Sample policies in this publication are intended to offer a smorgasbord of ideas for directors and Executive Director to consider in establishing and setting policies. Not all policies exhibited may be relevant to your organization.

Every board and management team needs to tailor the specific content of each policy to meet the needs of their organization.

A suggested procedure follows:

1. A board committee should research and compile a list of the present policies now being followed. The topic or subject of either written or implied policies should be listed in their order of importance to the organization based on the group's judgment.

2. On an individual basis, each director and member of the management team should review the sample policies in this handbook and the list of current policies now in effect as compiled by the group in step 1.

3. After appropriate study, and usually upon recommendation of the committee, the board should agree on the specific policies needed.

4. The chairperson should appoint a committee from the board and management to prepare a draft policy on each topic accepted earlier by the board.

5. Policy drafts should be presented in a special board meeting. Each director and member of the management team must have the opportunity to make suggestions and recommendations as to policy content.

6. A final draft of each policy should be written and include recommendations as accepted in the special board policy session. This draft should be sent to each individual board member and management staff for their extensive review prior to final approval.

7. A second special board meeting should be held to read and discuss the proposed policies. If major revisions are necessary, the draft should be referred back to the original committee. If major revisions are not necessary, the board may adopt written policy by majority vote.

8. Adopted policy both new or revised must be signed by the board president and secretary, dated, and recorded in the board minutes. For the sake of brevity, the policy may be referenced by title or a numbering system in the minutes and the complete policy attached elsewhere. Revisions should be cross- referenced to the original policy.

9. Each director and management team member shall be given a complete manual of all adopted policies. The extent of distribution of policies to employees, members and other interested parties is at the discretion of the directors and management. An official updated policies manual shall be on file in the corporate offices of the association or maintained by an elected official of the board.

10. Each policy should be reviewed annually by the complete board or a committee appointed by the chairperson for that specific purpose. A majority vote of the board is required to adopt policy additions and revisions.

 

 

Policies give direction to plans. They are a road map management can follow to reach goals and attain objectives. Well written policy facilitates delegation of authority to the lowest feasible level in the cooperative. Written policy statements must be a major ingredient of each cooperative's planning activity. These policies should reflect the cooperative's basic philosophy and serve as guidelines for actions the cooperative takes to attain its established objectives.

Before determining policy, objectives must be defined. Objectives should be clearly stated in writing so that policies can be consistent. A cooperative might declare itself in written a objective to be "a nonprofit, member-owned, and member-controlled enterprise established to provide marketing services and products to improve the economic condition of its members." Policymaking becomes the means for achieving this objective.

It is the duty and responsibility of the board to originate and approve broad and general policy. The directors should approve specific operating policies recommended by management. In a developing cooperative, the directors may have the responsibility to all make policy decisions that affect the well-being of the cooperative. The section, "How to Use Sample Policy Handbook," details policywriting procedure.

Policies can be broad and general or detailed and specific. Broad policies leave room for interpretations and the exercise of judgment and initiative. Specific policies require predetermined conduct.

Policy should deal with a recognized need. It is the result of careful thought and research; deals with practical and specific matters; does not conflict with other cooperative policies; deals with recurring situations; clearly indicates the conditions, to whom, and to what extent it applies; specifies who is responsible for applying it; and must be concise, legal, and not in conflict with the cooperative's articles of incorporation and bylaws.

Policies are not all of equal importance. Some policies are of such significance they determine the character of the business. Others are limited in scope and could be changed or eliminated without effect.

Compare the significance of these two policies. One states a producer will be guaranteed the sale of all products delivered regardless of quantity or quality while another permits a 15-minute coffee break for all employees in both the morning and afternoon. The coffee break is important to employees, but if eliminated would not affect the goals and objectives of the cooperative. Determining whether a cooperative will guarantee sale of members' products or merely making every effort to move all products, or only handle products of certain sizes or quality, affects the very character of the business.

Some fundamental policy, such as a requirement to return margins to members on a patronage basis will usually be placed in a cooperative's bylaws. However, separate written policies adopted by the board and placed in a policy handbook, are more appropriate than a bylaw for handling most issues. Board policies require less formality for adoption. They can be changed easier if unanticipated problems occur. This avoids long, complicated bylaws that mix essential rules critical to a cooperative's success with simply desirable business practices.

Policy covers broad or basic area of operations and are generally long-term commitments established by the board.

Procedures implement policy. They cover routine processes established by operations supervisors based on policy and may be changed on short notice. Policymaking groups must resist making detailed rules or writing procedure.

Every business, new or old, large or small, has policies. Present policy may be written or oral. Some policies are mandatory based on State and Federal statutes. Others define and clarify the articles of incorporation, bylaws, or accepted contractual agreements (membership documents, marketing contracts, leases, loan documents).

Precedent--the fact that "we've always done it this way" is basis for policy, as long as it does not become the only basis. Printed materials issued by the cooperative such as letters to the membership, advertisements about services, price schedules, employee handbooks, contracts (marketing - purchasing - leases - loans), accounting records, consultants notes, invoices and sales tickets, are all legitimate sources of policy statements.

A careful review of the minutes or notes of a steering committee and prior director meetings is a prime source for statements of policy.

Research should be done on all these sources, materials compiled, and formalized statements of policy prepared so they will have meaning and be accepted by the membership and employees.

Few people will take the time to look through all the primary sources for a guidance in decision making. Anyone can be expected to look in a well-documented manual, properly indexed, that describes what they want to know when the situation arises.

Policies may be drafted by a paid outside consultant. If an outside consultant is used, more time may be needed to interview all the directors and management to determine the values each may have in a given policy area. The assessment of values becomes more complex if the directors express not only their values, but also try to reflect the values of the members.

A well-written and constructed policy mediates differences between conflicting values. Use of an outside consultant takes time and costs money, but the approach to any given policy area may be more objective and less biased than an internally generated policy.

Policy style can either be simple or written with considerable explanation. Most policies are written in simple form for ease in effective communication and implementation. However, some may feel that written policy should be more complex to be effective and thus leave room for misinterpretation.

o Identify--Cooperative leaders must select the general areas to be covered by policy, such as the board and management functions, organization, public relations, finances, sales/marketing/production, and employee relations.

o Formulate--Ideas for changing current policy or introducing new policy may come from the members, directors, management, employees, or paid consultants.

o Adopt--The board, after considering the various recommendations, should agree on a final format that clearly explains all aspects of policy. Before finalization, obtain policy acceptance by getting opinions and reactions of all those affected. A majority vote is needed for adoption.

o Distribute--Policy that has been identified, formulated, and adopted has no value unless all persons who are affected by the policy know and accept its content. All policy should be in written form, collected in a manual, classified as to subject matter and distributed to persons concerned with administering them. Knowledge and acceptance help to ensure consistent application.

o Implement--The manager is responsible for carrying out board policy by developing procedures to be followed, issuing instructions, and making sure concerned individuals understand, accept, and observe adopted policies.

o Control--This is the board's management job. It is the board's responsibility to determine if the manager is carrying out the established policy. Periodic reports from the manager on aspects of the cooperative's operation are needed and not just at the end of the business year.

o Review and Evaluate--This is the job of the board and management in judging the effect of any given policy. Evaluating how well policies worked is best determined by the level of understanding and acceptance of the policies by the entire organization.