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THE ROLE OF PROFFESIONAL

ASSOCIATIONS AS A TOOL FOR

SOCIAL & ECONOMIC WELFARE

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Presentation by:

Kennedy Charles WA Ruteshengyereza

Makerere University

FORMATION,GOVERNANCE &

MANAGEMENT

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�CO-OPERATIVES / SACCOS

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kennedy Charles@kcca

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�Learning Objectives

The following are key outputs:

• Understand the Meaning, Principles and values of Cooperatives
• Understand how Cooperatives/Saccos are formed
• Explain the Governance and Management structure of a Cooperative and the roles played at each level.

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�What are co-operatives/saccos?.

• They are associations
• They are formed voluntarily
• They are formed by persons
• They are formed to meet members economic, social and cultural needs
• They are jointly owned
• They jointly controlled
• They are meant to benefit the members

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�Cooperatives defined cont.-critical questions for members

• Do I own it?
• Do I use it?
• Do I control it?
• Do I benefit from it?

. The answer to all the above questions should be YES in order describe to a good co-operative. If the answer to all or any of the above questions is a NO, then the organization or institution is not a co-operative.

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��UNDERSTANDING CO-OPERATIVES USING 8 Cs

• Co-founded
• Co-financed
• Co-administered
• Co-beneficial
• Co-owned
• Co-used
• Co-controlled
• Co-liable

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�Cooperatives defined cont.

Co-operatives all over the world have common characteristics such as:

• Members are united through at least one common interest
• Members pursue the goal of improving their economic and social situation through joint actions
• Members use a jointly owned and operated unit, which provides them with services or goods.

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�Cooperative values.

Co-operatives are based on the following values:

• Self-help,
• Responsibility,
• Equality,
• Equity
• Solidarity.

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�The seven Co-operative Principles.

• Open and voluntary membership
• Democratic member control
• Member economic participation / patronage
• Autonomy and independence
• Education, training and information to promote member’s education and awareness
• Cooperation among co-operatives
• Concern for community development

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�Essential Conditions for the Success of A Co-operative

• Co-operatives need to produce visible and tangible benefits for its members , which should outweigh the costs involved in co-operation.
• The co-operative should have motivated , experienced and dynamic managers who are able to plan and implement business policies.
• The structure and management of the co-operative should correspond to the capabilities of its members
• Members should participate both as members and users.

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�CO-OPERATIVE LEADERSHIP/GOVERNANCE AND MANAGEMENT.

The basic structure of co-operative leadership and management has three parts or organs.

• The members of the co-operative society
• The board/committees put in place by the members to lead their co-operative
• The staff which is hired by the board/committee to handle the day – to – day operations.

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�Model Governance Structure of a �Co-operative

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�Duties and Responsibilities of the different organs in the governance and management structure of a Co-op.

• The responsibilities should complement the activities of other organs and lead to the achievement of the co-operative’s overall objectives.
• No organ should see itself as being more important than others or independent of others.
• All activities should be part of a total system that must function together for members benefit.

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�Annual General Meeting (AGM)

• Composition: All fully paid up members of the Co-operative

Duties and Responsibilities of AGM

• Approves the mission /vision and objectives of the co-operative,
• Protects the rights of members,
• Elects the committee and the audit / supervisory committee,
• Approves accounts of the co-operative,

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�Annual General Meeting (AGM) cont’d

• Approves business plans, annual plans, and budgets proposed by the committee,
• Approves operating and lending policies,
• Approves interest rates policies proposed by the board,
• Approves appointment of auditors and their pay,
• Undertakes any other general business deemed necessary for the good of the co-operative

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�The Committee/board

• The Committee directs the affairs of the co-operative on behalf of its general membership.
• Composition:

The Committee’s composition is determined by the AGM, which elects its members.

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�The Committee

• Supervises management in the execution of approved plans
• Mobilizes resources for the co-operative on behalf of the members
• Determines rate of interest, on management’s advice with approval of the AGM.
• Monitors the activities of committees
• Propose amendments to the society bye laws

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�The Committee

• In some cases, draws up long term and annual plans
• Report to the AGM on the activities that occurred since the last AGM, the annual budget and proposed use of profits for the financial year.
• Promote the society and its services as appropriate in day today interactions.

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�The Committee

• Depending on the size of the co-operative and the nature of its business, the committee may with the authority of the AGM create a number of sub-committees like Loans, Planning/Evaluation, Human Resource; Business Development and Disciplinary sub-committees to enable it do a better job.

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�Supervisory Committee

• Composition:
• Two or three people elected by the AGM. The members must not be members

of other committee(s)or any of its sub-committees nor members of the Management staff. They must have strong financial skills with a deeper understanding of the co-operative and its business. The supervisory Committee members should preferably include one woman and youth.

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�Supervisory Committee cont’d

• Duties and Responsibilities: 
• Ensure the society complies with the statute, the regulations, the bylaws and general meeting resolutions and policies of the board.
• Oversee the performance of the board and manager.
• Present at the annual general meeting its opinion on the statements presented by the board.

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�Supervisory Committee cont’d

• Evaluate independently or with the board and management the financial performance of the society against specific indicators developed.
• Checks for consistencies in the co-operative’s financial and operating records
• Ensures that the co-operative’s operating policies and procedures, and expenditure controls are followed
• Ensures prudent Asset and Liquidity controls

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�Supervisory Committee cont’d

• Regularly inspects books, records and transaction documents of the co-operative
• Monitors operations, especially the related financial documents and records.
• Checks operations of all co-operative’s departments, managers and officers for compliance with the set policies, rules and standards.
• Present to the general meeting a report on the committee’s activities.

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�Loans committee

Members of the board with good standing in the society.

• Review loan policies and procedures for adoption by the board? (must be written)
• Policies and procedures must be explained to the members.
• Approvals of loans for Board and management.

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�Loans committee cont’d

• Ensure loan appraisals are done competently:
• Is the loan collateral evaluated periodically?
• Are loans given after completed applications made, thorough screening and evaluation is made, approval is given by credit committee and respective signatories made?

-Are complete minutes prepared of every credit committee meeting and complete records kept by each loans officer

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�Loans committee cont’d

• Do all disbursements have appropriate payment vouchers and original receipts?
• Are there unauthorized disbursements?
• Un usually large payments
• Are disbursements made per board approved procedures?
• Are they properly recorded?

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�Management Staff

• Composition: Hired by the Committee/board (numbers may differ depending on level of operation)
• Duties and Responsibilities

Appointed and supervised by the board/committee, the Management Staff performs the following duties and responsibilities:

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�Management Staff cont’d

• Translating the mission and objectives into actions.
• Preparing Business plans, annual plans and budgets
• Maintaining books, records and accurate accounts
• Making periodic financial and operating reports
• Implementing policies and operating programmes of the co-operative

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�Requirement for execution of roles by Organs

The members make decisions in the AGMs. The agenda at the meeting should be well laid down to enable coverage of all issues to be discussed by members

• Admission of new members
• Reading of the previous minutes.
• Presentation of accountability through financial and management reports of the previous year
• Presentation of financial estimates for the next year.

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�Requirement for execution of roles by Organs

• Approval for maximum liability
• Approval of Auditors.
• Elections of the committees at an appropriate time.
• Election of delegates to institutions where the society is a member/affiliated
• Any plans that are likely to commit the society resources and affect its operation like opening of branches, acquiring of assets not forgetting approval by the Registrar.
• These forms must be accompanied by appropriate reports.

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�Requirement for execution of roles by Organs

• Discussion of the society business is more important to the growth of the society than the speeches by some people at these meeting. Therefore priority should be given to society business than other items.
• While executing their roles, reports should be provided to enable decision making. Therefore, management and the board should avail reports to the committees and members.

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�What reports?

• Membership these have to cover level of share contribution, savings including those seeking admission.
• Loans reports which must cover amounts given, recoveries, amounts in default and at risk ,amounts to be written off if any.
• Financial reports (statement of financial position, statement of income, statement of cash flows,).

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�What reports?

• Assets and liability Management of the society.
• Reports on management
• Future plans of the society operations and execution of previously resolved decisions.
• Minutes and correspondences with the society.
• Risk measures put in place.

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�Qualities of a good co-operative leader

• Basic understanding of laws and regulations governing the cooperative societies.
• Dedication and loyalty to the co-operative cause and the community at large,
• Trustworthiness and honesty,
• Good knowledge and commitment to the co-operative business model,
• Adherence to the cooperative values and principles

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�Qualities of a good co-operative leader

• Objectivity and fairness,
• Listening and consensus building,
• General business aptitude including marketing concepts,
• Ability to make logical judgment on a wide range of co-operative issues,
• Ability to work as part of a team.
• Visionary,
• Strong oral communication skills

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�Indicators of good governance in a cooperative

• Participation - Organizational Growth
•   Transparency
• Accountability
• Consensus Orientation
• Efficiency and Effectiveness
•   Equity (fairness to all)
• Respect for Rules, Policies and Regulations
• Strategic and Visionary Leadership:
•   Knowledge and Skill in Leadership/ management

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�Conclusion

• Good corporate governance goes hand-in-hand with effective member empowerment and healthy internal democracy. It moves to strengthen members’ role in their own cooperatives also strengthens the cooperatives’ leadership and management.

The Laws, Regulating, bylaws, policies, values and principles of co-operatives should always be cherished as a way of strengthening governance.

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GOOD LEADERSHIP, GOVERNANCE AND MANAGEMENT FOR DEVELOPMENT OF CO-OPERATIVES

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END

THANK YOU