M1: Learner Manual

The Board of directors is responsible for managing the affairs of the co-operative in accordance with the legislation and the co-operative’s rules.

The directors of smaller co-operatives are likely to have direct involvement in all aspects of the business. The directors of large co-operatives will often have a more administrative role.

The role of directors includes:

• planning long-term business and financial strategies
• determining and implementing policies
• assessing business and financial performance
• ensuring the co-operative complies with its statutory reporting and other obligations under the Co-operative National Law (CNL)
• ensuring the co-operative operates in accordance with its rules

Duties of directors and officers

The directors and officers of a co-operative have obligations and duties under the CNL and general law. These include:

• acting in good faith - must act honestly and in the best interests of the co-operative and for a proper purpose
• acting with care and diligence - directors need to keep adequately informed of the financial status and business performance of the co-operative and obtain professional advice if necessary
• not misusing position or information - directors must not improperly use their position and information to gain an advantage for themselves or someone else or to cause harm to the co-operative
• avoiding conflicts of interest - any conflict must be declared and dealt with in accordance with the CNL
• preventing insolvent trading - directors must prevent the co-operative incurring a debt whilst it is insolvent or if it will become insolvent as a result of incurring the debt.