How Co-op Directors are Selected

Director selection methods can vary according to the cooperative's size, structure, and function. A method that works well for a small local-area centralized cooperative may not be suitable for a large federation of local or regional cooperatives disbursed regionally or nationally.

Equal or equitable

Larger organizations must be more attentive to equal or equitable representation when deciding on selection methods and voting rights. Cooperatives' democratic control principle has been interpreted most commonly to mean equal voting rights, yet the principle does not preclude using proportional voting to achieve equability in serving members.

Selection methods under normal circumstances are presented here. Not covered are situations requiring the filling of an unexpired term, or when mergers and consolidations occur.

Usually, but not always, the cooperative's bylaws provide guidance on how directors are to be selected. State statutes may contain provisions related to director selection.

The nominating committee is presented as the preferred method, although valid rationales exist for alternatives.

Democratic or proportional

Many cooperatives elect directors "at large," meaning the entire membership can vote directly to fill each director position, and each director represents the entire membership. As a cooperative grows, or the composition of its membership changes, or combines with one or more other cooperatives, the "at-large" method may become impractical.

A cooperative then must develop a different system to produce equitable representation of the membership. One method is to divide the cooperative's territory into geographical districts with nearly equal membership numbers. Another is to establish roughly equal territories based on volume of member business. Some cooperatives may establish districts along major commodity lines. A few large cooperatives have provisions for a public "at-large" director who can contribute a special expertise, such as an energy economist, a lawyer, or a financial or governmental affairs specialist.

Nominating committee

The making of an effective board of directors begins with the proper use of a nominating committee. This small committee, typically three to five persons, can exert significant influence on director selection even though most cooperatives' bylaws provide for nominations from the floor.

How the nominating committee is selected can vary. Bylaws may determine the procedure. Additionally, a handbook describing the duties of the nominating committee would be helpful.

The committee may be appointed by the board chairman, or elected by the membership. Regardless of method, the members need to be familiar with director qualifications, the articles and bylaws, and leading candidates among the membership. Directors, hired management, or staff should not serve on the committee. However, former directors have the experience to be good committee members.

Through personal contact, nominating committee members ask potential candidates whether they are interested in serving on the board and also determine if they meet the qualifications specified in the bylaws. A biographical sketch of each candidate should be developed and made available to the membership before the election. An ideal slate offers at least two candidates for each position, thus giving members a choice.

Some cooperatives may have such a large membership or be so widely scattered that district member caucuses may be needed to nominate candidates. In some cases, members nominate candidates through mail balloting, with the two candidates receiving the highest number of nominations becoming part of the official slate.