At least two-thirds of a cooperative's directors must be either members of the cooperative or representatives of members that are cooperatives, business corporations or other entities. One-third of the directors may be outside directors. If the cooperative issues investment shares, members may decide to authorize investment shareholders to elect no more than 20 per cent of the directors. The bill permits members to limit the powers of the board of directors, either through their right of control over the articles of incorporation or through a unanimous agreement. Thus, members maintain control over both the board of directors and the cooperative itself.
Directors are subject to a statutory duty of care and fiduciary duty.
The bill modernizes, clarifies and limits these duties.