The current pandemic brought out the best and the worst in every institution be it private or government. It generated mixed emotions from all corners of the globe and cooperatives are not exempted from this pandemonium that disrupted business operations of all entities. Others view it as a reminder from the Almighty while some view it as a “plandemic” designed to depopulate the universe? If you ask me how I view it, I guess it is an occurrence that challenges people to reflect and realize the essence of life in this world.
My partner in this column had shared the significance of learning from others as we listen, observe and communicate. Allow me to share some thoughts on why some cooperatives and businesses suffer setbacks. It might not be a perfect description of a management model but I hope some readers can learn from it. Some of it might be found in literatures and I am asking permission to add some observations, experiences and stories that can help us learn from the experiences and sharing of others.
Board of Directors of cooperatives especially those with residential bond of membership come from various backgrounds. They carry with them different cultures and often needs to be aligned with the cooperative operations and environment. Others may have reached certain levels of education and the worst thing that may happen is when they assume to know everything. I heard a story of one cooperative manager that got hurt when some Board of Directors asked about educational attainment with a side comment of being a BS degree holder. In fairness, I salute General Managers regardless of educational attainment. I saw in them passion to lead towards changing peoples’ lives by motivating staff and members to support the cooperatives they own. I am inspired by stories of great tycoons that revealed they graduated from School of Hard Knocks.
I go with management experts’ observation that some elected Board of Directors has no clear understanding of their actual functions and accountabilities as individual director or as a collegial body. Some best practices of cooperatives is the conduct of officers orientation every after General Assembly when composition of the Board and Officers is reorganized as a result of election and appointment. Officers especially the Board should know when to act as an individual member or when sitting en banc. Most often, a board of director can function on an individual capacity if granted or delegated a duty to perform. The Chairperson is often clothed with the authority and responsibility to represent the cooperative in various transactions. Adhoc Committees can be formed to perform specific duties based on a consensus of the Board sitting en banc. In some instances the Board delegates some of its functions to the General Manager or Chief Executive Officer though on specific areas.
In some sharing and literature even well-educated Board of Directors lack sufficient knowledge in finance and accounting. It might be that they fail to appreciate it or it’s not their field of interests. The tendency is for the Board to rely on the explanation of figures by the General Manager or Bookkeeper. This scenario brings us to the importance of undergoing financial literacy seminar and does our best to learn and appreciate figures.
I have heard of some Board of Directors that fired CEO/GM based on unfounded allegations only to find out they made the unfavorable decision leading to some financial costs at the expense of the cooperative. The good thing is when members are vigilant and assert that the Board of Directors are accountable to their decisions especially when the members were not consulted or the actions taken were inimical to the interests of the cooperative. Another story I heard is a case filed in court to cover up lapses noticed by regulatory bodies. (To be continued)