CODE OF GOOD GOVERNANCE AND CONDUCT

FOR COOPERATIVES
DRAFT FOR DISCUSSION WITHIN CDA ONLY

In accordance with the State’s policy to actively promote cooperative governance

reforms to foster the creation and growth of cooperative as a practical vehicle for
promoting self-reliance and harnessing people’s power towards the attainment of
equity, sustainable economic development and social justice.

CHAPTER I
The Cooperative Governance

Article I- Definition of Terms

a.    Board of Directors shall mean that body entrusted with the management of the
affairs of the cooperative under its articles of cooperation and bylaws;
b.    Member includes a person either natural or juridical who adhering to the
principles set forth in this Code and in the Articles of Cooperative, has been admitted
by the cooperative as member;

c.    General Assembly shall mean the full membership of the cooperative duly
assembled for the purpose of exercising all the rights and performing all the
obligations pertaining to cooperatives, as provided by this Code, its articles of
cooperation and bylaws;

d.    Representative Assembly means the full membership of a body of

representatives elected by each of the sectors, chapter or district o the cooperative
duly assembled for the purpose of exercising such powers lawfully delegated unto
them by the general assembly in accordance with its bylaws;

e.    Committee shall refer to any body entrusted with specific functions and
responsibilities under the By-laws and resolution of the general assembly or the
board of directors.

f.    Articles of Cooperation means the articles of cooperation  registered under RA

No. 2520 and includes a  registered amendments thereof.

g.    By-laws  means the by-laws registered under RA No. 9520 and includesany 
registered amendment thereof.

h.    Management – refers to the body authorized to direct the business activities of
the cooperative in accordance with the policies determined or promulgated by the
Board.

 (Note: Consult Audit Manual with CRITD)

h.   Internal Auditing- refers to an independent and objective audit conducted by the
body entrusted by the By-laws, resolution of the General Assembly or the Board of
Directors to perform internal audit function. This may also be designed to add value,
improve the operation of the cooperative, and serve as a tool for policy formulation.  

i.    External Auditing – refers to audit conducted by an auditor, who is (a)

independent of the cooperative being audited or a subsidiary thereof;  (b) a member
of a recognized professional accounting association; or (c) a member of cooperative
auditors’ association.

j.    Cooperative Governance- refers to the system, which enhances the standards
set-up for the cooperatives that would protect the interest and build strong linkages
with the members, creditors and other stakeholders.

k.    Authority-refers to the Cooperative Development Authority

l.    Developmental Plan- refers to the plan of action of the cooperative for one year
or more on matters involving acts of ownership as opposed to those of merely
administration/management. The plan may be to expand business activity, incur
substantial obligation, acquire/renovate office building, acquire real properties not in
the course of annual business activity and the like which requires General Assembly
action.

Article II-The Articles of Cooperation and By-laws

An Article of Cooperation is a contract between the cooperative and the State,

represented by the Cooperative Development Authority.

The By-laws of the cooperative  shall be the contract between the cooperative and
its members. The By-laws constitute the private “ laws “ or internal set of “rules and
regulations” that will govern the cooperative affairs. As the By-laws are the private
laws of the cooperative, the provisions thereof must be construed and applied in
accordance with the intent of its own framers.  The interpretation and application
thereof as they are internal matters should first be resolved by the cooperative itself.

 
Article III-The Cooperative Purpose and Powers: Extent

A cooperative re-registered and registered under RA 9520 shall have the powers,
rights and capacities and such other powers granted by RA 9520 or necessary to
carry out its purposes as stated in its Articles of Cooperation. Thus, if a business is
not expressly authorized in the Articles of Cooperation and is not necessary or
incidental in the furtherance of the cooperative purpose for which it was organized,
the same cannot be legally undertaken by the cooperative.

Article IV-The General Assembly

 
The general assembly shall be the highest policy-making body of the cooperative
and shall exercise such powers as are stated in RA No. 9520, in the articles of
cooperation and in the bylaws of the cooperative. As the supreme body, the interest
of the members must be protected at all times whereby any business to be
undertaken must be embodied in an annual plan, program, and budget that must be
approved by the General Assembly. New business not included in the plan approved
in the last general assembly and believed to be profitable, may be undertaken by the
Board of Directors and must be reported to the next General Assembly;

The foundation of a cooperative is cooperation, Therefore, any member who cannot

respect the decisions of the General Assembly has no place in the organization, and
may be subject to disciplinary action.

No officer or member shall bring any complaint against any officers, members and
the cooperative itself before the appropriate administrative agency or the court
unless the matter passed the appropriate body handling/settling
grievances/complaint in the cooperative or the matter has passed the General
Assembly.
    
1.    Composition of the General Assembly

The General Assembly shall be composed of such members who are entitled to vote
as defined under the Articles of Cooperation and By-laws of the cooperative.

2.     Exclusive powers of the General Assembly which cannot be delegated:

"(1) To determine and approve amendments to the articles of cooperation and by-
laws;

"(2) To elect or appoint the members of the board of directors, and to remove them
for cause. However, in the case of the electric cooperatives registered under this
Code, election of the members of the board shall be held in accordance with its
bylaws or election guideline of such electric cooperative; and

"(3) To approve developmental plans of the cooperative.

(4) To delegate some of its powers to a smaller body of the cooperative, subject to
such other provisions of RA No. 9520 and only for purposes of prompt and intelligent
decision-making, by three-fourths (3/4) vote of all its members with voting rights,
present and constituting a quorum

3.     General Assembly Meetings   

Meetings of the general assembly may be regular or special.  All proceedings and
business(es) undertaken at any meeting of the general assembly within the powers
or authority of the Cooperative, there being a quorum, shall be valid.

A.    Regular General Assembly Meeting- The General Assembly shall hold its
annual regular meeting at the principal office of the Cooperative or at any place in
the Philippines on a date fixed in the by-laws, or if not so fixed on any date within
ninety (90) days after the close of its fiscal year.
1.    A written notice shall be sent by the secretary of the cooperative to all members
of record at their official addresses at least two (2) weeks prior to the meeting.

2.    The Annual General Assembly- Change of Date

Where the date of the annual meeting of the cooperative is fixed in the cooperative
by-laws, the same cannot be dispensed with or postponed by the board of directors
in order to extend the term of office of the board or officers. This rule, however,
admits exceptions, as when the annual meeting cannot be held for some justifiable
and valid reasons.  It is however, necessary that the postponement of the annual
meeting be for reasonable time and provided that proper notice shall be sent to all
members of the cooperative in the manner prescribed by the cooperative by-laws. It
should be the duty of the Board of Directors to determine the date and time to hold it
taking into consideration the circumstances.

The present board shall exert its best effort to call for the annual meeting within two
(2) months from the date of the meeting as specified in the cooperative’s by-laws. If
for justifiable reason, the annual meeting has to be postponed, the cooperative
should notify the Authority in writing of such postponement at least 10 days before
the date of the annual meeting

B.    Special General Assembly Meeting- A special general assembly meeting may
be held- The Board of Directors may, by a majority vote of all its members, call a
special general assembly meeting at any time to consider urgent matters requiring
immediate membership decision.  The Board of Directors must likewise call a special
general assembly meeting within one (1) month from receipt of a written request
from:

a.    at least ten percent (10%) of the total number of members entitled to vote;

b.    the Audit Committee; or

c.    the Federation or Union to which the Cooperative is a member; or

d.    upon Order of the Cooperative Development Authority.  

1.    make audit report- to report to the members the result of audit examination or
other investigation of the affairs of a cooperative;

2.    hold the general assembly when a cooperative fails to hold an annual general
assembly during the period fixed in the By-laws

3.    upon  petition of  at least 10% of members of the cooperative and for good
cause  shown to call a regular meeting/special meeting .

e.    By the Cooperative Development Authority or by the board. In case of a newly
registered  cooperative, within ninety  (90)days of such approval of  registration.
 
C.    Notice of Meeting.  All notices of meetings shall be in writing and shall include
the date, time, place, and agenda thereof stated therein.
a.    Regular General Assembly Meeting.  Notice of the annual regular general
assembly meeting shall be served by the Secretary, personally or his/her duly
authorized representative, by registered mail, or by electronic means  to all members
of record at his/her last known postal address, or by posting or publication, or
through other electronic means, at least one (1) week before the said meeting.  It
shall be accompanied with an agenda, minutes of meeting of the last general
assembly meeting, consolidated reports of the Board of Directors and Committees,
audited financial statements, and other papers which may assist the members to
intelligently participate in the proceedings.
b.    Special General Assembly Meeting.  Notice of any special general assembly
meeting shall be served by the Secretary personally or his/her duly authorized
representative, by registered mail, or by electronic means upon each members who
are entitled to vote at his/her last known postal address, or by posting or publication,
or through other electronic means, at least one (1) week before the said meeting.   It
shall state the purpose and, except for related issues, no other business shall be
considered during the meeting.
c.    Waiver of Notice.  Notice of any meeting may be waived, expressly or impliedly,
by the member concerned.
4. Manner of Voting-

Only members entitled to vote shall be qualified to participate and vote in any
general assembly meeting.

a.    Primary cooperative shall have only one (1) vote for each member. No voting
agreement or other device to evade the one-member –one-vote provision shall be
allowed. No vote by proxy shall be permitted unless provided specifically in the by-
laws of the cooperative.
b.    Members of Secondary or Tertiary cooperative shall have voting rights as
delegate of members-cooperative, but such cooperative shall be limited to only five
(5) votes. The votes cast by the delegate shall be deemed as votes cast by the
members thereof. The By-laws of a cooperative may provide for voting by proxy.
Voting by proxy means allowing a delegate of a cooperative to represent or vote in
behalf of another delegate of the same cooperative.

5.     Quorum

A.    Quorum for General Assembly Meeting.  During regular or special general
assembly meeting, at least twenty-five percent (25%) of the total number of
members entitled to vote shall constitute a quorum.  

B.    Order of Business.  As far as practicable, the order of business of a regular

general assembly meeting shall be:
a.    Roll Call;
b.    Proof of due notice;
c.    Call to order;
d.    Declaration/Consideration of presence of quorum;
e.    Reading, consideration and approval of the minutes of the previous meeting;
f.    Presentation and approval of the reports of the board of directors, officers, and
the committees, including audited financial statements of the Cooperative;
g.    Unfinished business;
h.    New business;
i.    Election of directors and committee members
ii.    Approval of Development and/or annual Plan and Budget
iii.    Hiring of External Auditor
iv.    Other related business matters
i.    Announcements; and
j.    Adjournment
 
C.    Voting System. Each member of a primary cooperative shall have only one (1)
vote. In the case of members of secondary or tertiary cooperatives, they shall have
one (1) basic vote and as many incentive votes as provided for in the bylaws but not
exceed five (5) votes. The votes cast by the delegates shall be deemed as votes
cast by the members thereof.

However, the bylaws of a cooperative other than a primary may provide for voting by
proxy. Voting by proxy means allowing a delegate of a cooperative to represent or
vote in behalf of another delegate of the same cooperative.  Election or removal of
Directors and Committee members shall be by secret ballot.  Action on all matters
shall be in any manner that will truly and correctly reflect the will of the membership.

Article V-The Board Governance

    
The Board of Directors is primarily responsible for the governance of the
cooperative. It is the governing body of the cooperative upon whom the management
of the cooperative affairs is vested. The administration and management of the
affairs of the cooperative is the primary duty of the board.

In the exercise of management function, it is the duty the Board to exercise the same
in conformity with the Articles of Cooperation, By-laws and the Cooperative Code.
Good judgment must always be observed solely in the interest of the cooperative.

•    Interference of Member

In the absence of fraud, bad faith or negligence so as to amount to a breach of trust,

the members cannot interfere with the exercise of cooperative judgment by the
Board relating to the management of the cooperative.

•    Power and Authority

The board of directors shall be responsible for the strategic planning, direction-
setting and policy-formulation activities of the cooperatives.The management powers
of the Board refer to management prerogative, including ordinary cooperative
transactions

    There are powers that are reserved to the General Assembly  and cannot be
exercised solely by the directors until they are approved or ratified by the Gneral
Assembly. They are as follows:

1    Amendments of Articles of Cooperation and  By-laws Article 18 );

2    Division of cooperative ( Article 20);

3    Merger and consolidation of cooperative ( Article 21);

4    Investment of cooperative ‘s fund in another business or for any purpose other
than the primary purpose  ( Article 49);

5    Sale, lease , exchange, mortgage, pledge or other disposition of all or

substantially all of the cooperative’s assets;

6    Incur, create or increase bonded indebtedness;

7    Removal of elective director, officers or committee members ( Article 51);

8    Dissolution of the cooperative (Article 65-66).

 
1.    Composition and Term of the Board of Directors

Unless otherwise provided in the bylaws, the direction and management of the
affairs of a cooperative shall be vested in a board of directors which shall be
composed of not less that five (5) nor more than fifteen (15) members elected by the
general assembly for a term of two (2) years and shall hold office until their
successors are duly elected an qualified, or until duly removed for caused.

2. Election of the members of the Board of Directors. The members of the Board of
Directors shall be elected by secret ballot by members entitled to vote during the
annual regular general assembly meeting or special general assembly meeting
called for the purpose.

2.    Meeting of the Board   Quorum  Requirements  and  Manner of Voting

Board meetings are for intelligent discussion in weighing, analyzing and deciding on
various ideas or viewpoint before arriving at wise decisions or sound policies
responsive to the needs of the members.

a.    In the case of primary cooperatives, regular meetings of the board of directors
shall be held at least once a month.

b.    Special meetings of the board of directors may be held at any time upon the call
of the chairperson or a majority of the members of the board: Provided, That written
notices of the meeting specifying the agenda of the special meeting shall be given to
all members of the board at least one (1) week before the said meeting. The call
shall be addressed and delivered through the Secretary stating the date, time and
place of such meeting and the matters to be considered.

c.    Notice of regular and special meetings of the Board of Directors, unless
dispensed with, shall be served by the Secretary in writing or through electronic
means to each director at least two (2) days before such meeting.
d.    A majority of the members of the Board shall constitute a quorum for the
conduct of business, unless the bylaws proved otherwise. Any decision or action
taken by the majority members of the Board of Directors in a meeting duly
assembled shall be a valid cooperative act.

e.    Directors cannot attend or vote by proxy at board meetings.

The regular or special meetings shall be for purposes of treating a clear agenda as
specified in the Notice furnished by the Board Secretary.

     4. Election of Officer within the Board.  The Board of Directors shall convene
within ten (10) days after the general assembly meeting to elect by secret ballot from
among themselves the Chairperson and the Vice-Chairperson, and to elect or
appoint the Secretary and Treasurer from outside of the Board.  

3.    Compensation of the Members of the Board

Subject  to the approval of the general assembly and if of f the By-laws so provides,
the members of the Board of Directors and Committees may, in addition to
reasonable per diems for actual attendance to board, and reimbursement of actual
and necessary expenses while performing functions in behalf of the cooperative, be
given regular compensation,  Provided,  that no additional compensation other than
the per diem shall be paid in the first year of existence of the cooperative,Provided,
further, that the directors shall not be entitled to any per diem when, if in the
preceding calendar year, the cooperative reported a net loss or had a dividend rate
less than the official inflation rate for the same year.

4.    Powers, Functions and Responsibilities of the Board

The Board of Directors shall direct, control and supervise the business, manage the
property of the cooperative and may, by resolution, exercise all such powers of the
cooperative as are not reserved for the general assembly under the by-laws and the
Cooperative Code of the Philippines.

To insure a high standard of best practice for the cooperative and its members, the
Board should conduct itself with utmost honesty and integrity in the discharge of its
duties, functions and responsibilities.

It is the Board’s responsibility to foster the long-term success of the cooperative and
secure its sustained competitiveness in a manner consistent with its fiduciary
responsibility, which it should exercise in the best interest of the cooperative and its
members.

While the management of the day-to-day affairs of the cooperative is the

responsibility of the management team, the Board is, however, responsible for
monitoring and overseeing actions of the management team.

The Board of Directors shall have the following functions and responsibilities:
a.    Provide over-all policy direction;
b.    Formulate development plan;
c.    Review the annual plan and budget and recommend for the approval of the
General/Representative Assembly;
d.    Evaluate the capability and qualification and recommend for the approval of the
General/Representative Assembly the engagements of the services of an External
Auditor;
e.    Appoint and terminate, based on just cause, the General Manager or Chief
Executive Officer (CEO);
f.    Review, monitor and evaluate the effectiveness of the programs, projects and
activities;
g.    Formulate and review the vision, mission and goals of the cooperative;
h.    Establish risk management system;
i.    Establish performance evaluation system at all levels;
j.    Review and approve the organizational and operational structures;
k.    Establish policies and procedures for the effective operation and ensure proper
implementation of such;
l.    Appoint the members of the Mediation and Conciliation Committee, Ethics
Committee, Education and Training Committee and other Officers as specified in the
Code and By-laws of the cooperative;
m.    Decide election-related cases involving the Election Committee and its
members;
n.    Act on the recommendation of the Ethics Committee on cases involving
violations of the Code of Governance and Ethical Standards;
o.    Ensure compliance by the cooperative with the regulations of the Authority and
other statutory requirements of appropriate government agencies;
p.    Report to the general/representative assembly the performance and
achievements of the cooperative;
q.    Present to the general/representative assembly policies which require
confirmation as provided under the law, the cooperative by-laws, and regulations;
r.    Present to the general/representative assembly the financial, social and
performance reports; and
s.    Perform such other functions as may be prescribed in the By-laws or authorized
by the General/Representative Assembly.

5.    Elections, Vacancies and Removal of Member of the Board

The members of the Board of Directors shall be elected by secret ballot by members
entitled to vote during the annual general assembly meeting.

Any vacancy occurring in the Board by reason of death, incapacity, removal or

resignation may be filled up by a majority vote of the remaining directors, if still
constituting a quorum, otherwise, such vacancy shall be filled by the general
assembly in a regular or special meeting called for the purpose. Vacancy by
expiration of term must be filled up by the General Assembly in a general or special
meeting called for that purpose. The elected director shall serve only for the
unexpired term of his/her predecessor in office.
A director may be removed from office for cause by three-fourths (3/4) votes of the
regular members and constituting a quorum in a regular or special general assembly
called for the purpose after having been given the opportunity to be heard.

* The Hold-Over Principle

As a general rule, the directors and officers of a cooperative shall serve only for the
term of office as fixed in the By-laws. However, in case of failure to elect a new set of
directors or officers, the incumbents may continue their functions until their
successors are duly elected and qualified or until duly removed for cause.

6.    Qualifications and Disqualification of the Board of Directors

A.     Qualifications of the director

In general, any member of a cooperative who under its by laws has the right to vote
and be voted upon and who possesses all the qualifications and none of the
disqualification provided by law or in the by-laws shall be eligible for election as
director. However, additional qualifications may be required by the cooperative such
as, but not limited to the following:
a.    Has paid the minimum capital requirement;
b.    Has no delinquent account with the cooperative;
c.    Have continuously patronized the cooperative services;
d.    A member in good standing for the last two (2) years;
e.    they are present during the elections so that they can personally attest to their
willingness or unwillingness to serve the cooperative.
f.    Completed or willingness to complete within the prescribed period the required
education and training whichever is applicable; and
g.    Other qualifications prescribed in RA No. 9520 and it Revised Implementing
Rules and Regulations.
 
B.     Disqualification of the director

Any member who is under any of the following circumstances shall be disqualified to
be elected as a member of the Board or any committee or to continue as such:

a.    Holding any elective position in the government, except that of a party list
representative being an officer of a cooperative he/she represents;
b.    The members of the board of directors shall not hold any other position directly
involved in the day-to-day operation and management of the cooperative;
c.    Having direct or indirect personal interest with the business of the Cooperative;
d.    Having been absent for  in three (3) consecutive meetings or in more than fifty
percent (50%) of all meetings within the twelve (12) month period unless with valid 
excuse as approved by the board of directors;
e.    Being an official or employee of the Cooperative Development Authority, except
in a cooperative organized among themselves;
f.    Having been convicted in administrative proceedings or civil/criminal suits
involving financial and/or property accountability; and
g.    Having been disqualified by law
h.    Other disqualification as may be deemed necessary.

Article VI-Officers of the Cooperative

A.     The officers of a cooperative are those that are given that character by law
and/or by the cooperative by-laws. They are as follows:
1.    Members of the Board of Directors elected by the general assembly;

2.    Members of the Board of Directors appointed by the majority vote of the
remaining directors if still constituting a quorum, in case of vacancy other than by
expiration of term;

3.    Members of committees elected by the general assembly;

4.    Members of the committees appointed by the Board of Directors;

5.    Treasurer; and

6.    Secretary.

Note: how about general manager or chief executive officer as provided for under
Article 5(11), RA 9520?

B.     Mode of Officership

1.    Elected Officers- The elected officers are those elected by the General
Assembly pursuant to the provision of the cooperative by-laws, to wit:
1.    Members of the Board of Directors;
2.    Members of the Audit and Election Committees.

2.    Appointed Officers- These officers are those appointed by the board of directors,
to wit:
1.    Treasurer;
2.    Secretary;
3.    Members of other committees ( aside from the above);
4.    Board member appointed by the Board of Directors, in case of vacancy in the
board of directors, other than by expiration of the term.

By reason of the prohibition provided under Article 42 of R.A. 9520 and/or public
policy, the aforementioned officers of the cooperative with relation up to the third
degree of consanguinity or affinity shall not serve as elective or appointive officers in
the Board and/or committee of the same cooperative.

Likewise, husband and wife, although not considered relatives by consanguinity or

affinity, are likewise prohibited to serve as elected or appointed officers in the Board
and/or committee for the reason that they are considered as one person with the
same interest. Their property relations are governed by the Absolute Community
System under the Family Code, which according to the Code Commission is “ in
consonance with the Filipino custom, which is nearer to the ideal of family unity and
is more in harmony with traditional oneness of the Filipino Family.” (Report of the
Commission page 25).  

 
C.     Relationships covered by prohibition

The degrees of relationship covered by the prohibition are shown hereunder:

                        Relationship

 Degree        By Consanguinity            By Affinity

1st degree    Parents to son/daughter        Parents-in-law to

                                        son/daughter-in-law

        2nd degree        Grandparent to grandchild        Brother /sister-in-

                                law  to sister/brother-
                                        in- law
                    Brother to sister                        

        3r degree              Great  grandparents to great               Great grandparent-in-
                       grandchild                       law to great grand-
                                                child- in-law
Uncle/Aunt to nephew/niece               Uncle/ aunt in-law
                                               to  nephew/niece-in-
                                               law

2.     Duties and Responsibilities of the Officers.            

 
The cooperative shall have a Chairman, Vice-Chairman, Treasurer and a Secretary
who shall serve according to the functions of their respective offices as follows:

The Chairperson shall:

a.    Set and prepare the agenda for board meetings in coordination with the other
members of the Board of Directors;
b.    Preside all meetings of the Board of Directors and General/Representative
Assembly;
c.    Sign contracts, agreements, certificates and other documents on behalf of the
cooperative as authorized by the Board of Directors or by the
General/Representative Assembly as prescribed in their By-laws; and
d.    Perform such other functions as may be authorized by the Board of Directors.

The Vice Chairperson shall:

a.    Perform all duties and functions of the Chairperson in the absence of the latter,
Provided, however, that in case of death, resignation, removal or permanent
incapacity of the Chairman, the Board of Directors shall elect/appoint a new
Chairman.  ; and
b.    Perform such other duties as may be delegated to him/her by the Board of
Directors.
The Treasurer shall:
a.    Ensure that all cash collections are deposited in accordance with the policies set
by the Board of Directors;
b.    Have custody of funds, securities, and documentations relating to assets,
liabilities, income and expenditures;
c.    Monitor and review the financial management operations of the cooperative,
subject to such limitations and control as may be prescribed by the Board of
Directors;
d.    Ensure the maintenance of full and complete records of cash transactions;
e.    Ensure maintenance of  a Petty Cash Fund;
f.    Maintain a Daily Cash Position Report; Pay all financial obligations incurred by
the Cooperative as approved by the Manager and/or Board of Directors.
g.    Render reports and certify the correctness of the cash position of the
Cooperative in all financial statements and other reports submitted to the Board of
Directors, General Assembly and the Cooperative Development Authority;
h.    Turn over to his successor all monies, securities, papers, books and other
properties belonging to the Cooperative in his possession upon the expiration
/termination of his term of office;
i.    Act as Secretary in case of the latter’s absence or incapacity to perform his/her
duties; and
j.    Perform such other functions as may be prescribed in the By-laws or authorized
by the Board of Directors.
The Secretary shall:
a.    Keep an updated and complete registry of all members;
b.    Record, prepare and maintain records of all minutes of meetings of the Board of
Directors and the General/Representative Assembly;
c.    Ensure that the necessary actions and decisions  of the Board of Directors are
transmitted to the management for compliance and implementation;
d.    Issue and certify the list of members who are entitled to vote as determined by
the Board of Directors;
e.    Prepare and issue Share Certificates and maintain the share and transfer book;
f.    Serve notice of all meetings called and certify the presence of quorum in the
conduct of all meetings of the Board of Directors and the General/Representative
Assembly;
g.    Keep copies of the Treasurer's reports and other reports;
h.    Turn over to his successor all books, records and other properties belonging to
the Cooperative in his possession upon the expiration/termination of his term of
office;
i.    Act as Treasurer in case of the latter’s absence or inability to perform his duties;
j.    Serve as custodian of the cooperative seal; and
k.    Perform such other functions as may be prescribed in the By-laws or authorized
by the Board of Directors.

Article VII-The Management Staff

The Board of Directors shall appoint the members of the Management Staff, fix the
compensation and tenure of office. The Management Staff shall be a core
management team composed of manager, cashier, bookkeeper, accountant, and
other position as may be necessary or as provided for in their Human Resource
Manual shall take charge of the day-to-day operations of the cooperative. The Board
of Directors shall appoint, fix their compensation and prescribe for the functions and
responsibilities.  

A.    Minimum Composition:

1.    The General Manager

2.    Accountant/Bookkeeper
3.    Cashier

Other members of the management staff may be proposed by the General Manager
and subject to the approval of the Board of Directors.  The qualifications, duties and
responsibilities, salaries, and terms of office of the additional staff shall be approved
by the Board of Directors.

B.    Qualifications:

Qualification of the General Manager. No person shall be appointed to the position of

general manager unless he/she possesses the following qualifications and none of
the disqualifications herein enumerated:
a.    Must be familiar with the business operation of the Cooperative;
b.    Must have at least two (2) years experience in the operations of Cooperative or
related business;
c.    Must not be engaged directly or indirectly in any activity similar to the business
of the Cooperative;
d.    Must not have been convicted of any administrative, civil or criminal cases
involving moral turpitude, gross negligence or grave misconduct in the performance
of his/her duties;
e.    Must be of good moral character;
f.    Must not have been convicted of any  administrative, civil or criminal case
involving financial and/or property accountabilities at the time of his/her appointment;
and
g.    Must undergo pre-service and/or in-service trainings.

Qualifications of Accountant, Cashier, and Bookkeeper.  No person shall be

appointed to the position of accountant and bookkeeper unless they possess the
following qualifications and none of the disqualifications herein enumerated:
a.    Bachelors degree in accountancy must be required for Accountant, however,
Cashier and Bookkeeper must be knowledgeable in handling monetary transactions,
accounting and bookkeeping;
b.    Must have at least two (2) years experience in Cooperative or related business;
c.    Must not be engaged directly or indirectly in any activity similar to the business
of the Cooperative;
d.    Must not be convicted of any administrative, civil or criminal case  involving
moral turpitude, gross negligence or grave misconduct in the performance of his/her
duties;
e.    Must be of good moral character;
f.    Must be willing to undergo pre-service and/or in-service trainings   in accounting;
and
g.    Must not have been convicted of any administrative, civil or    criminal case
involving financial and/or property accountabilities at the time of his/her appointment.
C.    Functions and responsibilities

The General Manager or Chief Executive Officer or equivalent position. The General
Manager or Chief Executive Officer or equivalent position shall:
a.    Oversee the overall day to day business operations of the cooperative by
providing direction, supervision, management and administrative control over all the
operating departments subject to such limitations as may be set forth by the Board of
Directors or the General/Representative Assembly;
b.    Assist the Board of Directors in the formulation of the Cooperative's
Development Plan including Annual Plan and Budget, Programs and Projects, for
approval of the General/Representative Assembly;
c.    Provide systems and procedures in the implementation of policies;
d.    Implement the duly approved plans and programs of the cooperative and any
other directive or instruction of the Board of Directors;
e.    Provide and submit to the Board of Directors monthly reports on the status of the
cooperative's operation vis-a-vis its targets and recommend appropriate policy or
operational changes, if necessary;
f.    Represent the cooperative in any agreement, contract, business dealing, and in
any other official business transaction as may be authorized by the Board of
Directors;
g.    Ensure compliance with all administrative and other requirements of regulatory
bodies; and
h.    Perform such other functions as may be prescribed in the By-laws delegated by
the Board of Directors or authorized by the General/Representative Assembly.

Cashier. The Cashier of the Cooperative, who shall be under supervision and control
of the General Manager shall:
a.    Handles monetary transactions;
b.    Receives/collects payments and deposits;
c.    Responsible for money received and expended;
d.    Prepares reports on money matters; and
e.    Perform such other duties as the Board of Directors may require.

Accountant.  The Accountant of the Cooperative, who shall be under supervision and
control of the General Manager shall:
a.    Install an adequate and effective accounting system within the Cooperative;
b.    Render reports on the financial condition and operations of the Cooperative
monthly, annually or as may be required by the Board of Directors and/or the general
assembly;
c.    Provide assistance to the Board of Directors in the preparation of annual budget;
d.    Keep, maintain and preserve all books of accounts, documents, vouchers,
contracts and other records concerning the business of the Cooperative and make
them available for auditing purposes to the Chairperson of the Audit Committee; and
e.    Perform such other duties as the Board of Directors may require.

Bookkeeper.  The bookkeeper of the Cooperative who is under supervision and

control of the Accountant shall:
a.    Records and update books of accounts;
b.    Provide assistance in the preparation of reports on the financial condition and
operations of the Cooperative monthly, annually or as may be required by the Board
of Directors and/or the general assembly;
c.    Keep, maintain and preserve all books of accounts, documents, vouchers,
contracts and other records concerning the business of the Cooperative and make
them available for auditing purposes to the Chairperson of the Audit Committee; and
d.    Perform such other duties as the Board of Directors may require.
The accountant or the bookkeeper of the cooperative shall be responsible for the
maintenance of the cooperative in accordance with generally accepted accounting
practices. He shall also be responsible for the production of the same at the time of
audit or inspection.

Article VIII-The Committees

         
The Committees shall be constituted in aid of good cooperative governance.

A.    The Audit Committee

The Audit Committee  shall be composed of at least three (3) members to be elected
during the General Assembly meeting and shall hold office for a term of one (1) year
or until their successors shall have been elected and qualified. Within ten (10) days
from their election, they shall elect among themselves a Chairman, Vice-Chairman
and a Secretary.  No member of the Committee shall hold any other position within
the Cooperative during his/herterm of office.

The audit committee shall be directly accountable and responsible to the General
Assembly. It shall have the power and duty to continuously monitor the adequacy
and effectiveness of the cooperative's management control system and audit the
performance of the cooperative and its various responsibility centers.

The audit committee shall be responsible for the continuous and periodic review of
the books and records of account to ensure that these are in accordance with
generally accepted accounting practices.

The Audit Committee shall:

a.    Audit the performance of the cooperative and its various responsibility centers;
b.    Monitor the adequacy and effectiveness of the cooperative's management and
internal control system;
c.    Review continuously and periodically the books of account, financial records,
and policies governing internal control, accounting and risk management to ensure
that these
b.    are in accordance with the cooperative principles and generally accepted
accounting procedures;
c.    Review the internal audit report of the cooperative;
d.    Follow up actions on the internal and external audit recommendations;
e.    Discuss the result of the internal audit with the Board of Directors;
f.    Submit reports on the result of the internal audit and recommend necessary
changes on policies and other related matters on operation to the
General/Representative Assembly;
g.    Review, approve or amend the report and recommendation of the Ethics
Committee involving violations of the Code of Governance and Ethical Standards if
the remaining members of the Board of Directors fail to act on said report and
recommendation within a period of thirty (30) days, or the violation is committed by
the majority of the Board of Directors; and
h.    Perform such other functions as may be prescribed in the By-laws or authorized
by the General/Representative Assembly.
B.    The Election Committee

The Election committee shall be composed of at least three (3) members to be

elected during the General Assembly meeting and shall hold office for a term of one
(1) year or until their successors shall have been elected and qualified.  Within ten
(10) days from their election they shall elect from among themselves a Chairman,
Vice-Chairman and a Secretary.  No member of the Committee shall hold any other
position within the cooperative during his/her term of office.

The Election Committee shall:

a.    Formulate election rules and guidelines and recommend to the
General/Representative Assembly for approval;
b.    Recommend necessary amendments to the election rules and guidelines, in
coordination with the Board of Directors, for the General/Representatives Assembly's
approval;
c.    Implement election rules and guidelines duly approved by the
General/Representative Assembly;
d.    Supervise the conduct, manner and proceedings  of election and other election-
related activities and act on the changes thereto;
e.    Canvass and certify the results of the election;
f.    Proclaim the winning candidates;
g.    Decide election and other election-related cases except those involving the
Election Committee or its members; and
h.    Perform such other functions as prescribed in the By-laws or authorized by the
General/Representative Assembly.

C.    The Mediation and Conciliation Committee.

The mediation and Conciliation Committee shall be composed of at least three (3)
members to be appointed by the Board of directors.  Within 10 days after their
appointment, they shall elect from among themselves a Chairman, Vice-Chairman
and a Secretary who shall serve for a term of one (1) year or until their successors
have been elected and qualified. No members the Committee shall hold any other
position in the cooperative during his/her term of office.

The Mediation and Conciliation Committee shall:

a.    Conduct mediation-conciliation proceedings and services;
b.    Formulate, develop and improve the Conciliation-Mediation policies, guidelines
and program and ensure its proper implementation;
b.    Monitor Conciliation-Mediation program and processes;
c.    Submit semi-annual reports of cooperative cases to the Authority within fifteen
(15) days after the end of every semester;
d.    Accept and file Evaluation Reports;
e.    Submit recommendations for improvement to the Board of Directors;
f.    Recommend to the Board of Directors any member of the cooperative for
Conciliation-Mediation Trainings as Cooperative Conciliator-Mediator;
g.    Issue the Certificate of Non-Settlement ( CNS);
h.    Act as  conciliator-mediator during their term, provided the persons who will
mediate are mutually selected by both parties; and
i.    Perform such other functions as may be prescribed in the By-laws or authorized
by the Board of Directors.

D.    The Ethics Committee

The Ethics Committee shall be composed of at least 3 members to be appointed by

the Board of Directors.  Within ten (10) days after their appointment, they shall elect
from among themselves a Chairperson, Vice-Chairperson and a Secretary who shall
serve for a term of one (1) year or until successors shall have been appointed and
qualified.  No member of the Committee shall hold any other position in the
Cooperative during his/her term of office.  
The Ethics Committee shall:
a.    Formulate, develop, implement and monitor the Code of Governance and
Ethical Standards (CGES) to be observed by the members, officers and employees
of the cooperative subject to the approval of the Board of Directors and ratification by
the General/Representative Assembly;
b.    Conduct initial investigation or inquiry, upon receipt of a complaint involving
violations of the Code of Governance and Ethical Standards.
c.    Submit report on its recommendation together with the appropriate sanctions, to
the Board of Directors for its proper action, or to the remaining members of the
Board of Directors, if the violation is committed by any members of the Board of
Directors. Provided, that if the remaining members of the Board of Directors fail to
act on the report within a period of thirty (30) days, or the violation is committed by
the majority of the Board of Directors, the Audit committee shall act on the same;

E.    Other Committees.

Other committees that may be created shall assist in the formulation of policies and
rules and in the implementation of the service of the cooperative. Their powers,
functions, and responsibilities shall be defined in the By-laws.
F.    The Executive Committee.

The bylaws may create an executive committee to be appointed by the board of

directors with such powers and duties as may be delegated to it in the bylaws or by a
majority vote of all the members of the board of directors.

Article IX-External Auditor

At least once a year, the Board of Directors shall, in consultation with the Audit
Committee, cause the audit of the books of the cooperative by an independent
Certified Public Accountant.
    
The external auditor of the cooperative shall not at the same time provide the service
of an internal auditor to the same client.

The other non-audit work shall not be in conflict with the functions of the external
auditor.
The reason/s for resignation, dismissal or cessation from service and the date
thereof of an external auditor shall be reported in the cooperative’s annual and
current reports.

The financial audit shall be conducted by an external auditor who satisfies all the
following qualifications:

"(1) He is independent of the cooperative or any of its subsidiary that he is auditing;

and

"(2) He is a member in good standing of the Philippine Institute of Certified Public

Accountants (PICPA) and is accredited by both the Board and Accountancy and the
Authority.

The external auditor shall be changed every three- (3) years.

Article X-Annual Report

Every cooperative shall draw up regular reports of its program of activities, including
those in pursuance of their socio-civic undertakings, showing their progress and
achievements at the end of every fiscal year. The reports shall be made accessible
to its members, and copies thereof shall be furnished to all its members or record.

During the annual regular assembly meeting, the Cooperative shall submit a report
of its operation to the general assembly together with the audited financial
statements, performance audit and social audit reports.  The annual report shall be
certified by the Chairperson and Manager of the Cooperative as true and correct in
all aspects to the best of their knowledge.  The audited financial statements and
social audit reports shall be certified by CDA Accredited Independent Auditors.  
All cooperatives registered with the Authority shall be required to submit annually to
the Authority within one hundred twenty (120) days from the end of very calendar
year, the Cooperative Annual Progress Report (CAPR) with the following
attachments:
a.    Social Audit Report including its program of activities pursuant to its socio-civic
goals of the cooperative;
b.    Performance Audit Report, including copies of the semi-annual Report on
mediation and conciliation as received by the Authority pursuant to EO 97;
c.    Audited Financial Statements; and
d.    List of Officers and Trainings Undertaken /Completed.
The Cooperative Annual Progress Report (CAPR) including all of the reports shall be
made part of the Annual Report of the cooperative to its members during the Annual
General Assembly Meeting.    

Article XI-Members Benefit

          A. Rights of Members

    1. Voting Right

The members have the right to elect, remove and replace directors and vote in
certain cooperative acts in accordance with the Cooperative Code.
2.    Power of Inspection
All members shall be allowed to inspect cooperative books and records including
minutes of Board Meetings and stock registries in accordance with the Cooperative
Code and shall be furnished with annual reports, including financial statements,
without cost or restrictions.
A member has the right to examine the records kept by the cooperative during
reasonable business hours and may demand, in writing, for a copy of excerpts from
said records without charge except the cost of reproduction.
The words “reasonable business hours” mean the time during which the cooperative
office is open for the regular transaction of business.  The right may be exercised
either by the member himself or by any proper representative or attorney –in-fact
who may be an accountant or a lawyer or any person who can help the member
understand and interpret the cooperative records and either with or without the
attendance of the member.
Disallowing a member to examine and get copies of cooperative records is
punishable.  The cooperative officers who refuse without valid reason a request of a
cooperative member to examine and copy cooperative records shall be held liable to
such member for damages and shall be guilty of any offense, which shall be
punishable under Article 120, RA No. 9520
If such refusal is pursuant to a resolution or order of the board of directors, the
liability shall be imposed upon the directors who voted for such refusal except when
the member requesting the examination and copying of records will use the
information improperly or illegally and is acting on bad faith.
The privilege however is not absolute and the cooperative may show in defense that
the member is acting from wrongful motive. The exercise of the right of inspection of
cooperative books and records should be for legitimate purpose.  This means that
the intention should be germane to the interest of the member as such ,  as where 
the purpose is to find the actual financial condition of the cooperative an how its
investment is being used. Likewise, the purpose should not be contrary to the
interest of the cooperative nor it should be made to gratify a member’s curiosity or for
a speculative purpose.
A copy of any entry in any book, register or list regularly kept in the course of
business in the possession of a cooperative shall, if duly certified in accordance with
the rules of evidence, be admissible as evidence of the existence of entry and prima
facie evidence of the matters and transactions therein recorded.
No person or a cooperative in possession of the books of such cooperative shall, in
any legal proceedings to which the cooperative is not a party, be compelled to
produce any of the books of the cooperative, the contents of which can be proved
and the matters, transactions and accounts therein recorded, unless by order of a
competent court.

 
3.    Right to Information
The members shall be provided, upon request, with periodic reports which may
disclose personal and professional information about the directors and officers and
certain other matters such as their holdings of the cooperative’s shares, dealings
with the company, relationship among directors and key officers, and the aggregate
compensation of directors and officers.
The members shall have access to any and all information relating to matters for
which the management is accountable for and to those relating matters for which the
management shall include such information.
The members shall have the right to propose /call the holding of members and the
right to propose items in the agenda of the meeting, provided the items are for
legitimate business purposes.

4.    Right to Interest in Share Capital and Patronage Refund

a)    Interest in Share Capital

The net surplus less the mandated statutory reserves shall be made available to the
members in the form of interest on share capital not to exceed the normal rate of
return on investment and patronage refunds.

b)    Patronage Refund

The sum allocated for patronage refunds shall be made available at the same rate to
all patrons of the cooperative in proportion to their individual patronage, subject to
the following rules:

1.     For member-patron:

a. In the case of a member patron with paid-up share capital contribution, his
proportionate amount of patronage refund shall be paid to him unless he agrees to
credit the amount to his account as additional share capital contribution;

b. In the case of a member patron with unpaid share capital contribution, his
proportionate amount of patronage refund shall be credited to his account until his
account until his share capital contribution has been fully paid;

2.     For Non-member patron:

a.    In the case of a non-member patron, his proportionate amount of patronage
refund shall be set aside in a general fund for such patrons and shall be allocated to
individual non-member patrons only upon request and presentation of evidence of
the amount of his patronage.

b.    The amount so allocated shall be credited to such patron toward payment of the
minimum capital contribution for membership.

c.    When a sum equal to this amount has accumulated at any time within a period
specified in the bylaws, such patron shall be deemed and become a member of the
cooperative if he so agrees or requests and complies with the provisions of the
bylaws for admission to membership; and

If within any period of time specified in the bylaws, any subscriber who has not fully
paid his subscribed share capital or any non-member patron who has accumulated
the sum necessary for membership but who does not request nor agree to become a
member or fails to comply with the provisions of the bylaws for admission to
membership, the amount so accumulated or credited to their account together with
any part of the general fund for nonmember patrons shall be credited to the reserve
fund or to the education and training fund of the cooperative, at the option of the
cooperative.

5.    Appraisal Right

The members shall have the right to dissent and demand payment of the fair value of
their capital share under any of the following circumstances:

•    Amendments of Articles of Cooperation and By-laws which have the effect of
changing/restricting the rights of any member or class of shares, authorizing
preferences and extending/shortening the term of cooperative existence;

•    In case of sales, lease, exchange, transfer, mortgage, pledge or other disposition
of all or substantially all the cooperative property and assets;

•    In case of merger or consolidation.

Article XII- A Policy of Transparency

A policy of transparency must always be maintained whereby books of accounts and

minutes of Board of Director’s meetings are properly kept and made accessible to
members and regular financial statements are religiously prepared and made known
to the members and other parties interested on the cooperative’s operation
authorized by law or the Board of Directors.

Every cooperative shall have the following documents ready and accessible to its
members and representatives of the Authority for inspection during reasonable office
hours at its official address:

"(a) A copy of this Code and all other laws pertaining to cooperatives;

"(b) A copy of the regulations of the Authority;

"(c) A copy of the articles of cooperation and bylaws of the cooperative;

"(d) A register of members;

"(e) The books of the minutes of the meetings of the general assembly, board of
directors and committee;

"(f) Share books, where applicable;

"(g) Financial statement; and

"(h) Such other documents as may be prescribed by laws or the bylaws.

 
CHAPTER  II
 CODE OF CONDUCT

In the performance of their duties and responsibilities as contained in the Articles of

Cooperative and By-laws and as mandated by the laws of the Philippines, every
cooperative as well its officials, members and employees shall observe these Code
and Ethical Standards.

A.    The cooperative as a whole

Since a cooperative exists because of and for its members, it:

a.    must project a vision that rebounds to the enhancement of the quality of life of
each member;

b.    must strive at all times to become self-sustaining and self-reliant;

c.    must uphold the democratic process; and

d.    must comply with the requirements for registration including pre-membership
education conducted by a cooperative or other agencies with track record in
cooperative education.

Social Responsibility .The cooperative being a people’s organization has a heavy

social responsibility that requires it to maintain a human and nationalistic stand,
discharge its functions and render services in the most professional manner,
exercise judiciousness and sincerity to everyone, and be responsive to the needs not
only of its membership but also of the general public. Among others, it has:

a.    to provide optimum supply of quality products and services at reasonable price
or interest; and

b.    to be an active catalyst for change towards the total development of man and
potent political force in the community and in the country.

Therefore, it does not engage only in economic activities but also in advocacy for
reforms, policy directions, and local governance, thereby becoming an active partner
together with other NGO’s in seeing to it that progress is achieved and that benefits
redound to the general public. But in the conduct of all these, it must exercise
political neutrality.
        
Cooperative as a Way of Life. Since cooperativism is a way of life, the cooperative
must:

a.    build a credible image and promote a better way of living;

b.    embody the ideals of cooperativism and clearly manifest it by showing

cooperation with and support to other cooperatives by;
•    avoiding direct competition;
•    fostering “big brother helps small brother spirit” where well established
cooperatives assist smaller cooperatives grow by helping them access opportunities,
resources, and technology; and

c.    federate to promote solidarity and cooperation and strengthen their capability as
an organization and the cooperative movement.

B.    The  Primary Cooperative

a.    Principle of Membership. Membership in a cooperative must be open and

voluntary. To attract and gain more members, extension programs should be
undertaken.

b.    Interest and Welfare of Members. The cooperative must respect the interest and
promote the welfare of its members and employees by formulating a Human
Resource Development Program, and undertaking a continuous education and
training for all its members, officers, officials and employees.

C.    The  Cooperative Federation/Union

Primarily a Cooperative Union/Federation is organized in response to the problems,

needs, and concerns of the primaries. Hence it must promote their self-sufficiency,
self-reliance and well -being and therefore must not directly compete with them. It
must assist the primaries in a more progressive comprehensive and healthy manner
by providing the following services:

a.    education, through training and seminars on accounting, planning, bookkeeping

and budgeting, etc.;

b.    consultancy like preparation of project proposals and feasibility studies;

c.    management, like internal audit and on-the-job management training;

d.    marketing, like acting as a marketing arm of the primaries; and

e.    fund   sourcing,  communication, and linkaging.

In providing these services a technical group should be organized and thoroughly

trained by the Cooperative Union/Federation.

The cooperative Union/Federation must promote and maintain harmonious

cooperative and effective relationship among primaries and the cooperative
union/federation in which a policy of transparency and fairness is maintained. In
which case:

a.    it  must not be discriminating as to membership on  the basis of financial
capability.  Small cooperatives shall be allowed to become at least as associate
member contributing only a minimal membership fee;
b.    the business activities to be undertaken by the cooperative union/federation
must always be embodied in annual plans and budgets approved by the member-
cooperatives; and

c.    books  of accounts must always be maintained and made accessible to

members and financial statements and reports be regularly prepared and furnished
them.

The cooperative union/federation must take the lead in the development of micro,  
and small-scale enterprises in the community. It must therefore take the initiative to:

a.    lobby and make representations with the government to support the
cooperatives in terms of better and quality  legislation , development oriented
policies and financial/technical assistance; and

b.    establish and maintain harmonious and productive relationships with local,
national and foreign institutions for funding and other forms of assistance that will
benefit the cooperatives in the region.

Any cooperative must inhibit itself from overlapping its business with another
federation that would result into any form of destructive competition.
      
The cooperative members, officials and employees shall observe the standards of
personal conduct in the discharge and execution of their official duties.

1.    Individual Cooperative Member

a.     Standard of Personal Conduct. A cooperative member is expected, in his

dealing to:

1.    respect and observe proper decorum considering the organizational hierarchy;

2.    be  receptive to constructive criticisms by developing and maintaining emotional

maturity and stability;

3.    be  actively involved in cooperative and community affairs;

4.    refrain from giving and receiving gifts to obtain or in exchange for favor,
engaging  in activities inimical to the interest of the cooperative and using the
cooperative for personal interest.

2.    Membership Rights, Privileges and Obligations. Any cooperative member should
be a member of only one cooperative of the same type in the same area. He should
exercise his responsibilities, rights and privileges as defined in the Articles of
Cooperation and By-laws. He must therefore:

a.    a member in good standing by:

1.    attending pre-membership seminar before applying for membership;

2.    subscribing and paying at least the minimum requirement for a full-pledged
member;

3.    paying the installments on capital stock subscription as it falls due and
participate in the capital build-up of the cooperative;

4.    attending all meetings particularly the General Assembly and all continuing
educational programs of the cooperative;

5.    paying all his obligations promptly; and

6.    patronizing   regularly the services of the cooperative.

b.    Promote the purposes and objectives of the cooperative, the success of its
business, the welfare of its members and the cooperative movement as a whole by:

1.    Obeying the rules and regulations provided in the  Implementing Rules and
Regulations of R.A.No.9520, the By-laws, decisions of the General Assembly and
the Board and the policies and decisions that may be promulgated by the
Cooperative Development Authority;
2.    Showing interest and extending know-how, resources and time for cooperative
betterment; and

3.    Participating in its parliamentary affairs.

c.    Prepare himself to assume responsibilities and obligations toward the

cooperative and the community; and

d.    Believe that the cooperative is the better way to improve his life and that of his
community. He therefore has to:

1.    defend and promote the cooperative in the community;

2.    project a nationalistic and pro-people attitude;

3.    be a model member of his community and a model citizen in the community; and

4.    be willing to assist his co-members in the community.

 
3.    Board of Directors

The Board of Directors collectively and individually, in the performance of its duties
and responsibilities should take into consideration the welfare and well- being of the
general membership and its employees as well as the advancement of the
cooperative, the community and the nation in the formulation of resolutions and
policies. As such it should exercise its functions with due care and prudence like a
good father of a family and must be thoroughly knowledgeable on the management
and operation of its cooperative. Specifically, it should:
a.    adopt bold and aggressive policies that can withstand the rigors of public
scrutiny and a policy of transparency for the welfare of the general membership;
b.    seek new and better ways in making the cooperative responsive, viable and
progressive;
c.    coordinate with the committees and management to effect harmonious business
operation;
d.    to be supportive of the union’s and federation’s program and activities where his
cooperative is a member;
e.     respect the powers of the manager as duly defined in the Articles of cooperation
and By-laws of the cooperative ;
f.    must not engaged in the business which directly competes with the business of
the cooperative;
g.    must  not be an officer of the cooperative whose business is in conflict with the
line of business of the cooperative, except in secondary organizations like
Federation.

4.    Committees

In the performance of their duties and responsibilities, the Committee should:

    
a.    formulate their sound subject to the approval of the Board or course through it
for the approval of the general Assembly;
b.    prepare an annual program of activities to be approved by the Board of Directors
and to be integrated with the Cooperative’s annual plans and budget;
c.    actively pursue, specially the Committee on Education, the development of its
members, promote the understanding of the affairs of the cooperative, and foster
harmonious relationship and cooperation.

5.    Officials

The officials, treasurer, secretary, member of committees, in the performance of their

function should be honest, sincere, trustworthy, dedicated and capable

They are expected to be updated on the day to day affairs of the cooperative
movement. To be more effective in their performance, they should refrain from any
business activity which is in direct conflict with that of the cooperative and must at all
times not use the cooperative for their personal interest.

6.    Employees

The employees, who should be regular members of the cooperative or of member-

primary in the case of secondary cooperatives, must be of good moral character,
honest, dedicated and committed to the cooperative and to their task behaving as
model employees. They have to give the best possible service to the members and
officers of the cooperative. Among others, they must:

a.    observe the cooperative’s existing policies and procedures;

b.    subject themselves to management policies and should not be beholden to any
member of the board and inhibit themselves from campaigning during the
cooperative elections; and

c.    take  the initiative to develop themselves and undergo training, seminar and
other manner of education to improve their competence and perspective.

Chapter
Evaluation System

A Performance Evaluation System to measure the performance of the Board as well

as the management of the cooperative may be established with the approval of the
General Assembly.

The establishment of such evaluation system may be disclosed in the cooperatives

annual report.  

Chapter IV
Commitment

The Board and management, staff and members recognizing that the observance of
good governance and good conduct within the cooperative is a necessary
component of what constitute sound strategic business management hereby commit
to follow strictly what are provided for in this manual.

(SGD) Chairman, BOD