CDA issues Governance Template for Co-ops
Having trouble drafting the code of governance of your co-op? The Cooperative Development Authority (CDA) makes life easier for co-op leaders and has issued in May a template on Good Governance for co-op leaders.
CDA issues Governance Template for Co-ops
Having trouble drafting the code of governance of your co-op? The Cooperative Development Authority (CDA) makes life easier for co-op leaders and has issued in May a template on Good Governance for co-op leaders.
The template appeals to the Filipino family values. It likens co-op directors to parents and encourages them to care for co-op stakeholders as parents would towards their children. Section 3 on “Diligence of a Good Father of a Family” says: “In the performance of its duties and responsibilities, the BOD should take into consideration the welfare and well-being of the general membership and its employees as well as the advancement of the cooperative, the community and the nation in the formulation of resolutions and policies. As such, it should exercise its functions with due care and prudence like a good father of a family and must be thoroughly knowledgeable on the management and operation of its cooperative.”
In addition, the template encourages co-op leaders to support the union’s or federation’s programs and activities where the co-op is a member.
This dispels ideas by some co-op directors that they personally own the co-op, the employees are their servants, and the members are their beneficiaries.
Section 2 draws the boundaries of members, board members and the management. The BOD sets policies, the administration tends to the affairs, and members cannot interfere in the management of the co-op, unless there has been “fraud, bad faith or negligence which will amount to a breach of contract.”
Furthermore, the Board has limits to its powers, as the template emphatically states: “There are some powers reserved to the members which cannot be exercised solely by the directors until they are approved or ratified by the members.”
Sections 6 and 7 also draws a clear-cut line between the power of the authority of the Chairperson and the powers of the General Manager. Cited was Rule 7 of the Revised IRR of the Cooperative Code.
The template emphasizes that “the relationship between an elected Board and professional management is complementary and mutually reinforcing.”
Handling of information is also given importance, as Management is responsible for furnishing the Board with complete information for the Board to make key decisions. Management is also tasked with providing background and explanatory information on documents, budgets, plans and financial statements.
Internal Controls are also defined in Section 9.
Transparency is put at a premium, as Article XI states: “The Board should ensure that there is a clearly written policy for relevant information to be provided to members. Such information can include the by-laws, latest audited financial statements and annual reports. Annual reports should be made available in the cooperative’s office for members’ information or webpage if any.”
The amount of compensation and per diem received by members of the Board should be in accordance with the responsibilities of the position and the financial capacity of the cooperative.
Managers, even if appointed by the Board, “should not be beholden to any member of the board and should not campaign during elections.”
All members are enjoined to respect the decision of the General Assembly, which is the “highest policy making body of the cooperative.”
Article 10 outlines how the stakeholders of the co-op should handle the assets of the co-op, emphasizing that the co-op should have written policies and procedures on financial and investment matters.
The template may be downloaded from the CDA website, www.cda.gov.ph