Management of a Co-operative Society

Two Levels of Management

Under the Act, a co-operative society is managed at two levels. The supreme (final) authority rests with all the members together — the general body — while the day-to-day management is carried on by a small elected body — the committee (also called the managing committee or, in banks, the board of directors). This is the co-operative form of democratic management: the members lay down policy and elect their representatives, and the committee runs the society within that policy and reports back to the members.

The General Body

The Act provides that the final authority of every society vests in the general body of its members. The general body decides all important matters — it elects and can remove the committee, considers and adopts the annual accounts and the audit report, declares dividend and disposes of the surplus, amends the bye-laws, admits and expels members in serious cases, and takes major policy decisions.

The general body meets in general meetings, of which the most important is the Annual General Meeting (AGM). The Act requires every society to hold its AGM within a fixed period after the close of the co-operative year (for example, the AGM is required to be held within the period laid down in the Act — commonly within a few months of the year-end). At the AGM the members consider the annual report of the committee, the audited accounts and audit report, the disposal of profit, the appointment or record of the auditor, and other prescribed business. Apart from the AGM, special general meetings may be called by the committee, or by the Registrar, or on a requisition by the required number of members. Proper notice, quorum and the recording of minutes are required for every meeting.

The Committee (Managing Committee / Board)

The management of a society vests in a committee elected by the members in the manner laid down in the Act, the Rules and the bye-laws. The committee is the executive of the society — it admits members, calls meetings, keeps the accounts, operates the bank account, sanctions loans and expenditure within its powers, appoints staff, implements the decisions of the general body, and generally conducts the business of the society. Every member of the committee is expected to act honestly and in the interest of the society; the Act makes committee members liable for loss caused by their negligence or misconduct.

Term of the Committee

Following the 97th Constitutional Amendment (discussed later), the Act now fixes the term of the elected committee at five years. The maximum number of directors on a committee is limited, and seats are reserved — including seats for women and for members from the Scheduled Castes / Scheduled Tribes / weaker sections — so that management is broad-based.

Elections …