United States

Department of

Agriculture

Rural Business–

Cooperative

Service

RBS Cooperative

Information 

Report 58

Assessing Performance

and Needs of

Cooperative Boards 

of Directors
Abstract This report provides tools for assessing cooperative boards of directors. It contains

information and exercises in assessing a board in three ways: (1) director’sselfassessment (assesses seven areas related to a director’s responsibilities and duties),

(2) assessing the cooperative board as a single entity (assesses how well directors

work together), and (3) assessing board meetings (measuring the productivity and

effectiveness of meetings).

Cooperative boards can use assessments to identify problem areas and weaknesses

and subsequently devise programs, plans, and training methods to remedy them. An

assessment should be conducted regularly. Improvements should be made and

progress tracked.

Keywords: directors, responsibilities, assessment, weaknesses, improvement

Assessing Performance and Needs of Cooperative Boards of Directors

James J. Wadsworth

Program Leader

Education and Member Relations

Rural Business-Cooperative Service

Cooperative Information Report 58

October 2000
Preface The cooperative board of directors—the connecting link between members and hired

management—is an extremely important body in the makeup of a cooperative. Elected

by members, directors are charged with setting the cooperative’s policy and objectives

and setting the course it will follow in achieving those objectives.

Directors must be well versed in many critical areas. Directors come from diverse

backgrounds, abilities, and experience levels, but most find the many responsibilities

challenging. Serious directors find their role to be an ongoing learning process,

whether board veterans or newly elected. Dynamic changes in agriculture and cooperative structure make being a director all the more challenging. To keep primed in carrying out their functions, directors should regularly assess their performance and abilities

in search of improvement.

This report helps directors assess their individual abilities and areas for improvement,

how well the board performs as a body and how it can improve, and the productivity

and effectiveness of board meetings. Assessments will help spot problem/weak areas

needing improvement. In some cases, formal training may be necessary. In others, it

may simply take some reading or tutoring. Improvements will flow from regular assessments.

i
Contents Director Responsibilities and Duties .......................................1

Director Assessments ..................................................2

Director Self-Assessment ...............................................2

Assessing the Entire Board ..............................................3

Assessing Board Meeting Productivity ..................................... 3

Improving Weaknesses ............................................4

Summary ............................................................4

Exercise 1—Director’s Self-Assessment ....................................6

Exercise 1, Part I—Rating Director Attributes ............................6

Exercise 1, Part II—Director’s Self-Assessment Summary ................10

Exercise 2—Full Board of Directors Assessment ............................11

Exercise 2, Part I—Rating Board Performance Areas ....................11

Exercise 2, Part II—Director’s Individual Board Assessment Summary .......14

Exercise 2, Part III—Overall Board Assessment Summary ................15

Exercise 3—Board Meeting Productivity Assessment .........................18

Exercise 3, Part I—Rating Meeting Attributes ..........................18

Exercise 3, Part II—Director’s Individual Meeting Assessment Summary .....20

Exercise 3, Part III—Overall Meeting Assessment Summary ...............27

A Director’s Pledge ...................................................23

References .........................................................24

i
iii
Assessing Performance and Needs 

of Cooperative Boards of Directors

James J. Wadsworth

Program Leader

Education and Member Relations

Rural Business-Cooperative Service

U.S. Department of Agriculture

Directors areresponsible for governing their

cooperatives by acting in concert as a board to set policy, oversee operations, and make top-level directional

decisions affecting the welfare of the cooperative and

its members. The board of directors exercises general

supervision and control over the business and affairs

of the cooperative. The specifics are usually established in the organizational bylaws. Each director’s

understanding of and ability in his/her role in the governance process influences the effectiveness of a board.

An effective board is a key ingredient in a healthy

and successful cooperative. When a board is less than

fully effective, the problem can be traced to four causes—lack of qualified and experienced individuals;

inadequate or ineffective nominating procedures; conflicts between board and management; and absence of

effective board orientation and training.

Comprehensive and well-carried-out board and

director assessment exercises can ensure that these

four detriments to effectiveness can be avoided.

Assessment activities lead to identifying and correcting problem areas (relating to director performance

and abilities), and thus, to improving the board.

This report shows directors how to conduct three

different assessments directly tied to their responsibilities and duties: 1) director self-assessment; 2) full

board assessment; and 3) board meeting assessment.

Exercises in each of these areas are discussed in the

text. Actual exercises follow the text.

In developing assessment exercises, it is important to review the various responsibilities and specific

duties directors must perform. Directors need to have

a full understanding of these to effectively assess their

performance and abilities.

Director Responsibilities and Duties

In RBS Cooperative Information Report 55, Coops 101: An Introduction to Cooperatives, Frederick

indicates that directors, acting as a group, areresponsible for setting the objectives for the cooperative and

making decisions that set the course it will follow to

achieve those objectives. Ten broad managerial decisions the board makes are identified:

● Hire a competent manager, determine the

salary, outline the duties and authority of the

position, and formally review his/her performance at least annually.

● Adopt broad, general policies to guide the

manager.

● Develop and adopt long-range business strategies.

● Require written monthly financial reports and

operating statements for board meetings to be

informed of adverse as well as favorable operations.

● Direct the manager to prepare, before the close

of each year, an operating budget for the next

fiscal year for board approval.

● Employ a qualified auditor to make an independent audit at least once each year.

● W ith the aid of the manager, plan and conduct

the annual meeting to keep membership

informed about the status of their business,

including operations, finances, and policies.

● Determine the patronage refund allocation and

per-unit retain level.

● Assure competent legal counsel is available.

● Keep a complete record of the board’s actions.

1
Here are other more specific duties directors are

asked to perform:

● Determine the boundaries of districts, divisions, and locations of operations offices.

● Approve or disapprove major capital expenditures.

● Establish the financial structure and authorize

any basic changes.

● Establish appropriate election and voting procedures to maintain accurate representation of

members, including filling vacancies on the

board or any other corporate body, committee,

or organization that results from such things as

resignation, death, or disqualification.

● Decide what the appropriate relationship

should be with other cooperatives and associated organizations.

● Determine corporate membership in other

organizations, associations, and federations.

● Establish the responsibilities and duties

assigned to individual division boards and the

individual committees.

● Establish basic policies about legislative or

administrative decisions on local, State, national, and international levels that affect the welfare of the member-producer.

A director should not expect to receive special favors

from the manager or employees. A director does not:

● Act independently on matters that should be

decided by the entire board.

● Represent special interests, factions, or political

entities.

Directors conduct these duties and responsibilities on their own, during board meetings, and in membership meetings. Directors need to learn and carry

out these necessary tasks and functions. In addition,

directors need to have an in-depth understanding of

cooperatives and the many associated issues. Review

“A Director’s Pledge” listed later in the text. It highlights many of a director’s tasks.

Cooperatives are increasingly developing written

director job descriptions which distinctly outline

responsibilities and duties. The director is required to

sign the description and work to fulfill the expected

requirements.

Director Assessments

Director assessments must be tied to associated

responsibilities and duties. Merely looking at sound

cooperative financial statements (or poor ones) and

pronouncing themselves effective (or ineffective) misses the point. Directors have many duties to fulfill and

financial results in a given time period do not provide

a complete assessment. Cooperatives need to conduct

full-fledged assessment exercises. Such tools are often

overlooked by cooperatives, but they are important

and need to be used, in some capacity, by all boards of

directors.

Each of the three subsequent assessment discussions refers to a comparable exercise in the back of the

report. They outline a number of items (i.e., statements) to be assessed. Some cooperatives may find it

advantageous to modify the items to better fit their

individual circumstances, operations, organization, or

policies. Others may prefer to use different rating and

results analysis systems than those proposed in the

exercises.

Director Self-Assessment

Director self-assessment can be a very useful tool.

Directors elected to the board are often not fully

trained or completely able to perform the many duties

required. A learning curve is involved. Gaining necessary experience takes time. However,directors who

lack experience and ability can lessen the time needed

to gain pertinent knowledge and ability by completing

a self-assessment exercise and then diligently working

on areas that need improvement. Even experienced

directors could use improvement in certain areas. The

challenge is to take the initiative to identify such weaknesses and seek improvements.

Exercise 1 offers a director self-assessment. Many

of the statements included were gleaned from work by

Harold Chapman (The Contemporary Director: A

Handbook for Elected Officials of Co-operatives, Credit

Unions, and Other Organizations). Exercise 1 has two

parts. Part I is an objective candid rating of a number

of director functions/duties/abilities under seven different areas—personal competence, board operations,

managerial aspects, finance, policies and planning,

member relations, and leadership. Part II summarizes

director ratings and provides ideas on how to improve

self-diagnosed weaknesses.

The board should consider discussing some of

the major weaknesses identified from the self-assessments to surface ideas for improvement programs.

Sometimes, a single program can alleviate a problem

area identified by a number of directors. 

While a committee to summarize individual

results into one composite report isn’t essential in this

assessment exercise, the board should track director

needs and the types of training used. Such information

will be useful in future assessments and training programs.

2
Every director should complete and use the selfassessment once he or she has participated in several

board meetings and has had a chance to become familiar with his or her duties and responsibilities. It is difficult to mandate a specific time interval for directors

to provide self assessments. A specific schedule isn’t

necessarily the key to improving performance.

The key is to conduct the self-assessment and

then actively monitor results. Then it becomes an

active instrument for measuring progress during the

course of a director’s tenure. Directors should regularly look at their assessment while keeping an open

mind on areas to improve, even beyond areas specified

in the assessment. Most directors will be able to clearly

see where they’ve made progress or need further

improvement. However,adirector should feel free to

take a new self-assessment at any time. Learning to be

a competent director is a continuing process and that’s

the goal of a self-assessment exercise.

Assessing the Entire Board

The next needed assessment is to determine how

well the full board functions in concert as the cooperative’s governing body and what areas need improvement. 

There are many issues to address during a full assessment that are associated with the board’s major

responsibilities. Items will vary from one cooperative

to another although many basic issues arerelevant to

all cooperatives. A full board assessment needs to

answer four basic questions:

● What are the areas of strength?

● What are the areas of weakness?

● How well are directors carrying out required

duties?

● How can the board improve its performance

and be moreeffective?

Every director must participate in a full board assessment so that all opinions are gained. By combining

individual views, the board needs to take a holistic

approach to developing a full-board improvement program.

Exercise 2, a sample full full-board assessment,

can be adopted as is or modified to better suit the individual cooperative. The basis of the items included in

Part I of Exercise 2 is an article in American

Cooperation 1990 (“Effective Board of Director

Evaluation” by Joe Barrett,retired regional manager of

the former Indiana Farm Bureau Association, Inc.). The

article identified key performance areas directors need

to evaluate: planning, operations, finance, members,

director development, general manager, and public

relations. Statements under those headings are included in Part I of Exercise2.

The first three parts of this assessment relate to

the physical process and analysis while the fourth part

is the board’s discussion of the results and developing

action plans to improve performance.

The assessment process of Exercise 2 has three

parts. In Part I, directors objectively rate the board’s

performance in a series of areas under seven headings.

In Part II, directors review their assessment form and

summarize rated items. The director is then asked to

provide ideas or strategies the board can use to

improve noted weak areas.

A board committee or outside objective party

appointed by the board completes Part III of Exercise

2. This summarizes all the director assessment information. A report is developed for use by the board.

A table is provided in Part III to ease the summary. The report should list duty/responsibility items

and how they were rated. The summary identifies

items rated lowest, followed by the next lowest. The

board can then discuss the report’s weakest areas and

develop plans for improvement.

Not only will follow-up assessments at future

intervals identify or expose new weaknesses, but they

will test whether directors feel that improvement has

been made in areas previously considered weak.

Assessment exercises should be completed annually.

The review helps the board evaluate its success in previously identified improvement areas and adopt

actions to improve new problem areas.

Assessing Board Meeting Productivity

Cooperative directors, with their extensive

responsibilities and associated duties, are also busy

operating their own farm enterprises or involved in

other career jobs. Time available to prepare for and

attend board meetings is scarce for most directors.

Much time can be wasted and little accomplished during board meetings if they are not effectively conducted. Well planned and conducted meetings make the

most efficient use of time in accomplishing necessary

tasks.

Assessing board meeting productivity can be a

very useful exercise. Improving weak areas will make

meetings more productive, effective, and enjoyable.

Each director should complete a board meeting assessment. The manager may also participate. The manager

plays an active part during board meetings and may

identify problem areas overlooked by directors.

3
A number of important areas should be

assessed—use of an agenda, procedural conduct, use

ofreview materials, chairman performance, time management, committee reporting, use of board meeting

minutes, and discussion participation.

The two parts of Exercise 3 provide a system for

board meeting assessment. Part I involves directors

(and possibly the manager) assessing a series of meeting attributes. While some of the statements are similar

to those in the full-board assessment, they also apply

to board meeting productivity.

Part II summarizes individual assessments by

identifying problem areas and providing ideas for

improvement. In Part III, an appointed board committee (or outside party) analyzes all the individual

assessments and consolidates them into a summary

report. A summarization table (similar to Part III of

Exercise 2) is used for analyzing assessments. Once the

summary report is presented to the board, discussion

can begin on ways to improve meeting productivity.

The assessment needs to be conducted on a specific schedule because board membership periodically

changes. What worked well with one board might not

fit another. Evaluation should be conducted at least

annually and results compared to the previous assessments to measure progress.

This same process could be followed for meetings

of the various committees, especially if some members

feel those meetings could be more productive.

Improving Weaknesses

The major goal behind these assessment exercises

is not only to evaluate individual director and board

effectiveness, as well as meeting productivity, but also

to find ways that directors and boards can improve

their performance.

Informal training may be sufficient. Some

improvements may be made by simply providing the

director(s) with pertinent reading materials or some

type of individual or group tutoring. Directors can also

help each other. Experienced, effective directors can a

valuable resource for some types of director training.

Management may also participate in tutoring certain

areas.

Formal training may be required also. Director

training workshops are an easy way to target numerous weakness areas and teach a number of directors in

one setting. Many workshops have been held in various locations and times over the years. Workshops

may be organized and implemented by State, regional,

and national cooperative organizations or educational

institutions. For example, State or regional cooperative

councils and centers often provide this service.

Representatives of State departments of agriculture

and governmental agencies such as USDA and university personnel also become involved. Other classes,

conferences, and seminars with director training components are also held periodically by cooperative-related institutions.

Cooperative boards need to proactively identify

weaknesses and implement appropriate methods for

correction. To do so, they need to seek necessary

resources and take advantage of materials, programs,

classes, workshops, conferences, seminars, and other

educational activities.

Summary

Directors have major responsibilities and duties

related to the cooperative’s current and future performance and position and ongoing service and benefits

to members. Directors wear many hats in fulfilling

their obligations. In some cases, director job descriptions may be used to precisely outline responsibilities

and duties.

Directors must clearly know their expectations

and be able to assess where they have weaknesses that

need addressing. Assessment may be somewhat difficult for directors because it requires making decisions

about themselves, but they need to accept that responsibility.Director and board assessments effectively

identify problem areas and weaknesses that can be

improved. Directors must be candid and take assessments seriously. They must work hard to make

improvements and then monitor their progress.

This report provides information and exercises

for cooperatives to use in developing assessment

plans. Three exercises are included. Exercise 1 is a

director self-assessment, Exercise 2 is a full board of

directors assessment, and Exercise 3 is for a board

meeting assessment. Use of all three can lead to an

improved board and better performing cooperative.

W ith active assessment programs, cooperative

boards can seek information and training in needed

areas. There are numerous resources available to cooperatives. Director training workshops are held or can

be developed. Many informational/educational materials also are available. USDA’s Rural BusinessCooperative Service provides many related publications and materials in that regard. Ask for freereports

catalog CIR 4 or visit the RBS Website: 

http://www.rurdev.usda.gov/rbs/pub/cooprpts.htm.

Other cooperative-oriented organizations also have

4
available resources. Cooperative boards must seek out

such resources and make available materials and training that will help lead to improved director and board

performance.

5
Exercise 1—Director’s Self-Assessment

Each director should complete Part I and Part II of this exercise. Next, the board should discuss where training is

needed and how it can be accomplished. Directors should make this document a working instrument for guiding

continued progress and development.

Exercise 1, Part I—Rating Director Attributes

Seven areas corresponding to director responsibilities are included in this assessment—personal competence,

board operations, managerial aspects, finance, policies and planning, member relations, and leadership.

Rate each applicable item using the following system:

Y— Yes, this is not a problem.

U —I feel unsure about this and could use some improvement or training.

N —No, I need improvement or training.

Personal Competence

1. I am able to assess my personal training needs for my role as a director.

2. I fully understand the role(responsibilities and duties) of a director and feel competent to fulfill it.

3. I am able to contribute to the productivity of meetings as an effective participant.

4. I am able to attend board and committee meetings and am on time (emergencies

being exceptions).

5. I am able to effectively inform members and the public of the purposes, structure,

financing, services, legal framework, and operations of the cooperative.

6. I am able to listen and speak effectively with individuals and groups.

7. I am able to prepare and present written and oral reports.

8. I am able to prepare plans for carrying out activities and measureresults.

9. I am able to do my part in directing the affairs of the cooperative consistent with

its bylaws, articles of incorporation, and other relevant regulations and statutes.

10. I am knowledgeable about the potential liabilities of being a director.

Board Operations

11. I am able to work well with other directors and the management team.

12. I fully understand the procedures for appointing officers.

13. I am able to plan, prepare, and participate to maximize group participation in

board decisions.

6

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

Circle one
14. I am able to participate as a member or chairman of a committee.

15. I am able to effectively communicate my opinions and feelings to the board.

16. I am able to participate in all important board discussions and fully represent my

member constituents.

17. I am able to analyze and recommend appropriate per diem, travel, and sustenance allowances for directors.

Managerial Aspects

18. I am able to help establish the job description for the general manager, including

the specific duties and responsibilities.

19. I am able to participate in the recruitment, selection, and hiring of a general manager.

20. I am able to participate in a performance review and appraisal of the general

manager.

21. I am able to participate in establishing compensation for the general manager.

Finance

22. I am able to define financial objectives and develop policies to guide capital and

operational financial decisions.

23. I am able to analyze and approve capital expenditure plans.

24. I am able to interpret the cooperative’s financial statements and assess the viability of the cooperative.

25. I am able to understand financial ratios and analyze trends.

26. I am able to analyze budget proposals and approve the annual budget.

27. I am able to analyze proposals and participate in discussions on major financial

matters.

28. I am able to compare actual financial performance to the budget.

29. I am able to analyze and participate in decisions involving the distribution of net

savings or losses.

30. I am able to understand and analyze the cooperative’s financial investments.

31. I am able to explain the cooperative’s financial position to others when required.

32. I am able to explain the cooperative’s equity redemption program to members.

33. I am able to analyze equity redemption requests and establish redemption policy.

7

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)
Policies and Planning

34. I am able to help establish objectives and policies for operations and services of

the cooperative.

35. I am able to appraise the adequacy of operations and services of the cooperative.

36. I am able to understand feasibility studies and analyze proposed changes and

their implications for long-term operations and member service.

37. I am able to analyze and approve annual plans for services, operations, and facilities.

38. I understand the cooperative’s planning system and actively participate in it.

39. I am able to develop objectives in line with member needs and the cooperative’s

resource base and operations.

40. I am able to participate in brain-storming discussions and provide ideas/strategies relevant to the cooperative’s objectives.

41. I am able to evaluate the effectiveness of plans.

Member Relations

42. I am able to analyze proposals and approve a program and budget for member

and public relations in the cooperative.

43. I am able to evaluate the effectiveness of the member relations program.

44. I am able to communicate well with members.

45. I am able to say no to members in a firm yet tactful manner if the situation warrants it.

46. I am able to represent the cooperative at public functions when requested.

47. I am able to receive ideas and expressions of concern from members and initiate

appropriate action on their behalf.

48. I am able to analyze and approve objectives, policies, and strategies for maintaining effective relations with the public, other cooperatives, and governmental

agencies.

49. I am able to encourage members to attend annual and other meetings of the

cooperative.

50. I am able to establish guidelines for and approve the annual report to the membership.

51. I am able to assist in planning the annual meeting program to maximize member

involvement and input.

8

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)
52. I am able to analyze and make decisions on membership applications.

Leadership

53. I am able to inform others of the history, values, principles, organization, and

functioning of the cooperative.

54. I am able to actively support and promote cooperative activity 

in the community.

55. I actively patronize the cooperative.

56. I fully understand the qualifications for board leadership positions.

57. I keep attuned to agricultural, business, and environmental issues and seek

to be knowledgeable in all issues and concerns affecting the cooperative.

58. I take my role of director seriously and work to improve my performance.

59. I do my best to help my fellow directors and members when asked.

60. I understand that when the discussion and decision of an issue is completed, I

am responsible for supporting the board’s majority's decision.

61. I elicit feelings of confidence, trust, and respect from fellow members. 

9

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)
Exercise 1, Part II—Director’s Self-Assessment Summary

Summarize your ratings by completing the following:

Items (by number) receiving Y ratings include:___________________________________________________________

Items receiving U ratings include: ______________________________________________________________________

Items receiving N ratings include: ______________________________________________________________________

Identify the items/areas in which you feel you need the most training/improvement and, if possible, provide

some ideas/strategies on how to improve.

Item No.__ Improve by————————————————————————————————————————

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Item No.__ Improve by————————————————————————————————————————

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Item No.__ Improve by————————————————————————————————————————

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Item No.__ Improve by————————————————————————————————————————

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Item No.__ Improve by————————————————————————————————————————

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Use more sheets if necessary

10
Exercise 2—Full Board of Directors Assessment

This exercise has three parts. Each director completes Part I and Part II. An assessment results committee completes Part III. Once all three parts are completed, the board discusses the results and decides on a plan by which

to move forward toward improved performance.

Exercise 2, Part I—Rating Board Performance Areas

These assessment statements are categorized into seven overall board/cooperative functions—policies and planning, board and cooperative operations, finance, member relations, director development, general manager, and

public relations.

Rate each item by using the following guideline:

Y— Yes, the board fulfills this responsibility well and needs no improvement.

U —Uncertain, the board’s performance seems to be okay, but could be improved.

N —No, the board’s performance is inadequate and improvement is needed.

Policies and Planning

1. Board policies have been reviewed within the past fiscal year.

2. Board policies have been updated within the past 3 years.

3. A 3-year operating and financial plan is reviewed, updated, and approved annually.

4. The mission statement, major goals, specific objectives, and strategies have been

reviewed within the past fiscal year.

5. The boardregularly discusses business, environmental, and agricultural changes

and potential implications on the cooperative.

6. The mission statement, major goals, and overall strategies have been reviewed

and updated within the last 3 years (long-range strategic planning).

Board and Cooperative Operations

7. An organizational chart has been established and updated for the board and the

cooperative.

8. Both organizational charts have been reviewed within the past year.

9. Position descriptions have been prepared for each board officer and the standing

committees.

10. Position descriptions have been reviewed during the past year and revised as

necessary.

11. Boardreorganization meetings are held immediately after the annual meeting.

12. Standing committee appointments are made within 30 days after the annual

meeting.

11

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

Circle O ne
13. A calendar of board activities iis prepared and a copy is given to each director.

14. Every director and the manager have a copy of the current board handbook.

15. All personnel, operating policies, and bylaws arereviewed annually and revised

if necessary.

16. All directors have signed statements indicating "No Conflict of Interest."

17. Issues about the quality and adequacy of services and products to members are

given as much time as financial considerations.

18. The general manager clearly explains financial and technical reports related to

operations at each meeting.

19. The board works well as a unit with commitment toward common goals.

Finance

20. Credit, borrowing, and other financial policies arereviewed annually.

21. Capital and operating budgets are approved annually.

22. Selected financial ratio goals are established and reviewed monthly.

23. Reports comparing "actual" to "budget" arereviewed each month. Exceptions are

defined and explained.

24. Insurance and bonding programs arereviewed and updated annually.

25. Audit report is received and reviewed in detail.

Member Relations

26. Standing committee responsibilities arerotated among all directors

27. Membership applications arereviewed, approved, and correctly filed.

28. Member orientation sessions are conducted.

29. Content of membership meetings has good balance between past and future

operations and performance.

30. Discussion and participation are encouraged at membership meetings.

31. A nominating committee seeks new director candidates.

32. The boardrepresents the membership—districts/regions are accurately drawn.

33. Policies for electing delegates and directors are followed.

12

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)
34. A system is in place so that members can express needs and have them discussed by the board.

35. An aggressive member relations and education program is approved and budgeted.

36. A membership newsletter is regularly published.

37. Membership surveys are conducted as needed.

38. Each member has a copy of the bylaws, including current revisions.

39. Each member receives an annual financial report.

Director Development

40. Available director training programs arereviewed.

41. Each director completes a self-assessment and identifies training needs.

42. An annual plan for director training is established and budgeted.

43. Every director participates in at least one annual training program.

44. All new directors participate in an annual orientation program.

General Manager

45. The board approves a written job description for the general manager detailing

goals, objectives, expected duties, and performance elements.

46. Each year the board evaluates the performance of the manager in a formal session based on the identified performance elements.

47. The manager's compensation package is reviewed and approved annually.

48. A training plan for professional improvement of the staff is developed by the

manager and approved by the board.

Public Relations

49. Lines of communication and coordination are established with other cooperatives.

50. Contacts with community and governmental agencies, businesses, and associations are maintained.

51. The board is aware of economic and legislative activities of local, State, and

Federal Governments.

52. The board actively works to promote a positive image of the cooperative and the

community.

13

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)
Exercise 2, Part II—Director’s Individual Board Assessment Summary

Review rating sheets of Part I and identify the following (identify by item number):

Items (by number) receiving a Y rating:________________________________________________________

Items receiving a U rating:__________________________________________________________________

Items receiving an N rating: ________________________________________________________________

Ideas on how to improve items rated with an N :

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

Ideas on how to improve items rated with a U :

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

Additional comments (items felt to be missing, etc.)

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

____________________________________________________________________________________________________

Use more sheets if necessary

14
Exercise 2, Part III—Overall Board Assessment Summary

Completed by a committee or outside party. Review each director’s assessment forms (Parts I and II) and tally Y,

U, and N ratings for each item. Then prioritize items by the number of Ys, Us, and Ns they receive. Some intuition will be needed as some items may get a conflicting distribution of the three ratings.

— — — — — — — — —— — —— — — — — — — —— — — — — — — —— — —————————————————————

Number of Ys Number of Us Number of Ns

Policies and Planning

Item1

Item2

Item3

Item4

Item5

Item6

Board and Coop. Operations

Item7

Item8

Item9

Item10

Item 11

Item12

Item13

Item14

Item15

Item16

Item17

Item18

Item19

Finance

Item20

Item21

Item22

Item23

Item24

Item25

Member Relations

Item25

Item26

Item27

Item28

15
Number of Ys Number of Us Number of Ns

Item29

Item30

Item31

Item32

Item33

Item34

Item35

Item36

Item37

Item38

Item39

Director Development

Item40

Item41

Item42

Item43

Item44

General Manager

Item45

Item46

Item47

Item48

Public Relations

Item49

Item50

Item51

Item52

W ith the table completed, analyze and summarize the ratings and complete the following:

Items (by number) receiving the most N ratings:__________________________________________________________

Items receiving the most U

ratings:______________________________________________________________________

Other items (missing above) receiving a mix of Y, U , and N ratings that should be considered:

16
W rite the description of items that are of greatest concern:

Item (# and description)_______________________________________________________________________________

Item ________________________________________________________________________________________________

Item ________________________________________________________________________________________________

Item ________________________________________________________________________________________________

Item ________________________________________________________________________________________________

Item ________________________________________________________________________________________________

Item ________________________________________________________________________________________________

Item ________________________________________________________________________________________________

Review and summarize directors’ written comments and ideas on how to improve identified areas.

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Use more sheets if necessary

17
Exercise 3—Board Meeting Productivity Assessment

This exercise has three parts. Each director completes Part I and Part II. An assessment results committee or outside party completes Part III. Once all three parts are completed, the board discusses the results and develops a

plan for improved meeting performance.

Exercise 3, Part I—Rating Meeting Attributes

Rate every item below using the following system:

Y— Yes, no improvement needed.

U —Uncertain, could be better.

N —No, improvement is a must.

1. The meeting agenda and required review materials (management reports, committee reports, financial reports, other materials, etc.) are sent to directors prior to

the meeting to provide ample time for review (e.g., 7 days ahead of time).

2. Major topics, items for discussion, and timing of such issues are organized and

identified on the agenda.

3. Meeting conditions are adequate (comfortable seating and room temperature and

adequate lighting so all directors can make eye contact with each other).

4. All directors are prepared for the meeting (they review the required prepared

materials ahead of time).

5. The chairman opens and adjourns the meeting promptly at the scheduled times.

6. The chairman keeps the meeting moving according to the agenda and in accordance with correct parliamentary procedure given cooperative policies.

7. Agenda changes are discussed and approved by the board.

8. Enough time is allowed for discussion and action of each agenda item.

9. The chairman guides the discussion, encourages comment from all directors, and

keeps the discussion focused on the topic.

10. Just before adjournment, a summary of the business conducted is reviewed.

11. Clear and concise board meeting minutes of each meeting are prepared, presented, and accepted or modified according to board policy.

12. Cooperative employees and staffare occasionally invited by the general manager to provide technical support.

13. Committees report to the board at appropriate times.

14. Chairman allows for questions from committee members.

18

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

Circle One
15. The board has an "open door" policy for regular meetings. Any member may

attend (except when the board is in executive session).

16. Attendance is taken at meetings (every director should attend at least 90 percent

of scheduled board meetings).

17. Chairman is informed in advance when directors plan to be absent from a regularly scheduled meeting.

18. Each director participates and contributes to discussions during board meetings;

a minority of directors does not control most discussion.

19. Directors are courteous toward each other, management, and guests.

20. During long meetings, breaks are used to avoid disruptions in procedure.

21. Time is scheduled for a board executive session, if required.

19

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)

(Y) (U) (N)
Exercise 3, Part II—Director’s Individual Meeting Assessment Summary

Summarize ratings by completing the following:

tems (by number) receiving a Y rating:____________________________________________________________________

Items receiving a U rating:______________________________________________________________________________

Items receiving an N rating: ____________________________________________________________________________

List the items (by number) you feel are of the greatest concern and provide some ideas/strategies for how to

improve them:

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Use more sheets if necessary

20
Exercise 3, Part III—Overall Meeting Assessment Summary

Go through each director’s assessment forms (Parts I and II) and tally the Y, U, and N ratings for each item.

Prioritize items by the number of Ys, Us, and Ns they receive. Some intuition will be needed as some items may

get a conflicting distribution of the three ratings.

Number of Ys Number of Us Number of Ns

Item1

Item2

Item3

Item4

Item5

Item6

Item7

Item8

Item9

Item10

Item 11

Item12

Item13

Item14

Item15

Item16

Item17

Item18

Item19

Item20

Item21

Item22

W ith the completed table, analyze and summarize the ratings and complete the following:

Items (by number) receiving the most N ratings:__________________________________________________________

Items receiving the most U ratings:______________________________________________________________________

Other items (missing above) receiving a mix of Y, U , and N ratings that should be considered:

_____________________________________________________________________________________________________

Discuss summary of ratings and identify the items of greatest concern:

Item (no. and name)__________________________________________________________________________________

Item (no. and name)__________________________________________________________________________________

Item (no. and name)__________________________________________________________________________________

Item (no. and name)__________________________________________________________________________________

Item (no. and name)__________________________________________________________________________________

Item (no. and name)__________________________________________________________________________________

21
Item (no. and name)__________________________________________________________________________________

Item (no. and name)__________________________________________________________________________________

Review directors written comments and summarize their thoughts on how to improve identified areas.

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Item No.__ Improve by————————————————————————————————————————

———————————————————————————————————————————————————

———————————————————————————————————————————————————

Use more sheets if necessary

22
A Director’s Pledge

I pledge to do my best for the cooperative that has elected me to serve in a position of honor and trust. (Source:

Lintner and Ingraham)

I will:

● Be honest and diligent.

● Place the interests of the cooperative above my own personal interests.

● Give as careful attention to the affairs of the cooperative as I give to my own business/job.

● Give the necessary time to board meetings and other deliberations.

● Study the business and problems of the cooperative, and the broader issues that affect its welfare.

● Strive for continued and increased efficiency in all areas of the cooperative’s operations and governance.

● Be prompt and attentive at all meetings of the directors so that there is no loss of valuable time.

● Be an independent and careful thinker, expressing my honest opinions, and not be merely a rubber stamp.

● Be open-minded and a team player and recognize that the individual views of board members do not

always prevail.

● Remember that the majority rules and the minority must fall in line once decisions are made.

● Present the views of the board of directors to fellow members, rather than my own, whenever I speak for

the cooperative.

● Strive to keep the organization a member’s cooperative and not let it become a director’s or manager’s

cooperative.

● Represent my constituents in their entirety and not just the members from my community.

● Do all in my power to have the association controlled democratically, including the election of directors.

● W elcome new ideas or “new blood” as a means of keeping a fresh approach to cooperative operations and

service to patrons at a high level.

● Do everything possible to inform members and patrons of established policies and programs of the association.

● Do everything possible to improve my abilities in my director’srole.

23
References

Barrett, Joe. “Effective Board of Director Evaluation,”

American Cooperation 1990, pp. 109-114, American

Institute of Cooperation, Washington, DC, 1990.

Chapman, Harold E. The Contemporary Director: A

Handbook for Elected Officials of Co-operatives, Credit

Unions, and Other Organizations, Saskatchewan Cooperative College of Canada, 1986.

Cobia, David W. Cooperatives in Agriculture,Prentiss

Hall, Englewood Cliffs, NJ, 1989.

Cook, Michael L. “Cooperative Education Myths,”

American Cooperation 1991, pp. 28-32, National

Council of Farmer Cooperatives, Washington, DC,

1991.

Conger, Jay A., David Finegold, and Edward E. Lawler

III. “Appraising Boardroom Performance,”

Harvard Business Review, pp. 137-148, JanuaryFebruary 1998.

Conrad, William R. Jr. and William E. Glenn. The

Effective Voluntary Board of Directors: What It Is and

How It Works, Swallow Press, Ohio, 1983.

Frederick, Donald A. Co-ops 101: An Introduction to

Cooperatives, Cooperative Information Report 55,

RBS, USDA, Washington, DC, April 1997.

Lintner, Dr. J.H. and Dr. Charles H. Ingraham. “Should

I Serve as a Director or Officer of a Cooperative?”

Unit IV, Cooperation in a Free Enterprise Society

W ith Emphasis on the Cooperative Way of Doing

Business Series, Ohio Agricultural Education

Curriculum Materials Service, Columbus, Ohio,

1973.

Louden, J. Keith. The Effective Director in Action, AMACOM, New York, 1975.

Roy, Ewell Paul, Ph.D. Cooperatives: Development,

Principles and Management, Third Edition,

Interstate Printers and Publishers, Inc., 1976.

Turner, Mike. “Evaluating Local Board Performance,”

American Cooperation 1990, pp. 91-100, American

Institute of Cooperation, Washington, DC, 1990.

U.S. Department of Agriculture. Positioning Farmer

Cooperatives For the Future, A Report to Congress,

Agricultural Cooperative Service, Washington,

DC, October, 1987.

24
U.S. Department of Agriculture

Rural Business–Cooperative Service

Stop 3250

Washington, D.C. 20250-3250

Rural Business–Cooperative Service (RBS) provides research,

management, and educational assistance to cooperatives to

strengthen the economic position of farmers and other rural

residents. It works directly with cooperative leaders and

Federal and State agencies to improve organization,

leadership, and operation of cooperatives and to give guidance

to further development.

The cooperative segment of RBS (1) helps farmers and other

rural residents develop cooperatives to obtain supplies and

services at lower cost and to get better prices for products they

sell; (2) advises rural residents on developing existing

resources through cooperative action to enhance rural living;

(3) helps cooperatives improve services and operating

efficiency; (4) informs members, directors, employees, and the

public on how cooperatives work and benefit their members

and their communities; and (5) encourages international

cooperative programs. RBS also publishes research and

educational materials and issues Rural Cooperatives magazine.

The U.S. Department of Agriculture (USDA) prohibits

discrimination in all its programs and activities on the basis of

race, color, national origin, gender, religion, age, disability,

political beliefs, sexual orientation, and marital or family

status. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for

communication of program information (braille, large print,

audiotape, etc.) should contact USDA’s TARGET Center at

(202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director,

Office of Civil Rights, Room 326-W, Whitten Building, 14th and

Independence Avenue, SW, Washington, D.C. 20250-9410 or

call (202) 720-5964 (voice or TDD). USDA is an equal

opportunity provider and employer.