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clayton58
Veteran Advisor

board members responsibility to coop

the issue has come up aboutwhat is the duty of board members to do business with their coop.  Should all business be done with coop regardless of price?  are there times when it is OK to shopp elsewhere?  You guys that have your own bins, do you still market through the coop, or go direct to the enduserWhat are your thoughts, opinions, and practices?  TIA

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10 Replies

Re: board members responsibility to coop

If you are a board member, if your coop is not competitive,you need to find out why. It does not do you any good to do business else where as it is an image problem indicating you have no faith and trust in the business. If you cannot live with that, you need to step down
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Taylor ECIL
Senior Contributor

Re: board members responsibility to coop

If they are not willing to support the co-op why are they on the board?

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Re: board members responsibility to coop

If the board member has to use the co-op, then I suppose it is OK for the board member to believe that the co-op owes him the best deal?  In other words, pretty soon instead of him serving the co-op, the co-op serves the board member?  Uh, have I seen that anywhere before?

 

If the co-op can't provide a competitive price, maybe it should drop that enterprise.  Is it keeping it as a convenience to a few?

 

The total vblue of the servbice is not always in the price.  Sometimes features like delivery, bulk sales, and so forth may add value that are not all reflected by the cheapest price.

 

So, there are many ways to value the products the co-op offers.  I hope it offers them equally to all members.  I hoped board members don't get the idea that if something is good for them, it is necessarily best for the co-op as a whole.

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kraft-t
Senior Advisor

Re: board members responsibility to coop

The board members primary responsibility is to the members that elected him. One would think that mandate would require serving the members interest of which is building and preserving a healthy vital business to serve their interests. A commited business to serve the needs of their member owners.

 

As a previous board member I can tell you that some board members and employees view the coop as their own little piggy bank where all decisions are based on what is best for them. Viewing members as chickens to be plucked. Instead of focusing on potential savings as a path toward prosperity, they look to increased margins extracted from members as the path to profitability.

 

The coops obligation is to be competitive and provide the best value for their owner members. We don't need to pay help hundreds of thousands to rape ourselves. Your responsibility is to earn your paycheck by seeking and finding opportunities both in purchases and sales that offer value to owner members. Can't do it, then you are the wrong people for the job.

 

Having a noncompetitive coop as your asset s like having a cresent wrench that is frozen in one position. It may be of some benefit if nothing else to use as a hammer, but it is a rusty tool with little benefit to you. That is why management must recognize the need to be more than that.

 

Loyalty is a two way street and those that demand loyalty are those that cannot manage competitively. In other words they rely on your loyalty for their success but are unable to earn that loyalty.

 

Thus the best option for me was not to run again for the position as my participation was a fruitless exercise. I still do 90% of our business with the firm.

Re: board members responsibility to coop

You make very good points, Kraft.

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clayton58
Veteran Advisor

Re: board members responsibility to coop

The specific issue was selling grain directly to an end user (ethanol plant) instead of to the coop which then sells to the plant.  I understand loyalty, but how much profit is a board member expected to sacrifice for the "cause"?

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Taylor ECIL
Senior Contributor

Re: board members responsibility to coop

I would leave as board member if I felt that I would take my business elsewhere to make more money. If I am on the board I will support the business. How can I expect friends and neighbors to patronize the co-op if I a board member will not patronize it. I am not on a boost my ego, I am on a board because I think I can help.

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k-289
Esteemed Advisor

Re: board members responsibility to coop

Interesting reply's which high light the word responsibility  --- some I would recomend for the board while other's just posture for the $$$ --- 

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Nebrfarmr
Veteran Advisor

Re: board members responsibility to coop

As a board member, could you approach the plant, as well as the management, and work on a deal where they can sell to the co-op, but deliver to the plant directly? They do that around here, where you contract for delivery to the ethanol plant, but through the co-op. Last year I gave up two cents a bushel doing it that way, compared to not going through the co-op, but got close to 3 cents a bushel patronage dividends. I believe the co-op gets a little commission arranging the sale, the plant gets the corn, and the coop member still goes through the coop.
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