By defining and monitoring the limits, the board is reasonably assured that they will approve of all activities within the boundaries without restraining management's creativity and ability to manage. The most successful cooperatives have both strong boards and strong management. As a precursor to this the board should define the relationship it wants with management through policy. Policies in this category define how the board passes its power and responsibility to management, what is expected of management and how management will be compensated and evaluated. Generally, the board wants management to achieve the ends it has defined without violating any of its stated limits on means.
Clear expectations make it possible to evaluate effectively.
Explicit policies make the board's job easier. The board's three primary job products are linkage with owners, developing policies in the four categories and assuring performance. The board obtains its legal and fiduciary authority and responsibility from the cooperative's member owners. It is the board's responsibility to develop and maintain organizational connection with the owners, and this linkage requires two-way communication. The board must understand and act upon the needs of the members and report the condition of the business to them.