Cooperative by-laws provide that Board of Directors conduct meeting at least once a month. Some medium and large cooperatives even provided policy on special meetings to discuss urgent matters. Among the observed strengths of cooperatives is the presence of interim financial statements prepared by bookkeepers/accountants. However, some cooperatives fail to recognize the importance of having complete reports for decision-making. I go with one observation and statement “What is the use of having a Regular Board Meeting without an Interim Financial Statement?” As they say, “music is language of the soul”, “financial statement is the language of the business”.
Some cooperatives have prepared reports in advance while others are given just in time or during the meeting. This causes some half-baked decisions if discussed in passing just to dispose with the agenda. The tendency to sacrifice sufficient time for discussion of complex issues affect the free exchange of ideas with limited opinions shared or expressed. On the other hand, some Board of Directors passes the task to the General Manager/CEO to address pending issues with delegated authority and responsibility. I cannot blame some Board of Directors that sought position in the cooperative for some reasons other than helping the cooperative grow given their wisdom as elected officers.
The reasons vary and that be between the officer and the word integrity.
In some instances, the functions of the Board of Directors are not reviewed after assumption to office. Lack of understanding on the functions of the Board from that of management staff often leads to miscommunication if not confusion. When this happens it is expected that overlapping of functions occur. Clarity and delineation of functions need to be understood based from organization structure, functional chart and manual of operations that detail job descriptions or responsibilities.
Another issue is when the Board of Directors doesn’t fully understand the complex set-up of the cooperative business. I remember one scenario when a Board of Director of a large cooperative disregarded the need for turn-over of resigned employee as it was perceived that the tasks can easily be performed by any staff. As of this writing, the cooperative failed to operationalize its automated service to the detriment of the members and the general public. The irony is that management was being blamed for the non-turn over while the fact states that the Board accepted the resignation letter given a Board Resolution. Another bias is when some officers sanitize records and provide a one-sided story of situations. Such scenario violates the essence of transparency in cooperative governance. I am not referring to specific scenarios but just providing some realities that can help us understand the importance of relationships in organizations.
Add to this, lack of appreciation of the business and statutory requirements can lead to possibility of penalties and charges for late reports. Cooperatives with many branches and satellite offices should watch for this scenario. Given some changes in government policies like the BIR requirement for “sub-TIN” for branches and satellite office, there is a need to comply on the submission of required reports. Every delay can mean a lot as penalties are imposed. When the Board assumes that they know every aspect of the business that they can appoint anyone to become the CEO/General Manager, then I guess, this write up begs to disagree. A CEO/GM must possess the required attitude, skills and knowledge otherwise the cooperative can face a disaster. For even businesses with billion dollar assets crumble even with the hiring of an experienced CEO outside of the company. In short, decision can make and unmake an institution.
In my stay with the Regional Office, I noticed that some cooperative officers and staff took for granted issued circulars and advisories from the Authority. However, when penalties for late reports were imposed, some alibis surfaced. I don’t intend to be perfect but if most cooperatives can comply with the requirements on time especially those from the outskirts then what makes it difficult to those in the urban areas? We understand the predicament of some micro and small cooperatives. But prior to registration, CDA personnel emphasize the need to sacrifice time for the cooperative. Others were encouraged to better join existing viable cooperatives since forming a new cooperative entails gargantuan tasks. At any rate experience is the best teacher and I am included in that argument.
Finally, the need for Board of Directors to appreciate the importance of risk management is necessary. Actions or decisions when not fully studied can lead to problems that can affect financial position of cooperatives. It is expected that Board of Directors and Officers that decide on crucial matters fully understand the implications of their collective action. It must be emphasized that they are accountable for their decisions and consider the possible effects in the cooperative operations. We have heard of cooperatives that went stagnant with some issues on abjure of membership and transfer to fast growing and progressive cooperatives. In the long run, our intention in writing this piece is to help remind on the need for a harmonious Board and Management relations. Nothing will happen when the Board and Management relation breaks down as seen on status of various cooperatives that reached legal battles.
