CEO’s Message – September 2019
Democratic Member Control and the Board’s Review of Co-op Bylaws
One of the things that makes rural electric cooperatives like Stearns Electric Association unique is the second of seven cooperative principles: Democratic Member Control. Here is the definition:
Cooperatives are democratic organizations controlled by their members through the election of peers to serve on the board of directors. Each member has equal voting rights (one member, one vote.) The board of directors is actively involved in setting policies, including rates and strategic planning decisions, and is accountable to the cooperative membership.
This local democracy principle for Minnesota Rural Electric Cooperatives is established by Minnesota Statute Chapter 308A. The statute confirms the local decision making that has been part of rural electric cooperatives for decades.
Unlike investor-owned utilities, electric cooperatives answer to their membership, not company shareholders. Stearns Electric members entrust their elected directors to make local cooperative decisions such as services provided, electric rates and co-op strategies. Local governance allows the Stearns Electric Board of Directors to make decisions to best serve the unique needs of our membership.
One of the duties of your Stearns Electric Board of Directors is to conduct a periodic review of Stearns Electric’s articles of incorporation and bylaws. The articles of incorporation is the founding legal document that provides a framework for the establishment of the Cooperative and filed with the Minnesota Secretary of State. The bylaws are the set of rules and procedures for operating Stearns Electric. Our bylaws must be consistent with our articles of incorporation.
Currently your Stearns Electric Board of Directors is conducting a review of the Cooperative’s bylaws. A committee of board members, along with your Stearns Electric staff and attorney, are reviewing the bylaws line by line. Once suggested changes are identified by the board committee, the full Stearns Electric Board of Directors will review and approve recommended changes to the bylaws. We anticipate the bylaw review will be completed by year-end 2019.
Ultimately, bylaw updates will be presented to you, the members of our Cooperative, for approval at the 2020 Stearns Electric Annual Meeting. Recommendations for the bylaw review will cover out-of-date language, changes in associated laws, the adoption of new technology, changing demographics and adjustments to recommended co-op business practices.
Regular review of the Stearns Electric articles of incorporation and bylaws is necessary. Having updated articles and bylaws will allow the Stearns Electric Board of Directors and employees to more effectively manage your Cooperative. Something we can be sure of now, and in the future, is that things will change!