Cooperative governance

With about 21,670 cooperatives registered under RA 9520, (as of June, 2012), doing credit, consumers, multi-purpose, services and marketing, the Cooperatives Development Authority is doing its best to supervise and provide guidance to the cooperative sector. It needs though a total review of its operational guidance if they wish to see improvement in the governance aspect of cooperative pperations.

Wikipedia defines Governance for non-profit organizations like cooperatives as - ''consistent management, cohesive policies, guidance, processes and decision-rights for a given area of responsibility. ''

It simply refers to how elected and appointed officials of cooperatives execute the role, rights and obligations as dictated by RA 9520 - The New Cooperatives Act.

RA 9520 codified and merged several Cooperative Laws including PD. 175, and RA 6938. After existing for more than 5 years, many believe that an indepth review of certain provisions is in order.

Take a look for instance at the principle of cooperation at all levels. Under the law, groupings that were existing under RA 6938 were accommodated. Primaries were encouraged to form unions (those that provide non-business services) and federations (those providing businesses services). A primary can therefore have dual affiliation. This means also that they are duty bound to support financially these tertiary groupings through membership dues and remittance of the portion of their Cooperative Education and Training Fund (CEFT).

In addition, to the secondary and tertiary affiliations, a primary can also join national groups of their particular industry or sector as these ''national groups'' were already existing prior to the enactment of RA 9520. With this scenario, a primary could have more than two affiliation.

Decades ago, a simple yet effective structure exists for the sector. There were no federations yet, just primaries and unions and an apex organization. CETF was not an issue. Services were efficiently being delivered. Today, it seems that a lot of groups are organized and everyone has to talk to the CDA about their own agenda. It is not surprising anymore to see more tertiary and national groups are being formed to represent their particular interest. Workers coops, government hospital workers, OFW groups are now in a huddle to form their own interest group.

Where is the flaw? Under the law ( see Art. 28 No. 2 ) ''Cooperatives may , (underscore may), remit one half of their Cooperative Education and Training fund (CETF) to the Union or Federations of which he is affiliated with'' therefore it is not surprising to see instances where primaries or secondaries do not remit the portion due to their secondary or tertiary because they hide behind the ''may'' provisions.

Another issue affecting cooperative governance is in the following article -

''ART. 45. Liability of Directors, Officers and Committee Members. - ''Directors, officers and committee members, who are willfully and knowingly vote for or assent to patently unlawful acts or who are guilty of gross negligence or bad faith in directing the affairs of the cooperative or acquire any personal or pecuniary interest in conflict with their duty as such directors, officers or committee members shall be liable jointly and severally for all damages or profits resulting therefrom to the cooperative, members, and other persons.''

Up to this point in time, popularity is still the name of the game. You can still find the general assemblies of primaries or secondaries, repeatedly electing people to hold responsible positions who have not done much or showed commitment to his position.

Third issue is the training and development of cooperative officers. While every primary were given two years to complete these required training courses, the CDA have limited their accreditation of trainors to leaders and members with practical cooperative involvement. However, a partial list of the kind of training being required such as Internal Control, Strategic Planning, Financial Management, Audit, Mediation, Parliamentary procedures shows such diverse topics on the training needs. The question is: Can the seasoned accredited members be in a position to handle and provide such training requirements? Why not consider accrediting academic institutions (UP, DLSU, UAP or PUP), professional groups like FINEX and PICPA or PAMA, or even private training practitioners to provide such training requirements?

It's a tall order for the Cooperatives Development Authority. They have done a lot in terms of issuances of guidelines , implementing reportorial requirements and promotions of new coops but leaving these areas of concern unanswered remains a big stumbling block towards making cooperatives to be self-funded, self-managed and self-responsible.

If we wish to have stronger cooperatives, let us think of employing professional managers, develop more stringent requirements to qualify to run for any office and most of all use all the reportorial requirements to see how each one comply and progress in their management.

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