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New Generation Cooperatives: Managers’, Directors’, And Owners’ Responsibilities

New Generation Cooperatives: Managers’, Directors’, And Owners’ Responsibilities. Gary Brester Dept. of Agricultural Economics and Economics Montana State University AGBE 445 Co-op Business Principles & Practices Spring 2014. OUTLINE. . Overview of New Gen Cooperatives

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New Generation Cooperatives: Managers’, Directors’, And Owners’ Responsibilities

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  1. New Generation Cooperatives: Managers’, Directors’, And Owners’ Responsibilities Gary Brester Dept. of Agricultural Economics and Economics Montana State University AGBE 445 Co-op Business Principles & Practices Spring 2014

  2. OUTLINE • . Overview of New Gen Cooperatives • . Management Responsibilities • . Director Responsibilities • . Owner/Grower Responsibilities • . Questions

  3. Motivation • . $2 Billion Of Investments • . Lots Of Publicity • . Rural Development? • . Value Added Agriculture? • . Risk Management? • . USDA Resources

  4. New Generation Cooperatives • . They Are Different From Traditional Cooperatives • . Capitalization • . Rights And Obligations To Deliver • . Stock Is Tradeable • . But, Should Not Be Considered Similar To Other Tradeable Stocks • . Why Are IOFs Ignoring This Opportunity? • . Rationale Is Usually Market Access

  5. What Do The Following New Gens Have In Common? • . South Dakota Soybean Processors • . Pro-Gold • . Spring Wheat Bakers • . North American Bison • . Walton Bean Co-op • . Bushel 42 Pasta • . Century 21 Alliance

  6. OUTLINE • . Overview of New Gen Cooperatives • . Management Responsibilities • . Director Responsibilities • . Owner/Grower Responsibilities • . Questions

  7. Management Responsibilities • . Fiduciary Responsibility To Owners • . Protect Investment • Sustain Business Entity • . Maximize Returns On Investment • Higher Beet Prices • Patronage Refunds • Growth In Price Of Delivery Rights

  8. Management Responsibilities • For Cooperatives, Must Optimize Grower-To-Sales Issues • Price Of Delivery Rights • Financial Condition • Strong Balance Sheet • Annual Net Income • Making Delivery More Costly • Unnecessary Harvest Costs • Unit Retain Management Plan

  9. Management Responsibilities • Develop/Implement The Strategic Management Business Plan • Monitor Progress • Solve Problems • Hire Employees • Evaluate Employees • Reward Employees • Fire Employees

  10. Management Responsibilities 8. Provide Leadership • . Communication • . Understand Problems • . Listen • . Quick Action • . Explain Decisions • . Realize How People View Decision-Making

  11. Management Responsibilities • Foster Trust • Why? • Because Trust Is More Difficult ToCreate Than Money • And Much Easier To Lose • Actions Foster Trust/Distrust • No Place For Arrogance • Fosters An “US” vs. “THEM” • Communication • Listening/Oral Comments • Newsletters

  12. Newsletter Topics • Quarterly/Easy To Create • Human Interest • Regional Crops/Issues • Sugar Prices/Policy/Branding • Share Prices/Open Cooperative • Harvest/Pile Conditions • Removal Of Pilers • New Piling Policies • New Heat Rules • Why Is 18 Days Optimal?

  13. OUTLINE • . Overview of New Gen Cooperatives • . Management Responsibilities • . Director Responsibilities • . Owner/Grower Responsibilities • . Questions

  14. Director Responsibilities • . Manage ONE Employee: CEO • . Hire/Retain/Replace Decisions • . Develop Written Annual Goals • . Evaluate CEO Performance Annually • Provide Written Performance Evaluation • Reward Good Performance • . Work With CEO To Develop Strategic Direction

  15. Director Responsibilities • . Educate CEO Regarding Grower Concerns • . Must Communicate The Relative Importance Of Various Concerns • . Provide Owners With Explanations Of Decisions • . Recognizing That Some Decisions/Reasons Cannot Be Made Public • . Directors Serve An Important Education Function

  16. Director Responsibilities • . Seek/Attend Management Education • . Request Outside Help As Needed • . Ex-Officio Members • . Use Consultants On Specific Matters • . Submit Themselves To Evaluations • . Must Be Seen As Unbiased

  17. OUTLINE • . Overview of New Gen Cooperatives • . Management Responsibilities • . Director Responsibilities • . Owner/Grower Responsibilities • . Questions

  18. Owner/Grower Responsibilities • . Growers Must Realize That They Are No Longer On An Island • . They Are Part Of A Group Effort • . Sometimes Have To Sacrifice As An Individual To Contribute To The Whole • . This Requires Strong Leadership In Return

  19. Owner/Grower Responsibilities • . Growers Must Follow The Rules • . Pre-Defoliating • . Loading Trucks If Hot • . Hauling Mud • . Beginning Harvest On-Time • . If The Rules Are Bad, Get Them Changed • . Ask Questions • . Demand Reasonable And Logical Answers • . Must Participate In Education

  20. QUESTIONS?

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