In the summer, many electric co-ops head to their county fairgrounds, high school auditoriums or just open up their headquarters to stage their annual meeting.

For some co-ops, the annual meeting takes on a festival appearance with local musicians, perhaps a visit from the Touchstone Energy Cooperatives hot-air balloon, prize gift drawings and free food. Other co-ops use the occasion to showcase energy strategies and services. Others adopt a low-key business approach. Some co-ops use public access television or Internet video streaming to broadcast their meeting.

Whatever the format, all co-ops conduct an annual member meeting. Boardroom Spotlight editors thought this important hallmark of the cooperative model deserved a more detailed discussion, so we turned to Bob Patton, an expert in cooperative governance, a long-term educator and current consultant for NRECA and other cooperatives for a discussion.

Annual Membership Meetings: Why do we have them?

“Though typically statutory in requirements, electric cooperatives are required by their bylaws to hold a membership meeting at least annually. And some member-adopted bylaws further specify the month and place such meeting is to be held. However, to increase a cooperatives’ flexibility in scheduling annual meetings for the convenience of members, some are amending their bylaws to grant the board of directors the ability to determine the date, time, and location of the annual meeting.”

What’s the Annual Meeting all about?

“Two words define what the annual membership meeting is all about: accountability and engagement.”

“ACCOUNTABILITY: Serving in the role trustee of the members-owned business, most bylaws require that the board, or at a minimum it is the president and treasurer, annually report to the membership on the corporation’s operations, activities and financial condition. To ensure that all members are provided such a report, many cooperatives include a summary of the organization’s past year operational activities and latest audited financial report in the official meeting notice.”

“ENGAGEMENT: Member engagement is critical to the success of the cooperative model of member ownership and control. In the business sense, engagement is about members exercising their right to elect director/trustees who govern and represent their interest in the organization.”

“From their inception and up and until the early 1990s, qualified director candidates were offered up for election through either a member-nominating committee, member petitions or from nominations made from the floor of the annual meeting business session.”

“However, to enable the cooperative and its membership ample time for vetting a director nominee’s qualifications, many electric cooperative no longer allow for nominations from the floor at the annual meeting. While many cooperatives allow members to cast ballots for all properly nominated director candidates at the annual meeting, many also allow members to vote for those candidates who’ve been nominated by a mail-in-ballot, and some now allow members to vote for nominees via electronic ballots.”

Read more about electronic voting in a 2009 NRECA Legal Reporting Service article. (Though dated, this material includes relevant discussion of balloting methods.

What’s the difference between an Annual Meeting Program and Business Agenda?

“The annual meeting program generally sets forth what will take place from start to finish at the meeting site, including any scheduled meal service, entertainment, special activities, award or prize presentations, guest speakers and the agenda for the business session. During their formative years, the annual meeting program was a time of celebration of the cooperatives’ formation and progress. In more recent years, the annual meeting program often has become a forum designed allow members to vote and to educate them and the public about the cooperative’s benefits to the community at large.”

“While attending, observing and taking part in the annual meeting program is generally open to members and the public, taking part in the business session is limited to members only. The business session, in a sense, is a ‘program within a program.’ The order of business, including the consideration of past meeting minutes, order and types of reports to be presented, matters to be voted upon and/or reported, unfinished and new business is often dictated in the cooperative’s bylaws or by the board of directors.”

Are there challenges to the future of co-op Annual Meetings?

“Even though many co-ops now allow the number of members voting in advance of the meeting via mail-in or electronic ballots to count toward the required quorum for conducting business, some electric cooperatives are challenged with getting the required minimum number of members (quorum) required to conduct business.
The primary factors contributing to this challenge are member apathy, a sense that the meeting has no real personal value, and the competition for members’ time and attention to family and work, as well as member reliance upon social media for help and information.”

This poses a serious threat to the future viability of the cooperative business model because without a quorum, no business can be conducted, which also may include voting on co-op director candidates and other co-op matters.”

Findings in an article titled: “Enlightened Co-operative Governance” published in 2012 by Ernst &Young, notes that: “One of the greatest challenges to co-op board effectiveness is managing member proximity-that is ensuring regular, frequent and meaningful interaction with members. … Without such proximity, some members may no longer actively take part, or participate only minimally, in their association’s activities.”

This challenge can provide an opportunity for co-ops to retool the annual meeting into an open electronic ‘co-op town-hall-type’ of forum. This format can showcase the co-op’s democratic process and serve as a community forum for getting member and community leaders‘ feedback for how the cooperative can further meet their needs and expectations.”

“They can provide an opportunity for the cooperative to engage members in a discussion of energy policy and regulatory matters that impact their well-being, and also serve as the ‘go to forum’ to get objective information and demonstrations on the application of new viable and environmentally friendly consumer-managed, end-use energy technologies.”

ABOUT THE AUTHOR: Bob Patton was formerly the NRECA Senior Principal for Education Programs before retiring in 2010. His co-op career spans 40-plus years and he currently is a contract instructor and consultant for NRECA’s Education and Training Department and. In his former role at NRECA, he advised on content and delivery of educational programs. He also served the CEO office as a primary resource on co-op policy, member relations and management strategies. Before joining NRECA, Patton served 25 years in managerial positions at the Illinois and Ohio statewides.