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Directors and officers

Payment and loans

For directors

A director should not receive any payment for their services. The exceptions to this are:

  • fees, concessions and other benefits approved at a general meeting
  • a loan or benefit scheme for a director or their associate approved at a general meeting
  • the same type of loan or benefit scheme that any member of the general public can access.

The board must approve a loan or benefit scheme by a two-third majority.

For other officers

All other officers can get loans or benefits from the cooperative, but only if the board approves them. This only needs to be by a simple majority (more than half of board members). Some cooperatives may create a scheme for this, but the board must still approve it.

This rule also applies to a proprietary company or trust for which the officer is a shareholder, director, trustee or beneficiary.

Financial and other interests

You may need to enter into contracts with outside organisations. A director must declare if they have a conflict of interest before you enter into a contract. They might also be involved with the other organisation. For example, if they held a part ownership of a company that supplied parts to you.

They must notify the board about:

  • any direct or indirect interest
  • the nature and extent of this interest.

The director must notify the board:

  • by writing a statement that they have an interest—financial or otherwise—in the contract
  • in person at the first board meeting to discuss the contract.

A director who develops an interest after this point should advise the board at their next meeting. For instance, they may have bought shares in that company.

Exceptions

They don’t have to declare an interest in contracts if:

  • they are buying goods and services from the cooperative
  • they are selling agricultural products or livestock to the cooperative
  • the cooperative is leasing land to the director
  • your rules permit this type of interest.

Management contracts

A management contract is when you appoint someone else to manage your business. This could be:

  • signing a contract
  • making any other type of arrangement.

You must hold a special resolution to approve this contract. Otherwise, it becomes void.