Bylaws of the Breadroot Cooperative
Article 1: Identity and Organization
1.1 Name: The name of the organization shall be Breadroot Natural Foods Cooperative (henceforth “the Cooperative”)
1.2 Ownership: The Cooperative shall be owned by its Members (henceforth “Members”).
1.3. Governance: The Cooperative shall be governed by its democratically-elected Board of Directors and managed by its staff (or “staff members,” “employees”).
Article 2: Guiding Framework
The work of the Cooperative, its policies, and actions shall be guided by (a) a stated Mission, (b) recognized principles of professional ethics, and (c) international principles of cooperative economics.
2.1. Governance: The Breadroot’s Mission is to promote community involvement in the production, procurement, and distribution of natural and organic foods and other goods and services for healthy living. The Cooperative envisions a community strengthened by cooperative economics and driven by concern for the health and well-being of the planet and its inhabitants.
2.2. Ethical Principles: The Cooperative shall operate in accord with pr ofessional principles of ethics such as:
2.2.1. Nonmaleficence, or avoiding actions that cause harm; not inflicting intentional harm, and not engaging in actions that risk harming others.
2.2.2. Beneficence, or working for the good of the individual, society, animals, and planet by promoting health, well-being, and respect; the general obligation to provide mutual aid to members of society who are in need of assistance.
2.2.3. Autonomy, or fostering the right to control the direction of one’s life; allowing an individual the freedom of choice and action; autonomy, or self-determination, does not negate social or individual responsibility.
2.2.4. Veracity, or dealing truthfully and transparently with individuals with whom members, leadership, and staff come into professional contact; honesty is the principal characteristic of veracity, which rejects misrepresentation of information, withholding the truth, and lying to others legitimately involved in a contract or dispute.
2.2.5. Fidelity, or honoring commitments and keeping promises, including fulfilling one’s responsibilities of trust in professional relationships.
2.2.6. Justice, or treating individuals equitably and fostering fairness and equality; justice does not mean treating everyone the same, but treating equals equally and unequals unequally but in proportion to their relevant differences.
2.3. Cooperative Principles: The Cooperative shall operate in accord with the Definition, Values, and Principles of Cooperatives adopted by the 1995 International Cooperative Alliance (ICA) 2 General Assembly (listed below) and be guided by the 2016 ICA Guidance Notes on the Cooperative Principles.
2.3.1. Cooperative Definition: A Cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
2.3.2. Cooperative Values: Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.
2.3.3. Cooperative Principles: Cooperative Principles include the following:
2.3.3.1. Voluntary and Open Membership: Cooperatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2.3.3.2. Democratic Member Control: Cooperatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organised in a democratic manner.
2.3.3.3. Member Economic Participation
2.3.3.4. Autonomy and Independence: Cooperatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
2.3.3.5. Education, Training, and Information: Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.
2.3.3.6. Cooperation Among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
2.3.3.7. Concern for Community: Cooperatives work for the sustainable development of their communities through policies approved by their members.
Article 3: Identity and Organization
“Official policies” in these Bylaws generally refer to the body of policy, rules, and procedures contained in the Articles of Incorporation, these Bylaws, Policy Manual, Employee Handbook, decisions made by the Board, and adopted parliamentary authority.
3.1. Policy Authority Structure: The Cooperative is chiefly governed by its Articles of Incorporation, followed by these Bylaws. The Bylaws are followed by official policies, rules, and procedures contained in the Cooperative’s Policy Manual and Employee Handbook, which derive their authority from these Bylaws and decisions made by the Board. Changes in the Policy Manual shall occur by a Board vote and must not contradict these Bylaws or the Articles of Incorporation. Changes to the Employee Handbook must be approved by senior management and not contradict the Policy Manual and Bylaws.
3.2. Policy Manual: The Cooperative’s Policy Manual is comprised of policies, standing rules, and adopted procedures that regulate the Cooperative. They must (at minimum) address the Board, governance, committees, membership, senior management, finance, grievances, performance and reporting standards, and membership in ways that are effective in serving the Cooperative. The Policy Manual must be made available to all Members of the Cooperative.
3.3. Employee Handbook: The Cooperative’s Employee Handbook must contain, at minimum, policies, procedures, and rules addressing human resources, staff grievances, and the rights and responsibilities of staff. The latest version of the Employee Handbook must be made readily available to all staff of the Cooperative before or at the time of their hiring.
3.4. Interpretation and Resolution of Conflict: These Bylaws must be interpreted according to a contractarian hermeneutic, which interprets the text according to the plain, present, and public meaning of the text. In the event of an interpretive disagreement or unclear policy, the Board shall arbitrate disputes and, if necessary, seek counsel from a parliamentarian, attorney, or arbiter.
3.5. Parliamentary Authority: The American Institute of Parliamentarians Standard Code of Parliamentary Procedure (AIPSC 2nd ed. 2023) shall govern the Cooperative in all cases to which it is applicable and is not inconsistent with the Bylaws and official policies of the Cooperative.
Article 4: Membership
4.1. Eligibility: Membership in the Cooperative shall be open to any individual or legal entity who agrees to abide by the Cooperative’s Bylaws and Policy Manual, as they may be amended from time to time, and is willing to accept the responsibilities of membership.
4.2. Nondiscrimination: Membership shall be open without restriction as to race, color, national or ethnic origin, ethnicity, nationality, citizenship, religious affiliation, political ideology, sex, gender, sexual orientation, age, marital status, physical or mental disabilities, or any other such characteristic that does not directly pertain to one’s eligibility.
4.3. Admission: Any eligible individual or group, as defined in Section 4.1, may be admitted for membership upon submitting an application for membership to the Chair of the Member Engagement Committee or Board-authorized staff member on a physical or digital form approved by the Board of Directors and investing equity in an amount and on such terms as determined in the Policy Manual. No Member shall be allowed to own or have an interest in more than 10% of the capital stock of the Cooperative. If, upon submission of an application or any time thereafter, it is determined by the Committee that the applicant does not meet the eligibility requirements, as outlined in Section 4.1, the Chair of the Member Engagement 4 Committee must submit a recommendation for rejection to the Board for determination, and if passed, such a determination will be provided to the applicant in writing.
4.4. Membership: No person shall be issued or entitled to own more than one membership in the Cooperative. Only Active Members in good standing have the rights, obligations, and responsibilities as outlined in the Cooperative’s Bylaws, as they may be amended from time to time, and to policies and decisions of the Cooperative or the Board of Directors. The Cooperative shall administer two types of memberships, Individual and Associate.
4.4.1. Individual Membership: Individual membership applies to any eligible individual person and have one vote per Member. Those who reside in the household with an individual Member may receive special membership pricing at the Cooperative, but do not retain the membership rights, obligations, and responsibilities as outlined in the Cooperative’s Bylaws, and to policies and decisions of the Cooperative or the Board of Directors.
4.4.2. Associate Membership: Associate Members are reserved for firms or organizations that purchase at the Cooperative. All individual membership rights and responsibilities apply to Associate Members insofar as it is possible to apply to such groups. However, Associate Members may have two (2) votes for those with over ten (10) full-time employees, and four (4) votes for those with over one-hundred (100) full-time employees.
4.5. Member Rights: Active Members in good standing, as described in these Bylaws, have the right to (a) to receive special membership pricing or other benefits at the Cooperative; (b) vote on issues determined by membership vote and insist that the Bylaws are being followed; (c) to receive notice of and attend membership and Board meetings; (d) to access financial reports, the Board’s Policy Manual, Board meeting minutes, and other official records of the Cooperative that the Board of Directors deems a legitimate interest of the Member and not contrary to the best interests of the Cooperative; (e) elect the Cooperative’s Board of Directors and to remove a Director by a 3/5 vote at a special meeting or by an extended vote (see 5.5); (f) to veto any Board decision or official policy not required by law, prior agreement, or specific rules in these Bylaws, by a 3/5 vote; (g) to appeal membership termination; (h) to approve amendments to these Bylaws and to dissolve the Cooperative (see 11.12 and 13.3).
4.6. Member Responsibilities: Members shall keep current in equity investments due to the Cooperative, shall keep the Cooperative informed of any changes in name, address, and contact information, and shall abide by these Bylaws and the policies and decisions of the Cooperative and the Board. Members shall also patronize the Cooperative. A Member who upholds these responsibilities is considered an Active Member in good standing.
4.7. Termination of Membership: Membership shall cease by resignation, expiration, expulsion, or death.
4.7.1. Resignation: A Member may terminate their membership voluntarily at any time by written notice to the Cooperative. The resignation shall be effective upon receipt unless specified otherwise.
4.7.2. Expiration: Membership shall be revoked if membership has expired and was not renewed.
4.7.3. Expulsion: Membership may be terminated by a 2/3 vote by the Board for cause after the Member is provided fair notice of the reasons for proposed termination and has an opportunity to respond in person or in writing. Cause may include intentional or repeated violation of any provision of the Cooperative’s Bylaws or policies, actions that will impede 5 the Cooperative from accomplishing its purposes, actions or threats that adversely affect the interests of the Cooperative or its Members, willful obstruction of any lawful purpose or activity of the Cooperative, or breach of any contract with the Cooperative. Notice of a proposed expulsion shall be sent to all Directors and shall be sent by a trackable means to the member whose expulsion is being considered. The notice shall be sent within fifteen (15) days before the Board meeting is to convene. The Board may direct a Member whose expulsion is being considered to refrain from conducting business as a Member until the expulsion decision is made.
4.7.4. Death: Upon the death of a Member, membership is terminated. However, the Member’s heir can make a written request to the Board of Directors for transfer of the membership from the deceased Member to the heir within ninety (90) days of the Member’s death. Upon approval of the transfer by the Board of Directors, the heir who assumes the membership will assume all associated rights and responsibilities of the Member.
4.8. Appealing Membership Termination: Members whose membership is proposed for termination by expulsion may file a written appeal to the Board President who, if deciding that there is a legitimate case, shall appoint a three-person special Appeals Committee to review the case, conduct any further investigation, and issue its decision within fifteen (15) days after receipt of the appeal. The majority decision of the Appeals Committee shall be final. If a decision cannot be reached in fifteen (15) days, membership shall not be terminated.
4.9. Responsibilities Post-Resignation: Resignation shall not relieve the resigning member from any obligation for charges incurred, dues, assessments, or fees, and this section shall not diminish any right of the Cooperative to enforce any such obligation or obtain damages for its breach.
4.10. Return of Equity: Equity may be returned upon termination of membership in the Cooperative, under terms determined by the Board, provided that the Board has determined that the equity is no longer needed by the Cooperative.
4.11. Unclaimed or Forfeited Equity: If a Member voluntarily or involuntarily terminates membership in the Cooperative, and fails to inform the Cooperative of their mailing address, then the equity and patronage dividend amount allocated to that Member will be retained by the Cooperative or donated to a non-profit to the extent authorized by state law. If any check issued by the Cooperative to a Member for equity and/or patronage dividends is either returned to the Cooperative or not deposited or cashed by the Member within ninety (90) days of its issuance, the amounted allocated to that Member is considered forfeited.
4.12. Non-Transferability: With the exception of a Member’s heir (see 4.7.4 above), membership rights and member equity may not be transferred in any manner.
Article 5: Member Meetings and Decision-Making
5.1. Annual Meeting: An annual membership meeting (or “Annual Meeting”) shall be held each year at a time and place to be determined by the Board. The purpose of such meetings shall be to hear reports on governance, operations and finances, to review issues that vitally affect the Cooperative, announce election results, and to transact such other business as may properly come before the meeting. The Annual Meeting shall be presided by the President or the Secretary.
5.2. Special Meetings: The Board or Members may call special meetings of the membership. To be recognized as a valid meeting, the following requirements must be fulfilled: (a) a written 6 petition stating a proper purpose and signed by 10% of active Members must be submitted to the Board; (b) notice of the meeting shall be issued to Members at least seven (7) days before the meeting and within seven (7) days after presenting the petition to the Board; (c) no business shall be conducted at that special meeting except that specified in the notice of meeting; (d) all special meetings, whether organized by Members or the Board, must have at least one Board member present; for special meetings called by the Board, a Board Officer shall preside over the meeting.
5.3. Notice of Meetings: Unless otherwise stated in these Bylaws, notice of the date, time, place and purpose of each meeting of the membership shall be posted in a conspicuous place at the Cooperative, on the Coop’s website, and communicated to Members through at least two other means of communication (such as email, social media, text, postal mail, etc.) no less than seven (7) days before the meeting.
5.4. Voting: Voting on all matters shall be conducted through paper or digital/electronic ballots, or both, as authorized by the Board. Unless otherwise specified in these Bylaws, notice of the vote shall be posted in a conspicuous place at the Cooperative, on the Coop’s website, and communicated to Members through at least two other means of communication (such as email, social media, text, postal mail, etc.), not less than seven (7) days prior to the start of the election period. Unless otherwise stated in the Articles of Incorporation or these Bylaws, or required by law, all questions shall be decided by a vote of a majority of the Members voting thereon. Proxy voting is not allowed.
5.5. Extended Voting: Particular items or matters may be submitted to Members in good standing for voting by means of ballots that are distributed to the Members via electronic means or in such other manner as shall be determined by the Board of Directors. Extended voting can only be utilized for items or matters that were discussed at an Annual Meeting or at a Board meeting.
5.5.1. Extended Voting Period: The period for voting by extended voting shall be between fifteen (15) and thirty (30) days, commencing upon the date of the meeting in which the particular item or matter was discussed.
5.5.2. Extended Voting Subject Matter: The determination as to whether particular items or matters will be submitted to the Members for extended voting shall be made by the Board of Directors. In the event that the Board of Directors decides to utilize extended voting on particular items or matters, it shall include this decision in the notice of the upcoming meeting at which the particular items or matters are to be considered. The notice shall also include the deadlines and location for submitting ballots. Should the Board decline to open an extended vote on a particular matter, Members may overrule the Board decision as per 4.5 and 5.2.
5.6. Quorum: As per South Dakota law (SDC 1939, § 11.1116 as enacted by SL 1965, ch 23, § 1; SL 2000, ch 220, § 1; SL 2021, ch 194, § 4), a quorum at a member meeting of a cooperative shall be ten percent of the first one hundred members plus five percent of additional members, present or represented by delegate.
Article 6: Governance
6.1. Board of Directors: A single Board of Directors shall represent and act on behalf of the membership and Cooperative as a whole according to official policies.
6.2. Powers and Responsibilities: Except for matters for which Member voting is required or otherwise specified in these Bylaws, the Board of Directors shall have full power to govern the Cooperative and ensure that the Mission of the Cooperative is carried out.
6.3. Board Rights: The Board has rights as a whole and as individual Directors.
6.3.1. As a Whole: The Board as a whole has the right to make decisions and act within its scope of power and purpose as set forth in law and official policies of the Cooperative. Such actions may include selecting, evaluating, and compensating senior management, establishing committees, accepting new members, evaluating and reviewing Cooperative performance, approving major plans and commitments, purchasing real estate and approving major renovations, approving acquisitions, establishing affiliations and friendly relations with other organizations as appropriate, signing financial agreements and transferring funds, retaining legal counsel, employing an auditing firm, revising official policies and documents, securing new Directors, and other relevant work of governance. The Board has the right to any information about the Cooperative, whether financial, operational, or otherwise, that has not been made confidential by law.
6.3.2. As Individual Directors: As individual Members of the Board, Directors also have the right to be informed about Board meetings and activities, the right to voice complaints against other Directors according to official grievance procedures, the right to official documentation, reports, and minutes of committees, the right to resign, and any other rights determined by the Board and the Cooperative’s official policies. Furthermore, two or more Directors who agree to conduct an anonymous test vote or opinion poll on a particular proposal at meetings have the right to such a test vote or opinion poll. Test-votes and opinion polls may also take place by Presidential directive.
6.3.3. Honorary and Emeritus Officers: The Board may recognize special guests or honorary Officers for participation at Board meetings at the Board’s discretion. Such special Officers have no power, authority, rights, or responsibilities beyond ordinary Members except for their title (if applicable) and privilege of participating in Board discussions. Guests and honorary Officers have no right to propose motions, vote, or preside. Holding an honorary Office does not prevent a person who is a Member from exercising any rights or from holding regular office.
6.4. Director Limitations: Directors must abstain from activity relating to the Cooperative that extends beyond their scope of power and authority. These limitations include, but are not limited to, the following:
6.4.1. Limits to Action: Unless otherwise specified, approved, or authorized by the Board, individual Directors do not have the right to act on behalf of the Board or the Cooperative, to direct or manage individual staff, or to interfere in the affairs of committees.
6.4.2. Limits to Lending: Directors are not permitted to issue personal loans to the Cooperative.
6.4.3. Limits to Compensation: Directors may be compensated for their time and labor, but (a) the compensated Directors must abstain from voting on such decisions, (b) such 8 compensation must be independently approved by the Finance Committee in addition to the Board and (c) must not exceed the compensation of any senior management.
6.5. Board Responsibilities: The Board is responsible for determining and supporting the Cooperative’s Mission and purpose, approving and developing official policies, attending to official policies and legal responsibilities, supporting employees as a whole, setting senior management compensation levels, maintaining financial integrity, ensuring effective organizational planning, recruiting and training new Directors, monitoring the Cooperative’s performance, serving on committees as appropriate, attending regular Board meetings, and hiring at least one senior manager to act on behalf of the Board and Cooperative in carrying out its Mission.
6.6. Code of Conduct: In addition to upholding and promoting the Guiding Framework in Chapter 2, all Directors must adhere to the following Code of Conduct:
6.6.1. Good Faith: Every Director is responsible at all times for acting in good faith, in a manner which they reasonably believe to be in the best interests of the Cooperative, and with such care as an ordinarily prudent person in a like position would use under similar circumstances.
6.6.2. Confidentiality: All Directors shall maintain confidentiality as needed to protect the Cooperative’s interests and financial viability; Directors shall not discuss disputed or confidential actions, policies, or issues with the Cooperative Members, employees or the general public.
6.6.3. Conflict of Interest: Directors shall demonstrate unconflicted loyalty to the interests of the Cooperative. This loyalty supersedes any conflicting loyalty such as that to advocacy or interest groups; membership on other Boards or staffs; and personal interest as a consumer or member. Directors are not permitted to engage in self-dealing or conduct of private business or personal services between any Director and the Cooperative except as procedurally controlled to assure openness, competitive opportunity and equal access to information. When the Board determines if a Director has an unavoidable conflict of interest, that Director shall abstain from participation.
6.6.4. Executive Limitations: Directors may not attempt to exercise individual authority over the Cooperative. When interacting with senior management, employees, and committees in which they are not involved or authorized, Directors must carefully and openly recognize their lack of authority. When interacting with the public, the press, or other entities, Directors who are not the President may not speak for the Board except to repeat official, documented Board decisions; the President may speak on matters unaddressed in meeting minutes and official policies as appropriate for successful public relations, unless specifically unauthorized by the Board.
6.6.5. Support for Democratic Consensus: Directors shall support the legitimacy and authority of the Board’s decision on any matter relevant to the Cooperative, irrespective of the Director’s personal position on the issue.
6.7. Size: The Board shall be composed of seven to eleven (7-11) Directors.
Article 7: Board Elections
7.1. Elections and Terms: Elections for Director shall occur annually. Directors shall serve an initial term of two (2) years and, if elected again, shall serve a term of one (1), two (2), or three (3) years for subsequent terms. In seeking out candidates and fulfilling vacancies, the Board 9 Development Committee shall seek to stagger terms so that approximately 20 -40% of the Board is elected each year, and seek to achieve an odd number of Directors. The term of office shall begin at the adjournment of the Annual Meeting in which the election results are announced and shall end at the adjournment of the Annual Meeting in the next odd or even year. No Director may serve more than four (4) consecutive terms or ten (10) consecutive years. There is no limit to non-consecutive terms.
7.2. Vacancies on the Board: A vacancy in the position of Director shall be filled by the Board until the next annual election, and if the Board fills a vacancy which has more than one year left in the term, the Members shall elect a Director to serve for the remainder of the term. Interim Directors must fulfill the same eligibility and application requirements as any other Director (see 7.3). No vacancy shall be filled in the period commencing one-hundred and twenty (120) days prior to the Annual Meeting. If an action is taken at the Annual Meeting that will create a vacancy in the position of Director upon adjournment, the vacancy shall be filled by an extended election after that Annual Meeting.
7.3. Election Process: The nominations, credentialling, and election of new Directors are overseen by the Board Development Committee. “Applicants” approved by the Committee are considered “candidates” that shall appear on the ballot. The Board Development Committee must maintain proper independence from Board influence, maintain confidentiality with application materials, abstain from conversations with all other parties and Members about applications until candidates have been announced, and shall act in any other necessary way to ensure a fair, secure, and democratically-transparent election process.
7.3.1. General Eligibility: At minimum, Directors must (a) be Members of the Cooperative in good standing; (b) have been a Member for at least one year; (c) not have been voted off of the Board of any Cooperative; (d) not be the spouse, domestic partner, or immediate family member of any manager or of other Directors; (e) not be employed by or own shares in a local competitor to the Cooperative; (f) not have any other conflict of interest so continuing and pervasive that they are unable to effectively fulfill the responsibilities of a Director.
7.3.2. Application Requirements: In addition to General Eligibility requirements, applicants for the Board must provide the following application materials to the Board Development Committee at least sixty (60) days prior to the start of the election: (a) letter of interest, which must include explicit affirmation of the Cooperative’s Bylaws, Policy Manual, and the Board’s latest Strategic Plan; (b) at least two references; (c) a completed background check; (d) CV/resume; (e) completed conflict of interest form. Applicants that do not submit all of these completed materials are disqualified from becoming candidates.
7.3.3. Employee Eligibility: Up to three (3) employees may serve on the Board to directly represent the concerns and interests of workers. Such Directors shall abstain from voting in areas that represent an immediate conflict of interest by virtue of being staff Members, such as decisions regarding staff compensation and benefits, Board review of staff, and similar matters as determined by the Board.
7.3.4. Voting Methods and Duration: The ballot may be digital/online or physical/in-person at the primary location of business, or a combination of both. The Chair of the Board Development Committee and senior management are responsible for securing the integrity, availability, and functionality of ballot procedures. Any disputes about voting 10 methods, mechanisms, location, or other factors must be arbitrated by the Board. The profiles and relevant information of candidates (see “Ballot Content” below) must be distributed to Members at least fifteen (15) days before voting opens. Voting must begin thirty (30) or more days before the Annual Meeting and be open for at least thirty (30) days.
7.3.5. Ballot Content: The ballot must contain the names, city or county of residence, previous terms on the Cooperative’s Board (if applicable), short biography, and any other helpful information about the candidates as determined by the Board Development Committee.
7.3.6. Election: Candidates must obtain at least thirty (30) votes or 1% of the total membership to serve on the Board. In elections where candidates exceed the number of seats available, the Board Development Committee may either choose a plurality vote, preferential (Ranked-Choice/Instant Runoff) vote, or a Borda Count method to determine winners. The method of election and any relevant information about open seats, vacancies, and terms must be announced and clearly described at least fifteen (15) days before the election begins. In the case of a tie, the Board shall first recount the ballots independently of the Board Development Committee and if the results are the same, the Board (minus Board Development Committee Members) shall vote to determine the winning candidate.
7.3.7. Results: After winning, elected applicants automatically assume the status of Director at their first Board meeting on the precondition that (a) they have completed Board Orientation (see 7.3.7) and (b) no new evidence that would contradict their eligibility has been found in the period from their election to their first Board meeting. 7.3.8. Board Orientation and Training. Prior to attending their first Board meeting, new Directors must attend at least four (4) hours of Board Orientation jointly provided by the Board Development Committee and the Board President. The Orientation must include a review of (a) these Bylaws, (b) the Cooperative’s history, Mission, and Guiding Framework, (c) the Cooperative’s Policy Manual, and (d) the latest Strategic Plan. The Orientation must also include training on basic parliamentary procedure, digital or physical copies of the most recent Financial Report and Board meeting minutes, and any important legal disclosures, notices, contracts, or financial statements that may be relevant to the Board’s governance. Directors who are re-elected do not have to attend Orientation unless it has been longer than four (4) years since their last orientation. The Board Development Committee must also orient individual Officers for their specific roles prior to their first Board meeting as Officers (see 9.1).
7.4. Termination: The term of Directors is terminated by completion, resignation, absence, expulsion, or death.
7.4.1. Completion: The term of a Director automatically terminates when fulfilled. Directors must re-apply for any additional terms according to the policies and procedures in 7.3.
7.4.2. Resignation: A Director may terminate their term voluntarily at any time by written notice to the Board. The resignation shall be effective upon receipt unless specified otherwise in the notice.
7.4.3. Absence: Directors that are absent for more than 25% of Board meetings in any given twelve (12) month period are automatically expelled from the Board. 11
7.4.4. Expulsion: A Director may be expelled by a 2/3 vote of the remaining Directors or by a 3/5 majority of the membership for repeated violation of any provision of the Cooperative’s Bylaws or policies, actions that will impede the Cooperative from accomplishing its purposes, actions or threats that adversely affect the interests of the Cooperative or its Members, willful obstruction of any lawful purpose or activity of the Cooperative, or breach of any contract with the Cooperative. Notice of a proposed expulsion shall be sent to all Directors and shall be sent by a trackable means to the Director whose expulsion is being considered. The notice shall be sent no more than fifteen (15) days before the meeting. The Board also has the right to suspend the Director whose termination is pending until a decision is reached.
7.4.5. Death: A Director’s death automatically terminates their term.
7.4.6. Appealing Director Termination: While pending termination for absence or expulsion, the Director may file a written appeal to the Board President who, if deciding that there is a legitimate case, may appoint a three-person special Appeals Committee to review the case, conduct any further investigation, and issue its decision within fifteen (15) days after receipt of the appeal. The majority decision of the Appeals Committee shall be final. If a decision cannot be reached in fifteen (15) days, the appeal is automatically invalidated.
Article 8: Board Meetings
The Board shall hold regular and special meetings at such time and place as it shall determine. The Board will provide reasonable notice of all Board meetings to Members. Attendance at any meeting constitutes waiver of notice of that meeting.
8.1. Regular Meetings: The Board shall meet at least four (4) times per year. These regular meetings shall have at least thirty (30) days notice. One of the regular Board meetings shall be held within fifteen (15) days following the close of the Annual Meeting.
8.2. Special Meetings: Special meetings of the Board may be called by the President or Secretary on the request of any majority of Directors. Seven (7) days notice shall be required, unless the Board agrees to meet earlier by a 2/3 vote of all Directors. Notice may be waived by any Director before, during, or after the meeting.
8.3. Action Without a Meeting: Any action required or permitted to be taken at a meeting of the Board may be taken by written action approved by 2/3 of the Directors. The action is effective when approved, unless a different effective time is provided in the action.
8.4. Membership Participation: Meetings shall be open to all Members unless the Board decides to go into executive session regarding confidential or proprietary matters such as labor relations or personnel issues, disciplinary hearings, foreclosure, disability requests, mental illness, negotiation of a contract, discussion of strategic goals or business plans, the disclosure of which would adversely impact the Cooperative’s position in the marketplace, and/or discussion of a matter that may, by law or contract, be considered confidential.
8.5. Method of Meeting: Meetings of the Board may be held in-person, telephonically, or electronically/online. Any meeting shall provide for communication among all Directors synchronously and, excepting executive sessions, shall provide for attendance (but not participation) by any Member of the Cooperative. Anonymous votes conducted digitally/electronically shall be deemed to be a ballot vote, fulfilling any requirement in these Bylaws and other official policies that a vote may be conducted by ballot. 12
8.6. Order of Business: The President must submit the written Order of Business, with specific agenda items as appropriate, to Directors and senior management at least six (6) days prior to each Board meeting.
8.7. Meeting Minutes and Action Log: The Secretary must record Board meeting minutes on a standardized template and make them available for access to the Board no later than three (3) days after the meeting and must be approved by the Board within twelve (12) days after the meeting. The numerical outcome of votes (including abstentions) must be recorded. The final decision(s) of any executive session(s) must be reflected in the Board meeting minutes. Minutes of an executive session should be distributed only to those who participated in the session. In the absence of a Secretary or for other reasons, the President may, with approval of the Board, appoint another person to take minutes and perform other secretarial responsibilities on the Secretary’s behalf. The Secretary shall also maintain a searchable Action Log of substantive Board decisions and resolutions for reference purposes.
8.8. Quorum: 3/5 of the current Directors shall constitute a quorum and no decisions shall be made without a quorum.
Article 9: Officers
The Board shall have four (4) Officers: a President, Vice President, Treasurer, and Secretary. Each Officer may have other additional responsibilities and powers than those listed below as are set forth in the Policy Manual. Directors may only occupy one office at a time except for temporary and exceptional circumstances as determined by the Board. Officers are nominated and elected at the Board meeting following the Annual Meeting, and then shall be trained for their specific office by the Board Development Committee prior to the next Board meeting. The first term of any Officer is one (1) year, followed by either a one (1) year term or a two (2) year term.
9.1. President: The President shall (a) represent the Board and Cooperative at large to the public and to staff; (b) act as the legal representative of the Cooperative alongside the Secretary, signing contracts, correspondence, and agreements as necessary; (c) preside at Board meetings (or designate a presiding officer); (d) co-develop the Order of Business for each meeting with senior management and any other relevant parties as necessary; (e) Chair the Executive Committee; and (f) serve on the Finance Committee. To be eligible for office, the President must have previously served at least one (1) year on the Board of Directors sometime in the past.
9.2. Vice President: The Vice President shall (a) assume the role of President in the event of an unfulfilled Presidential term or when the President is absent from meetings and (b) serve on the Strategic Planning and Effectiveness Committee.
9.3. Treasurer: The Treasurer shall (b) oversee the financial status and accounts of the Cooperative and (b) chair the Finance Committee.
9.4. Secretary: The Secretary shall (a) oversee the maintenance of records other than financial records, including contracts, membership information, awards and certifications, correspondence, minutes, an Action Log of substantive Board decisions, notices, and legal documents on either a secure cloud drive or a local server; (b) provide any necessary documentation and procedural guidance to facilitate effective Board meetings. The Secretary, President, and any authorized staff member shall retain control of and access to such filings and archives whether depositories are in-store or subcontracted to a third-party provider.
Article 10: Committees
The Board shall establish and authorize Standing Committees and Special Committees to divide up the labor of Board governance as necessary.
10.1. Requirements: All Committees must (a) have an official, written, Board-approved charter that establishes the committee’s approval date, type (Standing or Special), composition, meeting requirements, purpose (matters of deliberation, action, or both), responsibilities, current members and terms, pre-authorizations and budget, and any policies, rules, and procedures; (b) presided by a chair, who is a Member in good standing and acts on behalf of the Committee in relation to the Board; (c) meet as needed, no less than four times per year in the case of Standing Committees, and as often as necessary for Special Committees; (d) record meeting minutes and provide oral or written reports, along with specific recommendations as needed, to the Board. Committee charters must be updated annually and submitted to the Secretary each year for storage and publication in the Policy Manual. Unless otherwise stated in these Bylaws, charter amendments must be approved by the Board.
10.2. Evaluation: All committees are subject to annual evaluation by the Strategic Planning and Effectiveness Committee, the results of which must be submitted to the Board for review. In considering survey results, the Board may wish to elect a new chair, revise the committee charter, or take other actions as necessary to ensure effective committees.
10.3. Committee Size: Committees shall have three to nine (3-9) Members.
10.4. Eligibility: Any Member in good standing may serve on a committee unless otherwise stated in these Bylaws.
10.5. Election and Appointment: For committees that do not require a specific Officer as chair, the Board shall nominate and choose chairs for such committees either at the Annual Meeting or at a Board meeting, followed by nominations for participants of the committee by either the President and/or the committee chair. Non-chair members of a committee may be appointed by the President without a Board vote.
10.6. Terms: As with Officers, the first term of any committee chair or member is one (1) year, followed by either a one (1) tern or a two (2) year term. Committee chairs may not serve more than ten (10) consecutive years. So long as the Board is informed of member changes, new committee members may be added to an existing committee at any time on a rolling basis by appointment by the chair, President, or by a vote of the committee itself.
10.7. Member Participation: All Standing Committees, with the exception of the Executive Committee, are encouraged to have multiple staff and Members at large (that is, Members who are not Directors). The Finance, Board Development, and Member Engagement Committee are required to have no less than one staff member on each committee, appointed by either the Board President or senior management.. Staff members may include time at committee meetings as part of their normal, compensated working hours.
10.8. Voting Rights: All members in a committee have one vote in making decisions within the committee.
10.9. Recommendations and Records of Votes: Any committee recommendation to the Board that involved a committee vote, as well as any Committee actions recorded in Committee minutes, must include the numerical vote results in the Chair’s report to the Board. Other requirements for committees and reports shall default to the procedures in AIPSC. 10.10. Chair Limits. Directors may not chair (preside over) more than three (3) committees simultaneously and not more than two (2) Standing Committees simultaneously. 14 10.11. Standing Committees. Five (5) Standing Committees shall be established with the following purpose and minimum responsibilities; the Board may choose to add responsibilities to Committees as needed.
10.11.1. Executive Committee: The purpose of the Executive Committee is to act on behalf of the Board between Board meetings or in urgent situations as necessary. The Executive Committee shall have all powers of the Board when the Board is not in session, except in respect to (a) powers reserved by the Board to itself; (b) compensation and distribution of proceeds; (c) election of Officers; (d) filling Board vacancies; and (e) amendments to the Bylaws or Articles of Incorporation. The Executive Committee is comprised of all the Board Officers. All Committee members are required for a meeting quorum and a 2/3 majority is required for any action or decision.
10.11.2. Finance Committee: The purpose of the Finance Committee is to monitor the Cooperative’s financial condition and ensure its stability, progress, and integrity. Its general responsibility is to (a) monitor financial accounts, (b) review major financial statements, reports, tax documents, budgets, benefits, and managerial pay scales as necessary, and (c) propose patronage payout, investment, and/or other financial decisions before the Board as necessary. It shall be chaired by the Treasurer and include relevant staff, such as senior management, accountants and bookkeepers, and any others as appropriate.
10.11.3. Board Development Committee: The purpose of the Board Development Committee is to ensure a qualified and functional Board. Its responsibility is to (a) identify and recruit qualified Directors; (b) oversee the Board Member application and election process; (c) ensure proper training for new Directors and Officers and continuing education for current Directors; and (d) conduct a Board skills audit at least once every two (2) years on behalf of the Strategic Planning and Effectiveness Committee. Any past, current, or future President is not allowed to serve on or preside over the Board Development Committee, and senior management is not allowed to preside on the Committee.
10.11.4. Member Engagement Committee: The purpose of the Member Engagement Committee is to ensure healthy involvement of Members in the Cooperative and build positive relationships between Members, the Board, and staff. Its responsibility is to (a) develop a plan for increasing engagement, including mediums and strategies for effective communication with Members; (b) identify and recruit Members to serve on Board Committees and provide other opportunities for interaction between Members, the Board, and staff; (c) increase participation in elections/voting; (d) oversee member application. It shall be chaired by any Board member or qualified manager.
10.11.5. Strategic Planning and Effectiveness Committee: The purpose of the Strategic Planning and Effectiveness Committee is to develop long term plans for the Cooperative and ensure compliance and internal effectiveness of the Cooperative in fulfilling its Mission. Its responsibility is to (a) develop and regularly update a 5-year Strategic Plan for the Cooperative; (b) develop a succession plan for senior management with the current senior management and members of the Committee; (c) develop and carry out a Self-Assessment plan that evaluates the Cooperative, including the Board itself, committees, and senior management through various surveys, reviews, or assessment instruments, and 15 make recommendations to the Board for improvement ; (d) co-develop an educational program with the Member-Engagement Committee Chair in accordance with the fourth Cooperative Principle; and (e) review and recommend changes to official policies as necessary. It shall be chaired by a Board member.
10.12. Special Committees: Special Committees and their chairs are established by a Board vote and exist for either deliberation (making a decision or conducting an investigation) or for action (carrying out a particular task that has already been determined by the Board) or both. Special committees are automatically terminated upon submission of their final report or upon finishing their assigned task(s).
Article 11: Financial Policies
11.1. Member-Owner Consent: By obtaining or retaining membership in the Cooperative, each Member consents to take into account, in the manner and to the extent required by federal and state tax law, any patronage dividend received from the Cooperative. Each Member also agrees that if their patronage dividend is not cashed within ninety (90) days of the date on which it was issued by the Cooperative, the Cooperative shall have the right to make a contribution in the name of that Member to support other organizations aligned with the Cooperative’s purpose in a manner as may be directed by the Board from time to time.
11.2. Capital Reserve and Allocation to Members: The Board of Directors shall establish a reasonable capital reserve for necessary purposes of the Cooperative. Any of the net proceeds may be credited to allocated or unallocated reserves, and shall be credited to Members in accordance with the ratio which their patronage bears to total patronage.
11.3. Non-Patronage Loss: If the Cooperative incurs a net loss on its non-patronage business, such net loss generally shall be chargeable against the capital reserve unless and to the extent the Board of Directors, having due consideration for the circumstances giving rise to such net loss, determines that it is reasonable and equitable to allocate all or part of such a net loss against the Cooperative’s current or future net income from patronage business.
11.4. Capital Stock and Redemption: The number and cost of shares shall be determined by the Board and recorded in the Policy Manual. At its discretion, the Board of Directors may authorize redemption of stock upon request.
11.5. Financial Access: The Treasurer, President, and any senior manager or other staff member authorized by the Board may have direct access to the Cooperative’s financial accounts.
11.6. Budget, Review, and Audit: Senior management members of the Finance Committee are responsible for drafting annual and quarterly budgets in consultation with the Treasurer, which shall be approved by the Committee by vote and then submitted to the Board for final approval at least thirty (30) days prior to the start of the fiscal year. Such members are also responsible for ensuring that the Cooperative obtains an independent third-party financial audit at least once every six (6) years and at least one (1) third-party financial review in the periods before and after each audit, which shall be submitted to the Finance Committee for review as appropriate.
11.7. Pay Ratios and Bonus Limitations: No compensated Member of the Cooperative shall (a) be paid more than five times (5x) the lowest-paid full-time staff member, (b) paid more than three times (3x) the average-paid full-time staff member, or (c) be rewarded bonuses twice (2x) the bonus amount of the next bonus-earning staff member (if applicable). Any bonus structures 16 shall be developed by the Finance Committee and approved by the Board. All bonuses rewarded to senior management must be determined on the basis of (a) financial ability as determined by the Finance Committee, and on the basis of (b) evaluations, data, and review by the Strategic Planning and Effectiveness Committee that address the competence and performance of management.
11.8. Banking: Whenever possible, the Cooperative shall hold and operate its accounts with local credit unions and/or Cooperative banks (see ICA Cooperative Principle 6).
11.9. Personal Loans: Members are not permitted to issue personal loans to the Cooperative without a 2/3 vote of the Board. In the event of such a personal loan, (a) the lender may not be a Director or member the Finance Committee, (b) loan interest may not exceed 5% annually, and (c) the Board must repay the loan and any interest to the lender as soon as sufficient capital reserves are available.
11.10. Education Fund: At least point five percent (0.5%) of the net proceeds shall be allocated to fulfill the fifth Cooperative principle of providing “education and training for their Members, elected representatives, managers and employees so they can contribute effectively to the development of their Cooperative. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation” (ICA 1995). These educational programs must be co-led by the chair of the Member Engagement Committee and chair of the Strategic Planning and Effectiveness Committee in conjunction with other relevant staff and/or committees.
11.11. Unbudgeted Capital Expenditures: Unbudgeted capital expenditures over point one percent (0.1%) of the previous year’s gross annual revenue must be approved by the Finance Committee.
11.12. Dissolution and Liquidation: The Cooperative may be dissolved or liquidated upon either a 2/3 decision of the Board or a 3/5 vote of the Members. Upon dissolution of the Cooperative, its assets shall be distributed in the following manner and order: (a) by paying or making provision for payment of all liabilities and expenses of liquidation; (b) by redeeming any equity accounts which, if they cannot be paid in full, shall be paid on a pro rata basis; (c) by distributing any remaining assets in a way that furthers the Cooperative’s Mission, as determined by the Board.
Article 12: Limits to Liability
12.1. Non-liability for Debts of the Cooperative: The private property of the Members shall be exempt from execution or other liability for the debts of the Cooperative and no Member shall be liable or responsible for any debts or liabilities of the Cooperative.
12.2. Indemnification: The Cooperative shall have the power to indemnify its Officers, Directors, Members, employees, and agents to the fullest extent permitted by law. Such indemnification shall be made only if it is determined by the Board of Directors that the Director acted in good faith in the reasonable belief that the Director’s action was in the best interests of the Cooperative, or as otherwise allowed by law. Additionally, the Cooperative shall not indemnify and/or reimburse a Director if the claim or liability is the result of the Director’s own intentional actions, gross negligence, or fraud.
Article 13: Severability and Amendments
13.1. Severability: If any section, clause, provision, or portion of these Bylaws is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of these Bylaws shall not be affected thereby.
13.2. Amendments to Standing Rules and Adopted Procedures: Policies, procedures, and rules in the Employee Handbook may be amended at the discretion of the senior management who shall inform the Board of any such substantive changes. Policies, procedures, and rules in the Policy Manual may be added or amended by a 2/3 vote of the Board.
13.3. Amendments to Bylaws: These Bylaws may be changed by either a Minor Amendment or Substantial Revision. Both require a 2/3 majority vote of the Board, while the latter requires an additional vote of the Membership.
13.3.1. Minor Amendments: Minor Amendments (specific textual additions, deletions, or replacements) may be achieved by a 2/3 vote of the Board. Such amendments must (a) involve changes on only one subject area throughout the Bylaws or in only one particular paragraph; (b) not alter the rights and responsibilities of Members, or immediately affect all Members of the Cooperative; (c) not give more power or authority to the Board or to any particular Officer, Member, or Staff; (d) not address matters of compensation; (e) not alter any voting or democratic procedure, rule, or requirement, including Bylaws amendments.
13.3.2. Substantial Revision: Any changes greater than those stated above, including proposing an entirely new revision or draft, must be approved by a 2/3 vote of the Board and a 3/5 vote of the Members. Such revisions shall be (a) overseen by a special committee and (b) publicized to the membership not less than 30 days prior to the voting process, which shall be held at a time and in a manner determined by the Board.
13.3.3. Amendment Disputes: Any disputes about what changes constitute a Minor Amendment or Substantial Revision shall be resolved by a 3/5 vote of a special Amendment Committee comprised of those in the Strategic Planning and Effectiveness Committee and five Members at large who are chosen at random/by lottery.