a broad perspective on the topic;

· a number of sections, which consider individual aspects of the topics;

· activities for participants to enhance the learning process;

· a list of references, as a jumping off place for more exploration rather than an exhaustive list;

· encouragement for further study or community action; and

· an opportunity to supply the Active Learning and Communication Co-operative, Co-operative Federation of Victoria Ltd and with feedback about the kit and your circle’s experience with it.

There is no test at the end, nor is there any need to ensure everyone learned the same things (or even wanted to!).

How learning circles are run

Learning circles generally run over two or more sessions, each of about two hours.

They are held in a non-threatening location, say a private home, and may move between locations for various sessions.

The host does not provide quality suppers. See the paragraph on Agreeing arrangements later in this section.

Participation in learning circles involves being interested, taking part; and gaining a deeper understanding of the issues surrounding the topic. Learning, understanding and empowering members to act on their beliefs are all expected outcomes of learning circles.

Some suggestions on participation We recommend:

· recognising the value of your own experience, and offering it in the climate of shared experiences,

· working to keep the discussion going. Be interested enough to keep the ball rolling without calling on the facilitator,

· enjoying the learning circle process,

· addressing the circle members rather than the facilitator, even asking for clarification directly from other members.

· listening to the point of view of those you disagree with. (This may make you a better advocate for your point of view. Or, alternatively, it might change your mind.)

expecting disagreement and conflict of opinion and remembering that the conflict is with the idea rather than the person. (Talking someone down does not change their opinion of the topic, but it might change their opinion of you.)

Agreeing on arrangements, etc

Some of the background rules that participants need to agree on include:

· start and finish times,

· sharing out session preparation tasks and

· smokos,

· ways to ensure all views are heard.

Participating even more

Other ways members can help the circle include:

· conducting further research, seeking out speakers to address sessions, arrange visits to sites

· sharing the facilitator’s task, and

· Keeping records

If it fits in with the circle’s learning objectives, the documentation of the circle’s learning curve, future actions community action and outcomes can be an interesting task and source of future pride and interest for the group.

Organiser’s check list

If you can tick off each of the item listed in the checklist below as completed, then yours will be a well-organised learning circle.

· Do you have a list of participants, with phone numbers, email addresses, phone number, etc.

· Have you contacted everyone and checked that they know who the facilitator is and where to go for the first meeting;

· Have you checked that everybody has all the material they need to review before the first meeting, including maps of the area under discussion, if this is appropriate;

· Have you provided materials for name tag purposes;

· Where appropriate, have you arranged supplies of butchers paper, and a place to display filled out sheet with the circle’s work; and

· Where appropriate, have you arranged for equipment to play videos and audiotapes, show overheads and access computers or the Internet.

The facilitator can be one of the group or a person with adult education experience from outside the group.

The facilitator makes it easy for the circle to enjoy the learning experience. This enjoyment is reflected in the ways the circle air, and listen to, ideas and individual experiences about a topic.

Facilitating is not teaching. If participants are new to learning circles, then for part of the first session, the facilitator will have to lead the circle into the discussion process and the use of the kit.

Whilst facilitators actively participate in discussions, their primary role is to help the circle reach its own decisions on:

· running the sessions;

· selecting the topics for major focus; and

· setting learning objectives.

Facilitator’s checklist – be prepared!

Are you prepared to:

· set and maintain a friendly atmosphere where circle members are introduced, their interests are acknowledged and all have their own sets of background materials;

· let circle members know that you are not “the expert”, that they are, in essence, the experts as they bring their interest, life experience and willingness to learn to the circle;

· listen well to what members are saying and guide discussion, rather than planning the point you want to make;

· draw out the hidden assumptions behind various positions;

· draw out the quiet people and discourage any dominant talkative member from taking over;

· allow members think time. It is not necessary for discussion to be constantly in motion

· identify when assertions or things that “everybody knows” are sticking points, then check their importance to the circle or arrange for a member to research further information for the next session;

· accept that disagreements on causes and remedies are common, and draw out the points supporting opposing theories for further discussion;

· accept that people get passionate about issues, which leads to conflict, and try to keep conflict on ideas and issues rather than the personalities;

· summarise progress from time to time and check with the circle whether they are progressing through the kit in accordance with their learning objective;

· revise learning objectives, if the circle participants desire that outcome;

· ensure tea and biscuits breaks are comfortable;

· start a summarising process that gets everyone’s point of view and draws attention to the next session’s material, promised research and location as the agreed finish time for the session approaches,

· Provide the forms and time for members to complete evaluation reports as necessary for the intermediate and final sessions?

Acknowledgements

This learning circle was developed by Active Learning and Communication Co-operative Limited (ALCC), a not-for-profit cooperative involved in active community-based learning utilizing the wealth of prior learning and experience that exists in our communities.

ALCC wishes to thank all who contributed to the development of this program including the: Co-operative Federation of Victoria Ltd, ALCC members, staff of the Registry of Co-operatives in Victoria and NSW, Ballarat Community Development Co-operative Ltd and our case study Victorian co-operatives, namely Co-operative Purchasing Services Ltd (CPS), Mirboo North Newspaper Co-operative Ltd, Rural Industries Cooperative Limited, and the SouthEast Housing Co-operative Ltd.

The development and production of this publication was funded by a grant provided by Consumer and Business Affairs Victoria to the Co-operative Federation of Victoria Ltd.

Disclaimer

Published by the Co-operative Federation of Victoria Ltd
71 Franciscan Avenue Frankston VIC 3199
Phone: 97856074
Fax 97856542
Email cfv@australia.coop
Web site: http://www.australia.coop

The Big Picture
Operating Environment
Laws and regulations
Co-operative values & principles
Co-operative enterprises
Business structures
Co-op members
Co-op markets
Mixing members, and users
Your co-operative - past, present and future
Ready to direct?
Surfacing concerns
Session review

Before setting out to define and implement a training program for your co-operative’s current and potential directors, it helps to step back and take look at the big picture.

This session sets out to provide a framework for reviewing and defining what co-operative directors, and members, should know, do and be.

Later sessions look at categorising these competencies and qualities as essential or desirable items and defining development paths for directors.

For a co-operative, the operating environment (OE) includes the:

legislation, rules under which the co-operative operates, and

internationally known and recognised co-operative values, principles and structures.

Members and markets often overlap tightly in the case of classic retail co-operatives. In other cases, such as an artists’ co-operative that sells mostly to non-members, a co-operative’s clients may be quite different from its member

Suggestions for discussion

Does the picture on the previous page fit your co-operative? Why or why not?

· How much overlap is there between your members and markets?

Need to know?

· Does your Board know who would miss your co-operative if it

didn’t exist and why? Should they know?

· Do all your Board’s members share the same “big picture”?

· In what ways, would it matter if they didn’t?

~ Case Studies

Case study 23

CPS exists to serve its members and achieve benefits for them that they could not achieve on their own, irrespective of their nature or size. Even though some members are small, they are still able to buy at the same price as the largest member. ~

Case study 23

By early 1997, the owners announced their intention to close the paper. The Mirboo North community held a public meeting and decided to form a co-operative and continue production. ~

Case study 24

The focus of the co-operative is the collective buying of gas — used to heat chicken sheds during the first couple of weeks of a chicken's life ~

Case study 25

~ The SouthEast Housing Co-operative (SouthEast) is a tenant-managed rental housing co-operative that manages housing for low income households in the Southern and Eastern metropolitan areas of Melbourne. The co-op leases 101 properties from the Department of Human Services on a permanent basis for its members. ~

In Australia, co-operatives are primarily regulated under State legislation, rather than Commonwealth legislation. Of course a lot of Commonwealth legislation like the Tax Act does apply to co-operatives. And there are regulations complementing the legislation.

Action in the 1990s helped harmonise the co-operative legislation throughout much of Australia. For instance, the NSW legislation offers cross-references to the Victorian legislation.

The Co-operatives Act and regulations are like the Traffic Act and regulations. You don’t need to know all the details, but you do need to know the rules of the road and be aware of the scale of penalties. You need to know what actions might earn you demerit points and which might cost you your licence or send you to jail.

Likewise your Board needs to know what the laws and regulations say your co-operative must do: in the course of its normal operations (e.g. annual reports, disputes), and in times of crisis (e.g. going broke, winding up).

Suggestions for discussion

Do you have a copy of your co-operative’s rules?

· When was the last time you saw a copy of your co-operative’s rules?

· When was the last time you used a copy of your co-operative’s rules and for what purpose?

•

~ Case Studies

Case study 22

Registration as a business with ASIC was undertaken to enable interstate business to be transacted in States which are yet to adopt the new legislation allowing Co-operatives to register as a Foreign Co-operative in another State. ~

Also – CPS registered as a foreign co-operative in South Australia and assisted in the formation of a South Australian Co-operative, established to service local government in that State, with the extension of its contracts to their members. A number of SA councils continue to use CPS contracts.~

Also -Obtained approval from the Minister for Local Government to operate as an alternative tendering arrangement for Local Government, whereby purchases made by councils through CPS contracts could be included in their “Compulsory Competitive Tendering” (CCT) target figures. ~

Case study 25

Further obstacles were encountered when moves were made to terminate current head leases held by Rental Housing Co-operatives. An Arbitration process initiated by the United Housing Coalition resulted in the DHS accepting that the perpetual lease could not be terminated. SouthEast’s solicitor then had to sort out the complexities of a merger involving three separate head leases. ~

Suggestions for discussion

How much did you know about co-operatives before you joined a co-operative or became a director?

Can you name all 7 internationally recognised co-operative principles? Which ones surprise you least?

Need to know?

· Should your Board know about co-operative values and principles? How much do they need to know and why?

Co-operative enterprises

Co-operatives are enterprises with social purposes. Co-operatives engage in a range of economic and social activities from manufacturing dairy products to providing taxi services, affordable housing, radio and television services, to selling books and marketing arts and crafts.

In Australia, co-operatives have been commonplace in the agricultural sector for many years. These days, rural communities are being encouraged to form co-operatives to supply telecommunication needs and other essential services.

~ Case study ~

Case study 23

~ By early 1997, the owners announced their intention to close the paper. The Mirboo North community held a public meeting and decided to form a co-operative and continue production. ~

to be the local shire information point and we are supportive of a

local banking co-operative that is currently being established). ~

Case study 24

~ The focus of the co-operative is the collective buying of gas — used to heat chicken sheds during the first couple of weeks of a chicken's life.~

Suggestions for discussion

Can you name 5 co-operatives beside your own - either in Australia or overseas? Why do you think those organisations are co-operatives?

· Can you recall any instances where co-operatives have been formed to

provide services which commercial and government entities couldn’t or

wouldn’t?

· Why are railways, cruise ships and airlines rarely run as co-operatives, when co-operatives are so common in agriculture, fishing, marketing, retailing, and housing?

Need to know?

· Should your Board know about your co-operative’s history and the history of co-operatives? How much do they need to know and why?

Business structures

The co-operative is an alternative to other business structures, which include:

· Sole trader - a person operating under their own name or a business name,

· Partnership- 2 or more people who jointly share management of an enterprise),

· Company- registered bodies operating under the Corporations Act,

· Joint ventures- 2 or more enterprises coming together on a short or long term basis,

· Community enterprises such as clubs and associations.

While co-operatives have existed for over 150 years, many co-operatives find that banks, government agencies, clients and suppliers are far less familiar with the co-operative structure than the company structure. Likewise, new directors of co-operatives may be more familiar with other business structures.

~ Case study ~

Case study 22

The greatest challenge was to survive a takeover attempt by a competitor (company not a co-operative) in the local government market in 1996. ~

Case study 25

The Frankston, Oakleigh and Ringwood/Croydon Rental Housing

Co-operatives completed a formal merger of their co-operatives on 12 June 2000 to form the SouthEast Housing Co-operative Ltd

The first major hurdle was to convince the DHS, under the previous Government, that a co-operative structure was preferable to a public company structure and that sufficient

accountability mechanisms had been built into the legislation to accommodate their requirements.

By early 1997, the owners announced their intention to close the paper. The Mirboo North community held a public meeting and decided to form a co-operative and continue production. ~

to be the local shire information point and we are supportive of a local banking co-operative that is currently being established). ~

Case study 24

~ The focus of the co-operative is the collective buying of gas — used to heat chicken sheds during the first couple of weeks of a chicken's life.~

Suggestions for discussion

What do you consider are the advantages of a co-operative compared with other business structures?

· Can you recall any instances of a co-operative becoming a company or

vice versa? What might lead to such a change?

· Do you know of any co-operatives that own and operate companies? Or

vice versa?

· Can you recall any instances of one co-operative trying to merge with another, just as company might merge with another? What was the driving force?

· How does being on the Board of your co-operative differ from:

· running your own business?

· being on the committee of a club or association?

Need to know?

· How much do you expect your Board to know about the co-operative business structure compared to other business structures?

Without members, there is no co-operative and no need for Board members. The co-operative exists to meet the need of its members.

The members elect the Board. Members can and should hold directors responsible for achieving the co-operative’s vision and mission, and managing its financial affairs and legal obligations. Accountability to members is a key responsibility of a

co-operative’s elected leaders.

Members’ key rights, responsibilities and roles are summarised below.

Members’ rights

· information,

· a fair hearing,

· safety ,and

• choices in their dealings with the co-operative, Members’ responsibilities

· set the co-operative’s objectives,

· decide its rules, and

• exercising ownership control over the co-operatives growth, Members’ roles

· use the services of the co-operative,

· elect capable directors,

· attend general meetings,

· respond to surveys,

· provide capital for operation and expansion, and

· study the Board’s report and the auditor’s reports.

~ Case study

Case study 22

Membership was initially confined to local government; councils paid $10 for nominal share capital and a $990 refundable joining fee, i.e. $1,000 on joining.

This was to provide some working capital until the scheme became operational and began to generate income to a level sufficient to cover costs.

The $990 was refunded together with a dividend after the first full year of operation. An annual fee of $300 was retained until 1995, when it was abandoned.~

Also - To maximise potential, CPS found it important to communicate with members to ensure the persons with the purchasing responsibility are aware of the potential savings. ~

Also - The competitor argued that there was economy of scale, big is beautiful, with councils amalgamating to achieve savings a similar result could be achieved by merging the two purchasing schemes

CPS was able to demonstrate its greater cost effectiveness in terms of net profit to

turnover and convince members that local government and other members were in a far better position having a choice, which would be removed with a merger – no more competition. Imagine grocery prices if there was only one supermarket chain to shop at. ~

Case study 23

~ We formed our co-operative in July 1997 and have gone from strength to strength. We have around 100 shareholders and more than 50 people are involved every week in writing, taking photos, gathering advertisements, typing, folding, running the co-operative etc. ~

Case study 24

~ Membership of the cooperative is open to all VFF members, but initially it was the membership of the Chicken Meat Group. At present, the co-operative has 250 members. ~

Case study 25

~ The members elect the members to become the directors of the board, SouthEast also has three Area Committees who assist in the running of the co-operative based at Oakleigh, Frankston and Ringwood/Croydon.~

Suggestions for discussion

How are members assessing whether your co-operative and its Board are doing the right things well enough and effectively addressing their expectations?

· How much interest are members showing in joining the Board? Are elections contested?

· What criteria do members use to choose between candidates for the role of director? How important are commitment, level of contribution and availability?

Need to know?

· How much do you expect your Board to know about the co-operative’s members and their expectations of the Board and the co-operative? Why?

· What responsibilities does your Board have to members (e.g. keep relations between members and directors open and transparent)?

Your co-op rules may document the principal activity and objects of your co-operative. But the rules do not fully define your co-operative’s markets. Grounding members’ expectations requires a good understanding of the current market(s).

Where a co-operative’s current markets are beyond their founders’ dreams or nightmares, members’ expectations may remain unrealistically low or ridiculously high.

•

~ Case study

Case study 22

With continuing changes in legislation and the way in which councils are empowered to do business, there is always a threat that the level of business in that sector can diminish.

CPS must continue to diversify and expand its membership and will continue to do this in the Co-operative sector, not only in Victoria but nationally.~

Case study 22

Also - through recognition of established expertise CPS has been approached to provide consulting services to other organisations with significant memberships, which desire to provide “buying scheme” service benefits to their members.

This provides another income stream and profits generated will be included in our overall income, the surplus of which will be returned to our members as in the past.~

Need to know?

How much do you expect your Board to know about the co-operative’s markets, clients, competitors and marketing strategies? Why?

Mixing members and users

The users to whom the co-operative supplies goods and services may be a mix of members and non-members.

Where non-member users provide more of a co-operative’s income than do member users, a Board may focus more strongly on the non-members than members. A co-operative may also have a minority of member users and a majority of non-member users. Both can cause difficulties regarding the co-operative business structure, principles and values.

~ Case study

Case study 22

to best advantage and utilising the

~ It is equally important to

promotional options available to communicate with suppliers to them.~

ensure they are marketing themselves

Suggestions for discussion

· Are your members the users of the co-operative?

· Does your co-operative have members who are not users? Why?

· Do you have users of the co-operative’s services who are not members? Why?

· Does your co-operative encourage non-member users to become members and how? Why or why not?

· Does the co-operative have more transactions with non-member users than members? Is this a problem for the co-operative? Why or why not?

· Do members have a right to more information or more favourable terms than other users?

· Do you monitor user and member satisfaction?

Your co-operative - past, present and future

Dealing with	Past & present focus	Future focus
Members	Provide accountability	Formulate strategies
Workforce	Monitor and supervise	Make policy

Having a sense of history and a rough idea of where it would like to be in 5 years time helps a co-operative determine priorities and look at what it needs to learn to survive and prosper.

As shown in the table below, co-operative enterprises need to simultaneously focus on the past, present and future on dealings with members and their workforces.

The co-operative’s Board provides direction while staff or member volunteers work to implement the vision and plans. The Board may need to communicate the co-operative’s mission, strategy, values and financial goals to a management and workforce distinct from the ordinary members.

Together the Board and management work on the big issues and a better future.

Issue	Big question
Business Planning	What are we going to do?
Business Requirements	What do we need to do it?
Quality process	How are we going to do it?

Under the Co-operatives Act, it is the Board of Directors that is responsible for issuing instructions to the Manager, Secretary-Treasurer or others involved in the day-to-day management of a co-operative.

The Board’s chairperson provides the main link between the Board and management. That includes providing guidance to management between Board meetings, while remaining responsible to the Board for all actions undertaken on its behalf.

All Board members share responsibility for providing leadership to co-operative’s management and workforce.

~ Case study

Case study 22

The most important element of success is to have a good team running the co-operative. It is important to have a Board of Directors with an understanding and interest in the core business and able to contribute ideas on process. It is important to have suitably qualified and dedicated staff to implement Board policy and carry out the day to day administration. …

Case study 22

It is also essential that there is a good relationship based on trust and

understanding between the Board and staff – they must see themselves collectively as a team, each with their key positions, but united with a common goal of achieving the Co-operative’s objectives. ~

Case study 24

The day-to-day management of the co-operative is conducted by the Executive Officer of the VFF — Chicken Meat Group, who is the organization’s secretary. ~

Ready to Direct

· What responsibility does your Board have to enhance management accountability to the Board?

Directors of any co-operative have an obligation to adequately equip themselves, so they can:

· set policy,

· guide strategic directions, according to the mission and plans of the organisation, in ways that fairly and knowledgeably reflect the interests of the membership,

· approve capital expenditures and operating budgets,

· ensure adequate resources are provided and managed effectively to achieve the organisation’s goals, and

· assess the Board’s performance.

In co-operative philosophy, being a director is less about having specialised training and expertise, and more about having:

· an understanding and acceptance of membership ownership and control

· time and commitment that will vary depending on the scale and

complexity of the co-operative’s business activities. Canada’s

Mountain Equipment Co-op suggests its directors should expect to allocate at least 40 hours of their time per month for Board

responsibilities. This includes attending 8 – 10 Board meetings a year and serving on 3 or more committees that hold monthly

teleconferences,

· knowledge of the co-operative’s rules

· enough common sense and reason to understand financial reporting and make sound business decisions, and

· a desire to work with the co-operative in meeting its objectives.

A co-operative’s budget may set aside funds for the purpose of training, before or after joining the Board can develop director’s skills.

Since the work of a Board is to take decisions, it often helps if directors:

· can understand accounts or read a balance sheet,

· have experience of planning some course of action for more than a few days ahead,

· have experience of giving orders, and

· have supervised the work of other people.

Suggestions for discussion

Board activities

· Does your co-operative already have a statement of the role of its directors? If not, why not?

· What does your Board spend most of its time doing? How informative are the minutes of your Board meetings?

· What do directors spend their time on outside Board meetings?

· How would a job description for a member of your co-operative differ from that for a director?

Advice and support

· What helpful advice could you give to potential directors, new directors, or to experienced directors?

· What advice do you wish you had been given when you became a director?

· What could help you function more confidently as a director of your co-operative?

Need to know?

· Can your Board function effectively without knowing which of its members have mastered the knowledge and skills directors need and which are ready to learn?

Before forming or joining a co-operative or the Board of a co-operative, members often fail to confront their dreams and nightmares.

Many of those fears and frustrations are addressed by the co-operative framework and rules. Passing of rules and development of procedures or arranging insurance can address other concerns.

Still, managing risk is a major part of any Board’s role and that includes managing the risk that directors will burnout or find their workload becomes unsustainable. A wise Board works to keep workload sustainable and satisfying for each of its directors.

A good reality check on these concerns is to look at the current activities and concerns of your Board.

Directors may enjoy some aspects of serving their board such as:

· chance to make a difference – achieve goals and improve service to members,

· early advice about what’s happening / potential projects,

· the opportunity to get to know other Board members and learn from them,

· chance to learn new skills or apply/develop existing skills,

· fun and friendship, and

· diversity of minds and opinions.

Directors may dislike some aspects of serving their board such as:

· meetings, bloody meetings,

· reading load,

· inevitable phone calls, faxes, emails at work and home,

· financial, emotional, other risks

· boredom (More of the same — especially where “I’m on other boards as well”),

· time needed to consult others, and

· not enough of the right sort of information.

· Can additional rules offer a way to manage risk?

· Do you know what the directors of your co-op like and dislike about their role? Is there much consensus? Do their likes and dislike include any of the items listed above? What would they add to those lists?

Need to know?

· Can your Board function effectively without surfacing the concerns of its members and addressing them?

Now that you have completed the first session for this program, it’s time to review this session and prepare for the next.

Suggestions for discussion

This session

· What did you like or dislike about this session as a learning process?

· Did you make any decisions about developing your co-operative’s

directors or draw any interesting conclusions from this session’s

discussion?

· Do you see a need to start working towards:

· Agreed job descriptions for directors, Chairman, Secretary-Treasurer or other officers?

· Listing the Board’s current & desired competencies (knowledge, skills attitudes and behaviours)?

· Listings of preferred pathways for enhancing existing competencies and moving toward desired competencies? and

· Agreed performance indicators for the Board?

· What other outcomes are you now expecting and why?

Next session

· Can you set a time and a place for your next meeting?

· Are there issues or questions arising from this session that you would like to discuss in the next session?

· Do any arrangements need to be altered for your next meeting e.g. Will you use the same facilitator?

· Do you want to taperecord the session or take notes on butcher’s paper as you go?

· Do you need additional resources or people?

Acknowledgements

ALCC wishes to thank all who contributed to the development of this program including the Co-operative Federation of Victoria Ltd, ALCC members, staff of the Registry of Co-operatives in Victoria and NSW, Ballarat Community Development Co-operative Ltd and our case study Victorian co-operatives, namely Co-operative Purchasing Services Ltd (CPS), Mirboo North Newspaper Co-operative Ltd, Rural Industries Cooperative Limited, and the SouthEast Housing Co-operative Ltd.

The development and production of this publication was funded by a grant provided by Consumer and Business Affairs Victoria to the Co-operative Federation of Victoria Ltd.

Disclaimer

Published by the Co-operative Federation of Victoria Ltd,
71 Franciscan Avenue, Frankston VIC 3199
Telephone: 03 9785 6704
Fax: 03 97856542
Email: cfv@australia.coop
Web site: http://www.australia.coop

Getting down to essentials
DIY director’s job description
Directors obey laws and rules
Directors have ethics
Directors represent their co-operative
Directors account to members
Directors assess markets
Directors manage risks
Directors understand the business lifecycle
Directors plan strategically
Directors counter “hospital toast” syndrome
Essentials and desirables
A learning organisation?
Smashing learning barriers
A balanced Board?
Balancing the Board
Sustainability
Performance indicators
Session review

Take a look at outlined at Resources 10, 11 and 12 of the Resource Book. Remember you can keep developing your job description for directors as you work through this program and even after that.

This session moves in from the big picture to look at: a possible job description for the director’s role,

some of the details of the director’s role, and

the issue of what is essential for the Board Vs what is essential for any individual director.

People who wouldn’t buy a pig in a poke may be prepared to take on poorly defined roles as directors of a co-operative. Whether this is necessary or desirable in the case of people taking on directorships of a co-operative is another matter.

~ Case Study ~ ~~~ ~~~~~ ##

~ It is important to have a Board of The Board has appointed 3 of its Directors with an understanding and number to a Finance and Marketing

interest in the core business and able Committee under specific powers of

to contribute ideas on process. delegation. The Board and Committee

meet in alternate months. ~

Suggestions for discussion

Where would you seek advice on the interpretation of the Act? From your own lawyer or from the Registry of Co-operatives, The Co-operative Federation of Victoria Limited or some other source?

· What steps can you take to ensure your co-operative has adequate working

knowledge of the legislation and regulations within its Board?

· What is your best hope of keeping up to date with changes to the Act? Is it the

Registry of Co-operatives, The Co-operative Federation of Victoria Limited or

other associations? Using reference sites? Meeting with other co-operatives?

Try using the triple bottom line to help you list examples of ethical behaviour. You might find it easier to start listing unethical behaviours and then identify their ethical counterpart.

Check out Resources 3, 4, 8 and 13.

•

~ Case study

Case study 23

~ We aim to return benefit to our community (we sponsor a number of events open to the community such as guest speakers, as well as supporting young people through awards at the local school).

We aim to explore related enterprises and support other co-operatives establishing (for example, we are exploring being an Internet access point and already have won a tender to be the local shire information point and we are supportive of a local banking co-operative that is currently being established). ~

Suggestions for discussion

Is ethical behaviour an essential item for co-op directors?

What do you regard as ethical and unethical behaviour? Consider conflicts of interest, sexual harassment, copyright infringements tax avoidance, persistent late payment of suppliers, playing favourites or interfering with the work of staff.

· What ethical standards should you apply to advertising and promotion or

investment ideas or to selection of members, clients and suppliers?

· Does your Board have a shared understanding of ethical behaviours? Does this

matter?

· In ethical terms, what are the director’s responsibilities to each other, the

members and the co-operative’s clients and suppliers?

· Are ethical demands more compelling than the requirements set out in your

co-op’s rules and the Co-operatives Act?

Directors represent their co-operative

Directors have dealings with a range of stakeholders in addition to members and the co-operative’s workforce. The way they conduct themselves will reflect on the

co-operative. Their effectiveness in lobbying governments or funding bodies, or handling the media can have significant consequences for the co-operative.

~ Case study

Case study 25

~ The merger of the co-operatives followed two years of very difficult negotiations and hard work by members and their staff member. Negotiations took place at two levels, between the participating co-operatives’ membership and with the Department of Human Services (DHS). ~

Suggestions for discussion

Besides members and staff, what stakeholders do your directors have dealings with?

· Do your directors ever meet directors of other co-operatives or visit other co-operatives?

· Does your co-operative still have to explain its structure to clients, suppliers, government agencies and the general public? Is this a problem?

Need to know?

· How can your Board assist directors to better represent the co-operative? Consider media training, information kits and promotional material, contact databases and more!

Directors account to members

The Annual General Meeting (AGM) and the annual report are some of the ways directors account to their members. They shouldn’t be the only ways, if there is to be effective dialogue between members and their board.

Members may be invited to attend board meetings, assist on committees and working parties established by the Board. Members’ opinions may be sought via surveys or focus