How 

financially 

strong is our 

co-op?

Is the co-op too

 highly leveraged?

Do our

bylaws 

need

revisions?

How do 

we recruit 

skilled 

directors?

Rural Development / RBS Cooperative Information Report 62

Cooperative Directors

 Asking Necessary Questions
Abstract

This report provides questions

Cooperative Directors: Asking Necessary Questions

James J. Wadsworth

USDA Agricultural Economist

Rural Business-Cooperative Service

Cooperative Programs

U.S. Department of Agriculture

1400 Independence Ave., SW, STOP 3254

Washington, D.C. 20250-3254

https://www.rd.usda.gov/programs-services/all-programs/cooperative-programs

Cooperative Information Report 62

Revised February 2018. This guide was first published in August 2003.

2 ASKING NECESSARY QUESTIONS
Preface

 Cooperative directors,

ASKING NECESSARY QUESTIONS 3
4 ASKING NECESSARY QUESTIONS

Contents

Abstract .....................................................................................................................2

Preface ......................................................................................................................3

Introduction ..............................................................................................................6

1. Character and Principles ...................................................................................8

2. Governance Structure.......................................................................................10

3. Policy and Legal Aspects.................................................................................11

Existing Policy ...............................................................................................11

New Policy ....................................................................................................12

Public Policy ..................................................................................................12

Sensitive Policy Questions .........................................................................13

Legal Aspects ...............................................................................................14

4. Member Relations and Education ..................................................................15

Director Assessment ...................................................................................16

5. Management.......................................................................................................17

Operations .....................................................................................................17

Hiring a Manager .........................................................................................18

Manager Appraisal ......................................................................................18

6. Financial Management.....................................................................................19

Equity Management .....................................................................................20

7. Auditing ...............................................................................................................21

Auditor/Audit Firm ........................................................................................22

Hiring an Auditor ..........................................................................................22
ASKING NECESSARY QUESTIONS 5

8. Consultants .........................................................................................................23

9. Strategic Planning.............................................................................................24

General ...........................................................................................................24

Mission/Vision Statements .........................................................................24

Assessing the Environment ........................................................................25

External ..........................................................................................................25

Internal ...........................................................................................................25

Goals ...............................................................................................................27

Strategies ......................................................................................................27

New Strategic Direction .............................................................................28

Feedback .......................................................................................................29

10. Major Strategic-Thinking Issues .................................................................29

Conclusion ..............................................................................................................30

Cooperative Publication References .................................................................31

Endnote: The International Co-operative Alliance (ICA) Principles ............33

Do members understand their unique responsibilities 

as user-owners of the cooperative?
6 ASKING NECESSARY QUESTIONS

Cooperative Directors

 Asking Necessary Questions

James J. Wadsworth

Program Leader

Education and Member Relations

Rural Business-Cooperative Service

U.S. Department of Agriculture

Introduction

Cooperative directors must prepare
ASKING NECESSARY QUESTIONS 7

should be directed to should be evident; in some cases, they will be directed 

to more than one target audience (e.g., to themselves, management, other 

directors, employees, etc.).

 Questions listed under each category are not intended to be exhaustive. 

Various other questions may need to be asked, depending upon the cooperative and issues involved. A report by Anderson and Henehan lists some 

questions directors should be asking of management in a number of different areas and also gives some insight into how and when to inquire.1 This 

report adds to that body of questions by taking a broader approach, in some 

instances. Questions may be aimed at a number of cooperative players but 

most often are meant for directors themselves.

 Cooperative research and information reports developed by USDA Rural 

Development2 are listed as references in the back of this report to provide 

directors with sources of further information for particular areas of responsibility. Directors may wish to seek other resources as well. Various articles 

from USDA’s Rural Cooperatives magazine are often applicable to the questions asked in this report and can be researched.3

 Numerous research reports, information publications, and educational 

articles are available from various other sources, including cooperatives, universities, cooperative centers, State cooperative councils, national and local 

cooperative organizations and trade associations.

1

 The report by Anderson and Henehan (Cornell University professor and extension specialist, 

respectively), describes how directors should pose questions to management, provides an extensive list of questions, outlines a generic format for asking general questions, and assists in 

identifying important board issues and how to handle them. It can be found here: http://publications. dyson.cornell.edu/research/researchpdf/sp/2002/Cornell_Dyson_sp0201.pdf 2

 Reports from USDA Rural Development can be found online at: https://www.rd.usda.gov/ 3

 Issues of Rural Cooperatives magazine can be found online at: https://www.rd.usda.gov/
8 ASKING NECESSARY QUESTIONS

 1. Character and Principles

Cooperative principles are operational
ASKING NECESSARY QUESTIONS 9

• Will any contemplated changes to operations or structure threaten our 

adherence to the principles?

• Are we effectively communicating to members and the public that our 

governing cooperative principles and practices make us unique?

• Do members have an accurate understanding of the cooperative’s benefit?

• Do members understand their unique responsibilities as user-owners of 

the cooperative?

• Are we advising members about their responsibilities and issues that affect 

the cooperative?

• Are we communicating our cooperative image and character to our membership and the general public?

• Where is the cooperative positioned between strict adherence to, and 

non-compliance with, cooperative principles? Is it acting and operating 

like a true cooperative? If not, where is it failing?

 Answers to these questions do not end the inquiry. If cooperative 

character and principles appear intact, directors must ask how the business 

will grow and adapt to changing conditions. If challenged or infringed upon, 

directors must ask hard questions about what that means and what can be 

done to avoid anything that could be detrimental to the owners. 

Are we effectively communicating to the members and 

public about our cooperative?
10 ASKING NECESSARY QUESTIONS

 2. Governance 

As cooperatives grow and change
ASKING NECESSARY QUESTIONS 11

3. Policy and Legal Aspects

The primary responsibility of directors

• Should we consider adding a non-producer member to our board to gain 

greater expertise in a complex subject area such as finance or law? If so, 

should this be an ex-officio (e.g., non-voting) or a voting member? 

• Is our cooperative active in State and/or national cooperative 

organizations, such as our State or regional co-op council, the National 

Council of Farmer Cooperatives, National Cooperative Business 

Association, etc.?
12 ASKING NECESSARY QUESTIONS

• Are there too many policies? Are any policies redundant?

• Do all the policies work in concert with each other? If not, which ones 

need to be modified/changed/removed?

• Do members know and understand the cooperative’s policies?

New Policy

• What exactly do we want the policy to do or not do?

• What action words will make the policy more explicit?

• Should the policy be indefinite or have a time limit?

• Will the policy fit with current operations and the strategic plan (i.e., 

mission, goals, and strategies)?

• Will the policy be redundant or conflict with other policies?

• Will the membership agree with the policy? Does it represent their 

interests?

• Do we have all the information we need to assess a new policy?

Public Policy

 Cooperatives should develop a written set of policy resolutions and 

institute a regular procedure for revising them. The policy program should 

include a plan to implement the resolutions through personal contacts with 

policymakers and coordinated efforts with other cooperatives and interest 

groups through coalitions and trade associations. Here are some areas for 

directors to consider:

• What types of policy resolutions are needed to most accurately reflect our 

cooperative’s interests?

• Does our membership agree with the policy resolutions we are devising? 

Are they in the membership’s best interests?

• Are members providing policy resolution suggestions? 

• How often are we reviewing/changing our resolutions? Is it often enough?

• What types and amounts of cooperative resources are available to devote 

to public policy? How active can the cooperative be?

• Are members on our resolution committee and is it effective?

• What other cooperatives or cooperative associations can we work with on 

developing policy?
ASKING NECESSARY QUESTIONS 13

• Are we making the right contacts at local, State, and national levels? Are 

we being heard?

• Are we supporting the organizations that carry out public policy on our 

behalf?

• Are we using the resources that our public policy efforts seek to augment?

Sensitive Policy Questions

 One sensitive area has to do with how much a cooperative should become 

involved in political matters. If a cooperative board wants to become active, 

questions arise that may help determine how involved to become or if any 

involvement is desired. This is a sticky area. Cooperative members, like the 

general public, often have a wide range of opinions on political matters. 

Issues may become especially sensitive when it comes to political party 

differences and ideology. Here are questions to consider:

• Should our cooperative be involved in political matters? If so, to what 

degree?

• Should our cooperative actively engage in the political process beyond 

specific issue declarations? 

• How open and wide should that activity be? How will diverse member 

interests be protected?

• What activities should be restricted or limited, and how?

• If our board decides to take a side on an issue, should members be polled?

Should our 

cooperative be 

involved in political 

matters? If so, to 

what degree?
14 ASKING NECESSARY QUESTIONS

Legal Aspects

 Directors should understand and periodically review their cooperative’s 

legal documents and implement change where and when needed. Legal 

counsel should be hired for advice and to help draft needed changes. Still, 

directors need to understand what the documents contain and be versed in 

various areas to effectively make policy decisions. They must ensure that 

the cooperative is legally structured and that legal procedures are followed. 

Some questions to consider:

• Does our cooperative have all needed legal documentation in place?

• Do our articles of incorporation accurately spell out all needed provisions 

(e.g., heading, name, principal place(s) of business, purpose, powers, 

duration, directors, capital structure, amendment, signatures, etc.)?

• Do the bylaws accurately describe membership, meetings of members, 

directors and officers, directors’ duties, officer duties, equity capital 

and redemption, consent, nonmember business, nonpatronage income, 

handling losses, dissolution, indemnification, and amendment, etc.?

• Does our cooperative’s marketing agreement contain necessary clauses and 

outline its functions? Does it need review and amendment?

• Do we have a director’s handbook? Does it contain all the necessary 

information directors need to fully understand the cooperative’s legal 

structure and legal parameters?

• Do we understand what directors’ liabilities are for the cooperative? 

• Do we have a legal compliance program in place to monitor danger areas 

of antitrust, taxation, environmental laws, discrimination practices, and 

work safety?

• Does our cooperative need a legal audit to measure exposure to legal 

issues/concerns?

• Have we studied new cooperative laws and legal regulations that may be 

applicable to our cooperative?

 Directors need to explain, review, critically assess, and amend cooperative 

policies and legal documents periodically so they clearly understand what 

those documents contain. 
ASKING NECESSARY QUESTIONS 15

4. Member Relations and Education

 Directors need to periodically review
16 ASKING NECESSARY QUESTIONS

• Are directors committed to education and self-improvement?

• What educational programs are most cost effective and worthwhile?

• If our cooperative has a young cooperator’s program, how well does it 

work?

Director Assessment

 Cooperative directors must assess the effectiveness of their ability and 

performance as a board to improve areas where needed. Assessment should 

include the individual director, the board as a whole, and board meeting 

productivity. The objective is to help directors assess their abilities so that 

corrective actions can be taken if needed to improve their performance. 

Major questions include:

• Do my director skills need improvement?

• What areas need most improvement?

• Would further training improve my ability as a director?

• Do we understand our weaknesses and strengths as a board of directors? 

• Do we work together effectively and efficiently?

• Do we need further training to do a better job as a board?

• Do we complete our board work within the allotted time?

• Are our meetings effective? Is time spent efficiently?

• Could we improve our meetings? In what ways?

• Do we need an outsider to more accurately assess our performance and 

education needs?

 Directors should carry out assessments from time to time. For a guide 

that takes directors through exercises of self-assessment, working together 

as a board, and effectiveness of board meetings, see the USDA reference 

publication: Cooperative Information Report 58, “Assessing Performance 

and Needs of Cooperative Boards of Directors.”
ASKING NECESSARY QUESTIONS 17

5. Management

In board meetings, management must be asked questions
18 ASKING NECESSARY QUESTIONS

Hiring a Manager

 In hiring a manager, the board needs answers to a number of questions 

that will reflect how well the prospective applicant will fit with the 

cooperative. The objective is to gain enough information that will help in 

selecting a new manager. Here are some questions to consider:

• What is the applicant’s educational background? 

• What is the applicant’s cooperative experience, such as: has he/she 

worked for a cooperative before? How well versed is the applicant in a 

cooperative’s governing principles and business practices?

• Has the applicant shown leadership ability in previous endeavors (work 

and private life)?

• Is the applicant flexible and open-minded?

• Does the applicant clearly understand the role and responsibilities of a 

manager in a cooperative and the importance of respect in the relationship 

between the board and the manager?

• Is the applicant a good communicator who can connect with the memberowners?

• What is the applicant’s pre-cooperative related experience? How will that 

experience help or hurt the cooperative?

• Do we have a detailed position description for the general manager?

• How well has the board chosen managers in the past? Are there lessons 

learned that could help the process and choice this time?

Manager Appraisal

 One area where many cooperative boards struggle is in appraising the 

general manager. Directors must use some type of appraisal to objectively 

assess how well the manager is operating the cooperative. The objective is 

to routinely conduct a fair and forthright management appraisal. Here are 

some questions directors need to ask:

• Are we adequately appraising the general manager? Do we follow a sound 

procedure?

• Does the manager appraisal depend on and relate to the cooperative’s 

goals and strategy? Do we objectively measure the manager’s performance 

against some clear and distinct standards or benchmarks?
ASKING NECESSARY QUESTIONS 19

6. Financial Management

Financial management and capital issues

• Does the manager understand and adhere to his/her responsibilities as 

distinct and separate from the boards?

• Is the manager a good leader and have human relations skills?

• Has the manager made good employee hiring choices?

• Is the management team cohesive? Is the manager leading them 

adequately?

• How well does the manager track the cooperative’s industry? Does he/she 

know the industry well?

• Does the manager finish projects in an efficient and timely manner?

• Does the manager communicate well to the board and members?

• Does the manager adhere to cooperative policies?
20 ASKING NECESSARY QUESTIONS

• Do we have enough capital or access to capital to grow?

• What options do we have for obtaining necessary capital?

• What is our relationship with our credit provider(s)?

• Has our net worth been increasing?

• Are there State and/or Federal financial programs that might fit and 

benefit the cooperative? If so, do we need to consider them?

• How well do we analyze investment decisions? Has our analysis been 

accurate?

• Are we making financial progress?

• How well does our financial management coincide with strategic plans?

 Understanding a cooperative’s financial circumstances, condition, 

and future needs has become one of the greatest challenges confronting 

cooperative directors. Given the dynamic agricultural environment and 

vast structural changes taking place in cooperatives and agribusiness, 

understanding a cooperative’s financial position and capacity for new 

initiatives, opportunities, or change is critically important. Director 

education in general and advanced cooperative finance is a must. 

Equity Management

• Are members satisfied with the cooperative’s equity program?

• Do members prefer the present way the cooperative accumulates and/or 

categorizes (i.e., between unallocated, allocated, retained earnings, etc.) 

equity, or might a different system be more beneficial?

How well does 

our financial 

management 

coincide with 

strategic plans?
ASKING NECESSARY QUESTIONS 21

7. Auditing

An extremely important function of a board of directors

• Are we redeeming equity effectively and consistent with our bylaws?

• Are members adequately financing the cooperative?

• Is the financing coming from active and current members?

• Is the cooperative’s equity-to-assets ratio in a good range?

• Is our cooperative obtaining enough member equity for sufficient financial 

strength and future growth opportunities? 

• How well is our equity revolvement/retirement system working?

• How can our equity management be improved?

• How well are we communicating with members about our equity 

management situation?

 Managing a cooperative’s equity is a critically important aspect 

of effective control and a duty that directors must take seriously and 

studiously. Dependent on the cooperative’s distinct equity accumulation 

and redemption scheme, various questions will arise that directors must 

consider. Significant knowledge about cooperative equity management is 

necessary.
22 ASKING NECESSARY QUESTIONS

Auditor/Audit Firm

• Were correct procedures followed in conducting the audit? Explain?

• Did management cooperate fully? Could dealings with management have 

been improved?

• Did you encounter any problems with the way the cooperative handles its 

financial reporting and accounting procedures?

• What were the audit’s general findings? 

• Were there any new specific findings?

• What was significantly different from the previous year’s audit?

• What should most concern us?

• What financial areas should we concentrate on improving?

• What should we know that doesn’t appear in the report?

• What doesn’t the audit report contain that our financial records show and 

we should know about? 

• Did you create enough notes to accurately describe financial conditions to 

members?

• Are the interest rates on our loans in line with market rates or other businesses?

• Should we seek any accounting policy changes?

Hiring an Auditor

Directors need to ask questions to ensure that the best auditor is hired, given 

the cooperative’s unique structure and operations. 

• Has the auditor worked with cooperatives before?

• Does the auditor have other cooperative clients?

• Does the auditor have sufficient knowledge of cooperative accounting and 

finances?

• Is the auditor current with cooperative accounting practices and law?

• Does the auditor have any personal ties to the membership, the board, or 

operations of the cooperative?

• Does the auditor have a personal relationship with the manager or any 

other cooperative employees?

• Does the auditor have professional references that can be checked?

• After checking, are the references positive?

• Are the auditor’s charges reasonable and competitive with those of other 

area auditors with similar credentials?
ASKING NECESSARY QUESTIONS 23

8. Consultants

Cooperatives often hire consultants to study issues
24 ASKING NECESSARY QUESTIONS

 9. Strategic

 If the cooperative carries out strategic planning sessions,
ASKING NECESSARY QUESTIONS 25

the mission statement provides a concise and clearly written description of 

what the cooperative is and what it does. Does the vision statement indicate 

where the cooperative is heading and what it wants to be? These questions 

should be answered to ensure that the mission and vision statements are well 

written and defined:

• Who are the cooperative’s patrons/members?

• What does the cooperative do?

• How does the cooperative do what it does?

• What is the cooperative’s major business?

• What should it be?

• How is the cooperative unique?

• What is its primary emphasis?

• What values define the cooperative?

• What is the cooperative not?

• What does the cooperative strive to be?

• What will the cooperative be in the future?

Assessing the Environment

 For assessing the environment, directors need to answer questions on an 

external and internal basis.

External

• What forces (e.g., market, governmental, environmental, global, etc.) are 

helping or hurting the cooperative?

• What trends will have the greatest potential impact on the cooperative?

• How will these forces affect the cooperative in the future?

• What is the cooperative’s territory?

• Who is the competition and how will that likely change?

• How does competition affect cooperative operations? How might it 

impact our co-op in the future? 

• What are the cooperative’s short- and long-term opportunities and threats? 

• How adaptable is the cooperative to changing market conditions?

• What market conditions are most likely to change and which are likely to 

stay the same?

• Is the cooperative operating in a mature or an emerging agricultural 

environment? 
26 ASKING NECESSARY QUESTIONS

• How is the cooperative positioned in its industry/environment? Is it 

progressing, declining, or in a status quo state?

• What are the implications of its position for future operations and 

viability?

Internal

• What are the co-op’s marketing/sales/service methods?

• Are they working well? What needs to be improved?

• What is the cooperative’s membership situation? Are we gaining or losing 

members? Are member demographics changing (for age, gender, farm/

operation size, etc.)?

• What business units or operational areas are working well/not well?

• What services are needed or should be changed? What new services are 

needed? 

• What are the cooperative’s internal strengths and weaknesses?

• Is the internal structure efficient? If it could be improved, how?

• How does the cooperative’s internal structure correspond with its external 

environment?

• Is the business correctly structured for the services it provides and will be 

providing in the future?

Is the business correctly structured for the services it 

provides and will be providing in the future?
ASKING NECESSARY QUESTIONS 27

Goals

• What are the cooperative’s goals? Can they be clearly described?

• Are they well defined and detailed?

• Are they realistic?

• Are they being achieved?

• Are they accurately oriented for a short- or long-term context?

• Are they in line with the resource (e.g., financial, human, service) 

limitations of our cooperative?

• Are they in line with the cooperative’s mission and vision?

• Does the cooperative have the correct resource (human and financial) 

mix to achieve all of them? If not, which goals should be kept and which 

eliminated?

• What goals have been met, and which ones need to be updated or 

modified?

• Are the goals ambitious enough, but not too ambitious given the 

environmental assessment?

• What new goals are needed?

Strategies

• Are strategies consistent with the cooperative’s goals?

• Are they realistic and feasible?

• Have they been well analyzed?

• Do we have the resources to fully implement them without harming 

current operations and our competitive position?

• How risky are they? Does the risk coincide with our risk aversion level?

• Are they specific and measurable?

• Are strategy action plans in place?

• Will they take advantage of our strengths while not exposing our 

weaknesses?

• What strategies are needed given our mission and goals and current 

condition and position in our industry and environment?

• How well are we monitoring the strategies we have in place? Should more 

be done?

• How have we adjusted our strategies and has it improved things?

• Are our strategies consistent with operating on a cooperative basis?

• How and when will the strategies be implemented? 
28 ASKING NECESSARY QUESTIONS

New Strategic Direction

• Is our cooperative structure appropriate for where we intend to go?

• Do we need to consider other directions (i.e., consolidation, joint venture, 

strategic alliance, partnership, etc.)? What direction will allow for the 

highest level of goal attainment?

• Have we been doing a good job in improving our current operations and 

service under our current strategic direction?

• If we pursue a new direction that will create significant change, how will it 

affect our adherence to cooperative principles?

• How receptive will the membership be to a significant change in strategic 

direction? Are we prepared and able to effectively communicate such a change?

• Have other cooperatives pursued the change we are contemplating? How 

has it worked for them?

• How will the change in direction affect how our competition views us and 

reacts to us?

Feedback

• Are we monitoring our strategies and revisiting our goals on a regular basis?

• Are we adjusting our strategic plan if things aren’t going as intended?

• Is management following the strategic plan and adjusting operations 

accordingly?

• Has management fully implemented chosen strategies in a timely manner?

• How well is the plan benefiting members?

• How well have we communicated the plan to members and have we 

received sufficient member feedback?

• What positive/negative implications have arisen from implementation of 

the plan?

• When do we need to have another strategic planning session to update and 

modify our plans?

Cooperative directors need to consider these and other questions for 

effective strategic planning. Many questions arise as directors become 

ingrained and experienced in strategic planning and their cooperative 

makes planned changes. Directors should use various resources to develop 

a strategic planning process that fits well with their cooperative’s internal 

organization and structure.
ASKING NECESSARY QUESTIONS 29

10. Major Strategic-Thinking Issues

As part of the strategic planning process
30 ASKING NECESSARY QUESTIONS

Conclusion

 This report provides numerous questions that directors should consider 

s

 While answers to these big-issue questions are difficult, it is important 
ASKING NECESSARY QUESTIONS 31

Cooperative 

Publication 

References

The USDA cooperative publications listed here
32 ASKING NECESSARY QUESTIONS

Strategic Planning:

CIR 48: Strategic Planning Handbook for Cooperatives

RR 112 Strategic Planning — A Conceptual Model for Small and Midsize Farmer 

Cooperatives

Legal Materials:

CIR 66: Federal Statutes of Special Importance to Farmer Cooperatives

CIR 23: Tax Treatment of Cooperatives

CIR 34: Director Liability in Agricultural Cooperatives

CIR 35: Understanding Capper-Volstead

CIR 40: Sample Legal Documents for Cooperatives

CIR 44: Income Tax Treatment of Cooperatives

Table of Citations 

CIR 44 Part 1: Patronage Refunds

CIR 44 Part 2: Distribution, Retains, Redemptions, and Patrons’ Taxation

CIR 44 Part 3: Internal Revenue Code Section 521

CIR 44 Part 4: Handling of Losses

CIR 59: Antitrust Status of Farmer Cooperatives: The Story of the CapperVolstead Act

Other Reference:

“Questions Cooperative Directors Should Be Asking Management,” Staff 

Paper SP 2002-01, by Bruce Anderson and Brian M. Henehan, Department 

of Applied Economics and Management, Cornell University, Ithaca, NY, 

January 2002. 

http://publications.dyson.cornell.edu/research/researchpdf/sp/2002/Cornell_Dyson_sp0201.pdf
ASKING NECESSARY QUESTIONS 33

Endnote

The InTernaTIonal Co-operaTIve

allIanCe (ICa) prInCIples

1sT prInCIple

Voluntary and Open Membership

Co-operatives are voluntary organizations, open to all persons 

able to use their services and willing to accept the responsibilities 

of membership, without gender, social, racial, political or religious 

discrimination.

2nd prInCIple

Democratic Member Control

Co-operatives are democratic organizations controlled by their 

members, who actively participate in setting their policies and making 

decisions. Men and women serving as elected representatives are 

accountable to the membership. In primary co-operatives members 

have equal voting rights (one member, one vote) and co-operatives at 

other levels are also organized in a democratic manner.

3rd prInCIple

Member Economic Participation

Members contribute equitably to, and democratically control, the 

capital of their co-operative. At least part of that capital is usually 

the common property of the co-operative. Members usually receive 

limited compensation, if any, on capital subscribed as a condition 

of membership. Members allocate surpluses for any or all of the 

following purposes: developing their co-operative, possibly by setting 
34 ASKING NECESSARY QUESTIONS

up reserves, part of which at least would be indivisible; benefiting 

members in proportion to their transactions with the co-operative; 

and supporting other activities approved by the membership.

4Th prInCIple:

Autonomy and Independence

Co-operatives are autonomous, self-help organizations controlled 

by their members. If they enter into agreements with other 

organizations, including governments, or raise capital from external 

sources, they do so on terms that ensure democratic control by their 

members and maintain their co-operative autonomy.

5Th prInCIple:

Education, Training and Information

Co-operatives provide education and training for their members, 

elected representatives, managers, and employees so they can 

contribute effectively to the development of their co-operatives. 

They inform the general public — particularly young people and 

opinion leaders — about the nature and benefits of co-operation.

6Th prInCIple:

Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen 

the co-operative movement by working together through local, 

national, regional and international structures.

7Th prInCIple:

Concern for Community

Co-operatives work for the sustainable development of their 

communities through policies approved by their members.
In accordance with Federal civil rights law and U.S. Department of Agriculture 

(USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and 

employees, and institutions participating in or administering USDA programs are 

prohibited from discriminating based on race, color, national origin, religion, sex, 

gender identity (including gender expression), sexual orientation, disability, age, 

marital status, family/parental status, income derived from a public assistance 

program, political beliefs, or reprisal or retaliation for prior civil rights activity, in 

any program or activity conducted or funded by USDA (not all bases apply to all 

programs). Remedies and complaint filing deadlines vary by program or incident. 

Persons with disabilities who require alternative means of communication 

for program information (e.g., Braille, large print, audiotape, American Sign 

Language, etc.) should contact the responsible Agency or USDA’s TARGET 

Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal 

Relay Service at (800) 877-8339. Additionally, program information may be made 

available in languages other than English. 

To file a program discrimination complaint, complete the USDA Program 

Discrimination Complaint Form, AD-3027, found online at How to File a Program 

Discrimination Complaint and at any USDA office or write a letter addressed to 

USDA and provide in the letter all of the information requested in the form. To 

request a copy of the complaint form, call (866) 632-9992. Submit your completed 

form or letter to USDA by:

mail:

U.S. Department of Agriculture

Office of the Assistant Secretary for Civil Rights

1400 Independence Avenue, SW

Washington, D.C. 20250-9410; 

fax:

(202) 690-7442; or

email:

program.intake@usda.gov. 

USDA is an equal opportunity provider, employer, and lender.
Are we 

making 

progress?

Does our 

strategic plan

need updating? Are the members 

satisfied with our equity 

redemption program?

Rural Development

Rural Business-Cooperative Service

RBS Cooperative Information

Report 62