1.

CONTEXT OF STUDY

With the advent of the new economic regime, governments seem prepared to withdraw from the co-operatives

and turning them over to their members. The onus of facilitating this change is on the governance structure of

these cooperatives. With potential threat from the multinational and big corporate players, the Dairy

Cooperatives have to gear up their governance system and make it even more responsive to the stakeholders’

needs in order to retain their allegiance. Democratic ideas and practices have been central to thinking about the

governance of Dairy Cooperatives. Key ideas and practices include: open election on the basis of one-person

one-vote; pluralism i.e. the representatives will represent interest of different communities of members;

accountability of the electorate; the separation of elected members who make policy from the executive who

implement policy decisions. Central to the democratic view of cooperatives is the idea of a lay or non-

professional Board, where any member can put himself or herself forward for election as a Board member. But,

more than the personal qualifications or technical expertise of the individual Board members, it is the quality of

democratic process that determines the quality of the output of the governance system. The democratic process

must ensure that the key components of governance namely accountability, participation, transparency, integrity

and responsiveness are upheld inviolate.

All systems have their limitations and the democratic system of the governance of Dairy Cooperatives is no

exception. In the absence of active participation and involvement of the basic stakeholders, it is susceptible to

exploitation by its members for their own advantage and vested motives. Furthermore, from the Indian

experience till now, cooperatives as a whole have not been able to prove their economic viability. Poor

governance has been cited as one of the predominant reasons for the same. Hence, a study of the governance

system of Dairy Cooperatives is pertinent for ascertaining its limitations and making an effort to compensate for

these through proper checks and balances.

2. OBJECTIVES

 To understand the democratic practices and systems in the governance of Dairy Cooperatives

 To study the present governance system of Milk Union Ropar and suggest measures to strengthen it

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3. SCOPE OF STUDY

The study was restricted to Milk Union Ropar. Some data was also collected from Milk Union Gurdaspur

4. METHODOLOGY

Methodology adopted for data collection in this study was as follows:

4.1 QUESTIONNAIRE SURVEY

A questionnaire survey of the elected members of the Board of Directors of Milk Union Ropar was undertaken.

The questionnaire aimed at evaluation of the performance of the Board by its elected members along the

following five dimensions:

 Membership Linkage and Accountability

 Board Policies

 Board – Management Relations

 Planning and Financial Overview

 Board Awareness and Leadership

A copy of the questionnaire is enclosed as Annexure I

Sample size: Since the scope of the study was restricted to Milk Union Ropar, the population frame comprised

of its eleven elected Directors. From this population frame, a sample of seven directors was chosen through

convenience sampling. Out of these seven directors chosen, two directors were not able to respond to the

questionnaire due to paucity of time. H

4.2 SEMI-STRUCTURED INTERVIEWS

Semi-structured interviews were conducted with the above-mentioned seven Board members. A checklist was

prepared for the same covering the basic issues given below:

 Term of the Board

 Electoral improvements comprising zoning, amendment of eligibility criteria etc

 Parameters for evaluation of the performance of the Board

2
  Incentives and powers required by the Board to take up accountability for Union’s performance

o Financial compensation like salary etc. for greater commitment

A copy of the checklist is enclosed as annexure II

4.3 OBSERVATION METHOD

Observations were gathered by attending a Board meeting at Milk Union Gurdaspur. The learning drawn from

the Board meeting was experiential in nature and is manifest in some sections of this report.

4.4 INFORMATION FROM SECONDARY SOURCES

Information was collected from secondary sources such as the Punjab Cooperative Societies Act 1961, Byelaws

of Milk Union Ropar, Model Cooperative Societies Bill 2000 etc.

5. LITERATURE-BASED CONCEPTUAL UNDERSTANDING

To put it in the simplest words, governance means the way those with power use that power.

Since the objective of the study is to understand the governance system of dairy cooperatives, it would be

more relevant to comprehend governance from the perspective of business organisations.

Moving onto a formal and a more elaborate definition of Corporate governance given by OECD in April

1999, “Corporate governance is the system by which business corporations are directed and controlled. The

corporate governance structure specifies the distribution of rights and responsibilities among different

participants in the corporation, such as, the Board, managers, shareholders and other stakeholders, and spells out

the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure

through which the company objectives are set; and the means of attaining those objectives and monitoring

performance”.

"Corporate governance is about promoting corporate fairness, transparency and accountability" J.D.

Wolfenson, president of the World Bank, as quoted by an article in Financial Times, June 21, 1999.

3
 A definition of a cooperative in economic terms states “ a cooperative is a business which is owned and

democratically controlled by its members for the purpose of providing goods and services to members and

patrons. Cooperative ownership influences purpose, control structure and business practices, and makes

cooperatives significantly different from sole proprietorships, partnerships and investor-owned corporations.”

Through cooperative governance, the Board focuses its key purpose: to ensure the cooperative’s prosperity by

collectively directing its affairs and meeting the legitimate interests of member-owners and other interested

parties. It must account to its member-owners for its record in this regard. A cooperative, like any other

business, is responsible primarily to its owners, but not to the owners alone. Cooperatives are responsible as

well to the community, the environment and other aspects of the public.

Cooperative governance differs significantly from investor-oriented firms:

the cooperative Board is comprised primarily of members, individuals who typically use the business and

derive economic benefits from that use (patronage)

cooperative directors are very much accessible to member-owners

cooperative directors focus much of their attention on the individual cooperative Board affairs (i.e. they

are not typically “professional directors” serving on many corporate Boards at the same time)

cooperative directors use different economic measures to monitor performance and test decisions (prices

received/paid by members, services to members). That should in no way indicate that cooperatives do not

take into their consideration the value of member equity or returns to equity or net earnings.

members typically have greater access to both directors and management in a cooperative than most

stockholders in an investor-oriented firm.

Democratic ideas and practices have been central to thinking about the governance of cooperatives. The

primary members have the ultimate responsibility for the well being of the organisation, and through the

electoral process they delegate this authority to their representatives, the members of the Board. The directors

collectively use that power until that privilege is revoked by the membership through the electoral process or

recall an individual director/ group of directors/ Board. This concept is known as representative democracy and

is similar to our democratic system of government. The need for a representative democratic system is

underlined by the fact that it is impossible for all members to make all decisions in the operation of the co-

4
operative, or to plan for the continuity of the organisation. Therefore, the notion of representative democracy is

the cornerstone of the power and authority in most co-operatives. (Chapman et al. 1987)

5.1 KEY DEMOCRATIC PRACTICES IN COOPERATIVES

 Open election for the Board of Directors on the basis of one-person one-vote

 Separation of elected members who are instrumental in policy making from the operating system that

implements policy decisions

 Expertise not a central requirement for selection to the Board of Directors

 No eligibility criteria except those pertaining to the minimum level of patronage of the business of the

cooperative

 Power to remove any elected member in the Board vested in the general body that elected it

 Authority to decide on issues of critical importance vested in the general body

As a democratic organisation, a cooperative's Board of directors should be so elected as to maximise the

directness of relationship with members and accountability to them. This is ensured by focussing on patronage

cohesive governance. The members of a patronage cohesive Board cohere around central patronage or business

issues relevant to members. Patronage cohesive Board is accountable to members and holds the Operating

System managers accountable to itself. The Operating System is the business enterprise of the co-operative

including managers, employees, plant and machinery, management structures and systems; it is the `device'

members create so that the co-operative serves purposes for which they joined it. (Shah 1995)

5.2 ELECTING A GOOD BOARD

(Source: http://www.wisc.edu/uwcc/info/governance/builbord.html)

A cooperative is a business, not a social club. It can take some effort to find people who will take their roles

seriously, have needed skills, and are willing to meet regularly (all with no pay).

Many cooperatives find it effective to set up a nomination committee to look for good Board members. A

committee can look through the membership list and find individuals with particular skills to bring to the Board.

Business owners, those knowledgeable in the industry, people with experience in financial or legal matters,

community organizing, or group process are generally good candidates. The person with "the most time" is not

necessarily the best Board candidate.

5
A written set of expectations should be given to each candidate. Each candidate should write an "application"

including their interest in, and vision for, the co-op, which can be distributed to all of the members before they

vote. A Board that has already demonstrated that it can have efficient meetings and good board process is more

likely to attract skilled candidates, even if those candidates already have busy schedules.

The aforesaid method appears to be very sound in its logical appeal but keeping in mind the difficulty of many

dairy cooperatives in getting willing people to become members of the Board; it will still be some more time

before anything like this can be put into practice for all the dairy cooperatives.

5.3 IDEALIZED FUNCTIONS OF THE BOARD OF DIRECTORS

(Garoyan and Mohn 1976)

 Supreme Decision Centre: As the supreme decision centre, the board is the final authority in

administrative decisions. The board is responsible for the way the cooperative will function and behave

in the long term. The board is entrusted to take decisions dealing with direction, ideas and policy,

whereas managers deal with decisions relating to day-to-day operations, short-term implementation and

allocation of resources to meet specific problems.

 Advisory Function: The board advises the General Manager and the management team on the insights

that the board, individually or collectively, has on a product-line, a new service, or a new facility. It

also acts as advisor to the members at the Annual General Meeting and other membership meeting held

throughout the year.

 Trusteeship Function: This is the function most widely understood as being the role of the board. As

guardian for the cooperative, the board must safeguard its assets and meet the demands of the key

stakeholders mainly the members and the creditors.

 Perpetuating Function: It refers to the sound continuance of the organisation. This may be the single

most important aspect of a board’s job, for within this function falls the selection and the appraisal of

the Chief Executive Officer or General Manager. Further way in which the board fulfils this function is

6
 to periodically review the services and products offered to its members thus responding to their

evolving needs and desires.

 Symbolic Function: In essence, it is leadership. The board members must be seen as leaders in the

cooperative and individual directors must be cooperative leaders in their every day functions. Their

loyalty and patronage to the cooperative must be sterling to instill loyalty and patronage from other

members.

5.4 CRITERIA FOR SEPARATING BOARD AND MANAGEMENT DECISION

AREAS

(Source: http://www.wisc.edu/uwcc/info/criteria.html)

There is no fine line of distinction between the executive's and the Board's authority for specific action. The

following ten criteria should be ideally followed in delineating Board and executive decision areas.

Criterion 1

Ultimate accountability to stockholders or members is vested in the Board of directors, who may subsequently

grant certain authority to officers, agents, and employees as permitted under the corporate charter, Byelaws, and

applicable laws. The executive or general manager, in turn, is accountable to the Board and initiates action

within the boundaries of authority granted by the Board.

Criterion 2

The Board of directors is primarily concerned with idea decisions; executives are primarily concerned with

action decisions.

Criterion 3

Decisions on overall objectives, policies, and goals of the company are the responsibility of the Board.

Criterion 4

Decisions related to attaining objectives and goals are the responsibility of executives.

Criterion 5

Decisions involving long range and consequential commitment of resources, which include facilities, finances,

or manpower, are the Board's responsibility.

7
Criterion 6

Decisions involving long range and consequential commitment of resources, which include facilities, finances,

or manpower, are the Board's responsibility.

Criterion 7

Decisions related to the assurance of capable executive succession by providing for executive depth and training

are the Board's responsibility.

Criterion 8

Decisions specifying the ideal pattern or model of Board behaviour and performance, and the review of and

perpetuation of this ideal through indoctrination and training of directors, are the Board's responsibility.

Criterion 9

Control over the executive and of Board performance, decisions involving long range and substantial financial

commitments and financial structure, objectives and policies, and public and member relations are the Board's

responsibility.

Criterion 10

Control over operations and over subordinate managers and employees, decisions involving budgets,

procurement, production, and marketing plans, and industrial and employee relations programs are the

responsibility of executives.

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 Table 1: Criteria for Separating Board/Management Responsibility Areas

BOARD MANAGEMENT
Accountability To Members To Board
Idea Decision, Judge Action Decisions, Manage
Areas of Concern
Ends/Purpose Means/Activities
Intermediate and Short
Determine Values
Commitment of Range
Long Range, Consequential
Resources Organize and Control
Set Limits, Monitor
Resources
Information Request, Review Develop, Analyze, Provide
Goals, Policies Determine Implement
Set Policies Regarding Results to be
Management Achieved and Limitations on Activities Provide Information for
Evaluation Monitor Progress Toward Results Monitoring
Monitor Compliance with Limits
Determine Values and Goals
Operations Set Limits Conduct
Monitor
Assurance of Capable Management and
Perpetuation Support, Participate
Board Succession
Determine Structure, Performance
Board Process None
Evaluation, Calendar and Agenda

Source: http://www.wisc.edu/uwcc/info/criteria.html

9
5.5 EVALUATING BOARD PERFORMANCE

(Source: http://www.wisc.edu/uwcc/staff/cropp/board.html)

5.5.1 Why Board evaluation?

 Provides the Board with a chance to reflect on and assess its areas of strength and weakness.

 May provide the Board with an invaluable yardstick by which it can prioritise its activities for the

future.

 Can serve an educational and consensus-building function -- by clarifying and defining the overall

standards of performance for the Board.

 A formal appraisal encourages all directors to reflect on what the Board has accomplished, as well

as on what it should be doing and how it works. Such a review can optimally result in all directors

contributing to setting goals of the Board. The commitment of all directors to the Board's priorities

and to improving Board effectiveness makes those goals all the more likely to be completed.

 Being a responsible Board member is hard work and is often a thankless job. An evaluation, which

points out strengths as well as weaknesses, can give a Board a sense of its own competence and

accomplishment as a group. This is a good foundation on which to build positive change.

5.5.2 Why the increased interest in Board evaluation?

 More accountability expected by:

o members/stockholders,

o government agencies, and

o public in general is interested in business ethics.

 Stricter enforcement of laws.

 More lawsuits against Boards of directors.

 Great consequences for mistakes made by the Board.

5.5.3 How can the evaluation of the Board be done?

(Source: http://www.wisc.edu/uwcc/staff/cropp/board.html)

Alternatives:

10
  Board's self-evaluation: All Board members participate.

An internal evaluation can be a good process. As a Board, you have an opportunity to know your own

strengths and weaknesses better than someone who has only limited contact with the Board.

 A committee of the Board does the evaluation.

 A non-Board committee does the evaluation.

 The evaluation is done by an outside consultant. An outside consultant may be particularly useful if a

Board has never evaluated its performance before. The consultant can provide some objective criteria,

offer a perspective on the co-op Board standards, and can help the Board set up criteria on which to

base future evaluations.

An outside consultant may be useful where there are emotionally charged issues, or where the Board's

internal process has not been the best.

 The evaluation of the Board is done on the basis of its performance in certain Key Performance Areas

(KPAs). These are the business areas that are vital to the success and survival of the company. There

are a few objective indicators in each key performance area; with the help of these key indicators,

performance can be measured against plans or standards.

5.6 INDICATORS OF GOOD GOVERNANCE

In the context of cooperative organisations, the system of governance, including the size and composition of the

Board of directors, need to be driven by the purpose and objectives of the business. The right Board of directors

is the one that can best help to deliver the benefits and services to the members which are at the root of the

organisation’s purpose and prime objectives. The overall system for the direction and management of the

organisation encompasses all aspects of the process from the members’ meeting to the formulation and

execution of business policy.

Some of the possible indicators of good governance in cooperatives could be: how much awareness the leaders

and members have about the Principles of Cooperation and the basic values of the Cooperative Philosophy; how

clearly they understand the ethical and moral elements which are the essential components of the Cooperative

Philosophy as a whole; how different is the cooperative enterprise from a private enterprise or a state enterprise;

how conscious are the Board members about their rights and responsibilities; to what extent the Board members

realise that they are accountable and answerable to the members who have reposed their confidence in them;

11
how much of operational powers are delegated to the chief executive; how smooth are the communication

channels between the Board and the chief executive; whether any code of conduct/ethics has been developed

and accepted by the organisation and its affiliates; how much is the level of transparency in dealing with the

employees; how smooth is the channel of communication between the cooperative and its stakeholders and

business partners; whether there is any discipline outlined on the use of assets of the organisation; how often are

the meetings held [on schedule and in accordance with the law and byelaws]; and to what extent the cooperative

institution obeys the directives of the State at the cost of its autonomy and freedom of action etc.

5.7 GOVERNANCE ISSUES IN INDIAN DAIRY COOPERATIVES

There needs to be some modification in the structure of cooperatives when governments are showing increasing

preparedness to reform cooperative laws, eliminate scope for bureaucratic and political control over

cooperatives, and turn them over to members. The question, however, is whether this turn-over will succeed

without proactive and specialist facilitation. Most of these organisations have a long history as state supported

bureaucracies. Their employees and managers are used to working as government employees. Their members

too are used to dealing with them more as bureaucratic spoiled systems rather than as their own cooperatives.

Most are heavily overstaffed; several have large accumulated losses. Replacing nominated Boards by elected

Boards and deputationists by professional managers at senior levels will help raise patronage cohesiveness as

well as governance effectiveness; however, a good deal more will need to change in order to transform these

bureaucracies into vibrant producer organisations. Such transformation would involve:

a) securing necessary macro-policy changes within each state and ascertaining reorienting employees and

managers so that they can understand their new role as employees of a farmer organisation rather than

of government;

b) reorienting producer members as owners of the cooperative rather than the beneficiaries of government

programmes;

c) enhancing managerial and technological capabilities at the command of these privatised producer

organisations;

d) carrying out key changes in their design so as to enable them to survive as a producer-

owned business in the new regime.

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Some elements of the redesign include: (a) reform of the electoral system so as to raise patronage cohesiveness

of elected Boards (b) rationalisation of the organisation and manpower structure, particularly to reduce

overstaffing; (c) a reform of the employee compensation policy to enhance the stake of managers and employees

in viability, sustainability and member incomes, and to generate incentive for maximising business volume as

well as enterprise profitability; (d) mechanisms to enhance the accountability of the elected Boards to

membership and of top managers to the elected Board; (e) tighter contractual relationships between members

and cooperatives to promote stable business relationships necessary for competitive advantage; (f) mechanisms

for enhancing member capital in the capital structure of cooperatives, particularly at district level; (g)

redesigning federal relationship so as to restore authority to village cooperatives and district unions in order to

move the centre of power closer to members; and (h) establishing participative management systems and

processes which empower members and managers, and enable them to manage members' dairy enterprise with

the cooperative's business plans in such a manner that together they are able to operate as a single unit,

exploiting the competitive advantage rooted in the very nature of the organisation as a producer cooperative.

(Shah 1995)

The weakest link in the Anand Pattern design is its governance. Its electoral process, highly indirect and

circuitous, will produce a patronage cohesive Board only by a miracle. Members of the primary elect a

management committee of DCS who in turn choose one of themselves as chairman; chairmen of all the DCS

form the electoral college for the district union's Board and are divided into zones with roughly equal number of

primaries; each zone elects one of its primary chairmen to the Union Board; and all members so elected to form

the Union Board choose one of them as the Union chairman. The Union chairman is thus removed from primary

members by three intermediate layers: primary society management committees; electoral zones and the union

Board. To add to this, in many states, seats are reserved at primary and union level for specific categories of

members. Thus, the entire electoral system is geared to serve the interests of every section except the members

and primaries who give the bulk of the Union's business. In order to retain his position, all that the Union

chairman has to do is to keep a handful of Board members in good humour. The same problem bewitches all

other federal cooperative systems: their electoral systems are designed to the outburst or dissatisfaction from the

primary members reaching the union and federation's elected Boards. (Shah 1995)

For reinforcing the democratic nature of governance in Indian Dairy Cooperatives, patronage cohesiveness

needs to be enhanced. This can be done by redesigning electoral processes for greater directness, by designing

13
the electoral zones to reflect business with the cooperative rather than size of membership or number of primary

societies, by instituting business-linked voting rights, by incorporating the right of recalling non-performing or

corrupt Board, by eliminating the system of reserving seats on Boards on any ground other than transactions

with the cooperative, by drastically reducing powers of the Registrar of Cooperative Societies , of federal bodies

(like Milkfed, Punjab) and of promotional organisations(for e.g. the Department of Dairy Development in the

case of dairy cooperatives) in the working of the Board, by removing the system of nominated Board members

except for the representatives of organisations that have a stake in the effective working of the cooperative, by

ensuring that top managers retain their positions only at the desire of the Board, and by linking their

compensation with the business performance of the cooperative. High levels of patronage cohesiveness in the

cooperative's Board will at once ensure high governance effectiveness as well. (Shah 1995)

One way of ensuring cooperative effectiveness demands professional management and farmer control through

political structures and processes such that the two-fold accountability, first of managers to elected leaders, and

then, of elected leaders to primary members is ensured. (Shah 1995)

6. KEY FINDINGS FROM QUESTIONNAIRE SURVEY

There were contradictions among the responses of Directors on the following questions:

Only those questions are listed below which received contrasting responses in terms of agreement or

disagreement. The degree or level of agreement or disagreement on a five point Likert Scale has not been taken

into consideration. Out of the thirty-four items in the questionnaire, there were contrasting responses on the

following eleven items.

Table 2: Items of the Questionnaire that Generated Contrasting Responses

AGREE DISAGREE
QUESTION
Formal mechanism for two-way interaction with the primary 4 1

members

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Board having an Agenda Calendar of its activities and key 4 1

decisions
Board’s responsibility for the performance of the Union 3 2
Board’s complete control over all the policy decisions 3 2

affecting the Union

Board having a Board Book (containing policies, values, 2 3

mission and Byelaws) provided to all the Directors

Board receiving timely and sufficient information from the 2 3

management about the performance of the Union

Board updating the goals & mission of the Union to take 3 2

care of changing member needs and the evolving business

environment

Decisions made by the Management almost always within 2 3

its decision area

Each Director having an understanding of the market forces 1 4

affecting the business of the Union

Board having a clearly defined plan of the Union for the 3 2

next 3-to-5 years

Board’s non-involvement in matters of a specific employee 3 2

7. KEY FINDINGS FROM INTERVIEWS

7.1 TERM OF A BOARD

5 years v/s 3 years

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All the elected directors interviewed were unanimous in supporting the usual 5-year tenure of the Board in

practice as ideal. Their main arguments in support were:

 It takes at least one year for them to get acquainted with the Union, systems, processes and most

importantly with each other.

 Expenses for the elections in case of a smaller will be an unnecessary burden on the Union particularly in

the case of not-so-profitable Unions.

 The term of the DCS is 5 years and it will also need to be amended. With DCS being largely inactive in

governance related matters, a shorter term will not help in getting interested people for post of the Directors

or Members of the Committee of the DCS.

 With a shorter term, there is a high possibility that the existing Board will not get credit for most of the

good medium term and long-term decisions. With most of the Directors being largely dormant and busy

with preparations for the elections in the last year of their tenure, the period of effective operation of

Directors will be considerably shortened.

One of the ex-officio nominees from NDDB and a sitting member on the Boards of various Unions suggested

that 3-year will be an ideal term for the Board. His major arguments in favour were:

 There should be some targets or a performance evaluation based on some scale for the Directors and based

on that target fulfilment or performance evaluation, they should be allowed to contest election for the

second time. It will act as an incentive for them to do their part effectively as well as act as a deterrent in

taking their role casually.

7.2 ELECTORAL PROCESS IMPROVEMENTS

In response to this question, almost all the Directors were pretty satisfied with the present electoral

process except for some minor improvements. The improvements suggested were:

 The authenticity of the fact that the candidate poured at least 500 litres of milk in the society the previous

year must be established thoroughly.

 The criteria of 500 litres must be scaled up suitably to represent a sufficient stake in the Dairy business but

keeping in mind at the same time that the interest of small farmers is not compromised.

16
 The Chief Election Officer should be some authority who is more immune to the political pressure of the

State Government like the Deputy Commissioner or some other suitable authority. The Returning officer

should also be chosen accordingly to ensure their non-partisan conduct of elections.

7.2.1 Zoning Or Constituency Building

Every Director was satisfied with the present method of zoning of the electorate according to the geographical

contiguity. When questioned whether a zoning or constituency-building method based on the equality of the

business by societies in each zone would be more suitable, only a few were able to comprehend it but almost

everyone asserted that it would be very complicated and impracticable. A few Directors who were able to

understand its implications said that it would be to the disadvantage of the members of the societies smaller in

terms of volume. The small volume of milk poured the society is beyond the control of any individual producer

as it depends on factors such as the number of members in the society, the population under the confines of the

society and other extraneous factors. Second, it would create discrepancy as the selection of the Directors or

Committee Members of the DCS is done under the fundamental democratic principle of the cooperatives of “

One Person-One Vote”.

7.3 CRITERIA FOR ELIGIBILITY

Almost all the Directors interviewed were in favour of minimum educational criterion of Matriculation (Std X)

at least. A couple of them even suggested Intermediation (Std XII) as the minimum academic qualification. All

these elected Directors conceded that such a minimum level of education was indispensable for an individual to

play his role as a member of the Board of Directors effectively.

But one of the ex-officio nominees from NDDB and a sitting member on the Boards of various Unions was

against imposing any such eligibility criterion based on academic qualifications. His main arguments were:

 Since almost eighty (80) percent of the milk producers were below the education level of Matriculation (Std

X), it would be unfair to deprive them of the interest of representing their fellow producers on the Board.

Furthermore, it would undermine the democratic spirit of Cooperatives.

 If there is no such criterion for the election to the highest corridors of Governance namely the Parliament

and the State Legislative Assemblies, it is unreasonable to impose such criterion on a similar democratic

structure like Cooperatives.

17
There was a suggestion from one of the elected Directors on the reservation of seats for women in the Board of

Directors since they were an integral constituent of the Dairy business and contribute as much as 70%-80% of

the dairying activities. He also felt that since the communication among women is more effective, it would help

significantly in increasing the awareness among milk producers.

One of the ex-officio nominees from NDDB and a sitting member on the Board endorsed the idea of reservation

for women. His suggestion in this regard was:

There should be one seat for women on the Board or the number of seats should be in proportion to the number

of women DCS to the total number of DCS in the Union, whichever is higher.

7.4 LINKING BOARD TENURE TO ITS PERFORMANCE

In response to this question, the elected Directors were divided with five of them opposing the

proposition and two favouring it. The reasons were more or less similar to those given in question regarding the

ideal term. One other reason for their disagreement was:

 The Directors do not have any substantial control over the working of the Union due to the excessive

interference by the Government primarily in the form of the Registrar of the Cooperative Societies and his

nominees as well as the Federation. The accountability of the Board can only be fixed in the case of its

autonomy and independence in all policy matters of the Union.

7.5 PERFORMANCE INDICATORS FOR BOARD EVALUATION

This was the trickiest question for the elected Directors or even the NDDB nominees. The various answers

ranging from subjective criteria to the objective ones after giving hints to some of the Directors were:

7.5.1 Subjective Criteria:

 Producers’ Satisfaction

 Impact of Board Decisions

 Awareness of the Directors

7.5.2 Objective Criteria:

 Profit of the Union

 Average Procurement as a percentage of the Average Total Milk Production in the Milkshed of the Union.

18
 Balance Sheet (provided its veracity is established)

 Average Procurement Price

 Value of the utilization of Union’s services by the Producers.

 Cross comparison between the Balance Sheets and the Profit and Loss Accounts of the Union for the last 3-

4 years keeping the variations in Average Procurement Price and the Profit of the Union in mind.

 Profit of the Union since the Procurement Price is the topmost priority of the Directors for appeasing their

constituency.

7.6 INCENTIVES AND POWERS REQUIRED TO ACCEPT ACCOUNTABILITY

 Government interference in form of the omnipotent Registrar (Cooperative Societies) should be curtailed.

According to them, the Registrar (Cooperative Societies) has the power to seize or sack any Director. All

decisions on matters of importance are subject to the approval of the Registrar and hence they are

dependent on the individual discretion of the Registrar

 The number of Government nominees should be reduced further, if possible and the total number of

external nominees should be not more than 3 excluding the Managing Director of the Milkfed and the

General Manager of the Union.

 There should be a clearer delineation of powers between the Federation and the Unions.

 The Board should have the power to reward or punish employees on the basis of their performance.

 The restriction on a Director to contest for a third consecutive term should be lifted as the producers should

have the final authority to decide whether a person is fit for being chosen as a Director for the third time.

 The financial compensation in the form of Sitting Fee to attend a Board meeting should be sufficiently

attractive for the Directors to forsake their other important engagements related to their livelihood. At

present, the sitting fee for a Board meeting of the Union was Rs. 250 as compared to Rs. 500 for that of the

Federation. The TA was additional and was reimbursed for the vehicle that was used by the Directors to

come for the Board meeting.

19
7.6.1 Financial Compensation Like Salary For Greater Commitment

On this issue, five out of the seven Directors agreed that financial compensation in the form of a salary would

ensure greater commitment and responsibility from elected Directors. Their major argument to support this

proposition was that they would be able to devote more of their attention towards their responsibilities as a

Director sidelining some of their engagements and concerns related to their livelihood as they become more

secure financially.

On the other hand, two elected Directors and the NDDB nominee categorically opposed any such proposition

citing the following reasons:

 The post of Director of the Union is an honorary post demanding the services of individuals who feel

themselves worthy of representing the cause of their fellow milk producers without any financial

allurement.

 The prestige and status associated with the post is in itself the greatest allurement.

 Any fixed monetary compensation like a salary will encourage people with selfish financial motives to

contest the election of the Directors and this would cause further malpractices in the election process.

 A salary will not guarantee the wholeheartedness commitment of a Director towards his responsibilities as a

Director of the Union.

 It is a well-established convention that the post of the Director is honorary.

7.7 MOTIVES FOR BECOMING A MEMBER OF BOARD OF DIRECTORS

The most plausible explanation from my interactions in Milk Union, Ropar are:

 Ladder to make a transition to higher-level politics: By being on the centre stage during all the important

public events of the Union including the AGM, patronage refund distribution etc., awareness camps, the

Directors are able to earn a presence and recognition in the public. Some of them even get a platform to

address people and air their views publicly.

20
 Prestige and clout associated with the position: Through their interactions and contacts with public officials

and other influential people in course of their tenure as a Director, these people are able to develop a clout

for themselves. Due to this clout, they are frequently invited on social occasions especially in their

constituency and accorded a special treatment. All this makes this position one of prestige.

 In the absence of any performance demand and lack of accountability, there is no mental deterrence

for people interested in exploiting this position for their own ends.

One of the Directors who was about to retire for a term after completing two successive terms disclosed that the

two elections cost him around one lakh rupees which is a considerable expenditure and gives a fair indication of

the covetousness for the post of Director of the Union.

8. INFERENCES FROM QUESTIONAIRRE AND INTERVIEW

FINDINGS

The major errors observed in the response to the questionnaire and interviews conducted can be classified as:

 Acquiescence error: Response based on respondent’s perception of what would be desirable to the

sponsor (e.g. NDDB)

 Auspices error: Response dictated by the image or opinion of the sponsor, rather than the actual

question

The responses of the Directors to the questionnaire seemed tailored. This was reflected in the various

contradictions and inconsistencies in their responses. The possible reasons for this phenomenon could be:

Disparity of stakes in the Directorship of the Union: A couple of Directors who were in their second

successive term and would be ineligible to contest for the Directorship for the third consecutive term, were more

candid in their responses than the Directors in their first term. This was possibly because of the disparity in their

perceived stakes in Directorship.

Either the Directors genuinely lack awareness about their roles and powers or they fake ignorance about them

to shirk accountability. If the possibility of their blamelessness under the pretext of ignorance is obviated

21
through a training programme that is subsequently evaluated to ensure a minimum level of their learning, then

the Directors can be made accountable for the performance of the Union.

The knowledge about the basic financial aspects of a Milk Union’s business is very rudimentary in most of

the elected Directors of both Ropar and Gurdaspur Milk Unions. Except for knowing and using some general

terms like Balance Sheets, Profit and Loss Statement, most of the Directors were almost clueless in the

interpretation of these important financial statements.

In the absence of any performance demand or performance evaluation, people with vested political interests

can get elected and spend their tenure comfortably without making any significant contribution to the Union.

Although the awareness level is quite high among the milk producers in the milkshed of Milk Union Ropar,

it will still take some time before the primary members become prudent enough to monitor the activities of the

Board.

Groupism in the Board: During the interview, some Directors confided that there is a majority and its anti-

group in the Board. The political affiliations within the Board determine the formation of groups; the majority

group and its anti group. The selection of the Chairman is done mainly on the basis of his political stronghold

rather than his competence or his track record. The present Chairman of the Milk Union Ropar is the District

President of BKU (Bhartiya Kisaan Union) and the Chairman of Milk Union Gurdaspur is also the Chairman of

Milkfed and a close associate of the Punjab Chief Minister. In Milk Union Ropar, it was paradoxical to witness

the very Directors, who had elected the Chairman, ridicule him for his incompetence.

22
9. SUGGESTIONS FOR IMPROVEMENT

9.1 ISSUES UNDER THE PURVIEW OF THE STATE COOPERATIVE SOCIETIES

ACT

Although measures for gearing up the democratic system, the most important determinant of the responsiveness

and accountability of the governance system in a cooperative, would have been a more desirable option keeping

in mind the onus of the study, yet it was not feasible due to the low level of participation of the milk producers.

Since the dairy cooperatives in Punjab and other northern states are interventions predominantly introduced by

the state governments in contrast to the self-organized cooperative movements in parts of Gujarat and

Maharashtra, the level of stakeholding and participation of the milk producers in the affairs of the Milk

Cooperatives is not very encouraging. Secondly, with the excessive control of the state government either on its

own or through its agents like the Registrar of the Cooperative societies and bureaucrats, it is a dim possibility

that any improvements in the democratic processes and structure can be incorporated. Furthermore, democratic

processes by their very nature tend to be slow and their impacts are visible only after a sufficiently long time

horizon, therefore any improvements or amendments in the democratic system would not be so expedient. The

positive thing that is observable is the increase in the level of awareness of the milk producers in the last four to

five years thanks to the awareness and membership improvement camps launched by the Milk Union. This

conclusion was drawn from the personal observations of the directors interviewed and the Union officials. It was

also reflected to some extent in the increasing turnout during the Board elections and the Annual General

Meetings as admitted by the aforesaid sources. Meetings More and more farmers have started understanding the

dynamics and philosophy of cooperatives but there is still some time before they become fully competent to

make use of the real power vested in a democratic system.

The suggestions for improvements mentioned below are some of the measures that can be taken without

tampering with the established democratic structure and system of Milk Union Ropar. Most of the suggestions

have inbuilt checks and balances to prevent the abuse of the post of Director and subsequently foster demand for

performance. These will even contribute to the strengthening of the democratic system by giving impetus to

greater member participation and sustained efforts to increase the awareness of the milk producers.

23
9.1.1 Duration of the Term

(Issue under the Article 26, Clause 1(A) of the Punjab Cooperative Societies Act, 1961)

A three-year term will be ideal for a Board. The major arguments in favour are:

A term of three years is sufficient for a Director to demonstrate his contribution to the progress of the Union. If

there are performance evaluations for an individual Director and these are brought to the notice of the primary

members, the Director will use his tenure more effectively to build his credentials as a Director. Hence it can

reduce complacency by individual directors

It can reduce groupthink, the phenomenon that occurs when group members become so accustomed to seeking

concurrence that the norm for consensus overrides the realistic appraisal of alternatives courses of action. This

subdues the expression of divergent, minority or non-conformist views. A shorter tenure can also act as a limiter

to the ill effects of the alliances that are formed in a Board.

A term of three years is ideal for a business entity like a Milk Union. Since business situations are dynamic

under the influence of fast changing business environment and stakeholder expectations, they need to be

handled with different approaches that are in tune with time. A shorter tenure has a reasonable chance of

bringing different and new ideas to the Board as a result of the change in its composition after the completion of

tenure. A committee constituted by the Planning Commission of India under the Chairmanship of Choudhary

Brahm Prakash to undertake a review of the status of the cooperative movement and suggest future directions

has also suggested a three-year term for the BOD of a Cooperative organisation as ideal.

9.1.2 Restriction on Number of Consecutive Terms

(Issue under the Article 26B, Subsection (2) of Punjab Cooperative Societies Act, 1961)

The restriction on a Director to contest for a third consecutive term should be lifted as the producers should have

the final authority to decide whether a person is fit for being chosen as a Director for the third time. With the

awareness among producers improving significantly, this restriction is not appropriate anymore.

9.2 ISSUES RELATED TO BYLAWS OF MILK UNION ROPAR

9.2.1 Composition of the Board

The number of ex-officio members and nominated members (other than the General Manager and nominee from

the Federation) should not be more than two. Since the State Government does not have any contribution to the

24
share capital of the Milk Union Ropar, it should be asked to withdraw its nominees on the Board of Directors.

The three nominated members proposed can comprise of the nominees from NDDB, Financial Institutions like

HDFC that has financed 143 Automatic Milk Collection Units worth approximately Rs 2 crore and one

academician related to R&D in the Dairy Sector. The presence of too many nominated members is probably the

reason why the nominated members sit back during the Board meetings and intervene only when there is an

issue of critical importance to their organisations or when there is a blatant breach of rules and norms. There is a

tendency among nominated members to avoid conflict and debate with each other even at the cost of the quality

of decisions. So including nominees from only those organisations who have a reasonable stake in the effective

working of the Union, except one academician as proposed above, may ensure better decisions in the interests of

the Union.

9.2.2 Quorum

The Quorum for the Annual General Meeting (AGM) must be sufficiently raised to at least 50 percent of the

total number of representatives of the societies. This will lend more authenticity to the occasion and will

considerably help in the increase in understanding of at least some of the representatives of the society. The

present ill practice regarding the arrangements by procurement staff for bringing only the requisite and

appropriate representatives to suit the designs of their patrons will also be somewhat restricted. This will also

increase the effectiveness of some of the preceding recommendations regarding the publicity of performance

evaluations in proper forums.

According to the Bylaws of Milk Union Ropar

“1/5th of the total number of delegates and representatives of the societies or 25 (whichever is less) shall form a
quorum at the General Meeting.”

9.2.3 Relationship with the Milk Federation

As given in the Byelaws, the scope and limits of the clause ‘as per directions of the Federation’ should be clearly

laid out. A better option would be to delete the phrase ‘as per directions of the Federation’ altogether as Milk

Union Ropar is dependent on Milkfed to a negligible extent. To add to the argument, Milk Union Ropar gives a

commission of 2% to Milkfed on the liquid milk sales although Milkfed has no role to play in the sale of liquid

milk of Milk Union Ropar. Since, Milkfed Punjab does not significantly contribute to the well-being of Milk

Union Ropar, this phrase has little relevance in the present situation and should thus be deleted.

25
9.3 ISSUE IN THE HANDS OF MILK UNION

9.3.1

Awareness

The need for increasing the awareness of the Directors is indispensable for making them accountable for the

performance of the Union. The awareness can be increased through a comprehensive training package

administered and evaluated by an independent agency. Evaluation of the learning from the training is the

most important requirement for ensuring its benefits.

Furthermore, there has to be an evaluation of the learning of the individual Directors from the training package.

An individual Director will have to satisfy a minimum benchmark on this evaluation and if he fails to do so, he

has to reimburse a part of the training expenses and undergo the training again till he satisfies the pre-

established minimum benchmark.

There can even be an Accreditation or Rating of Directors on the basis of their evaluation after the

training. This will instil motivation and a spirit of competition in the Directors and encourage them to imbibe

training to the best of their ability.

The tentative design of the modules for the training packages can be as follows:

Module I : Understanding the working of the Union, processes and its systems

Module II : Financial Aspects of the Union’s business

Module III : Orientation on State Cooperative Act and Byelaws of the Union

Module IV : Board Management Roles and delineation of decision areas

Module V : Existing policies

Proposed Constituents Of Some Modules (I, II & V)

Module I

Understanding the working of the Union, processes and its systems

Difference between a cooperative and a corporate organisation

26
 Three Tier Structure – Anand Pattern
Main Features and role of the three tiers of Anand Pattern
Role of the Union – Processing Milk and Marketing Products
Milk and its constituents
Indicators of quality of milk and factors affecting quality
Process flow diagram of milk
A complete tour of the milk plant starting from dock to the packaging centre
Major plant equipments and spares
Pasteurisation
Standardization
Meaning of plant capacity
Products manufactured and their average margins
Inventory, its advantages and disadvantages
Seasonality in milk production
Management of Supply and Demand Gap
Two-axis pricing of milk
Payment System
Organisational Structure of the Union
Method of purchases
Major Purchase items and their demand pattern
Major Markets and Buyers
Distribution and credit system
Role of Federation and its powers

Module II

Financial Aspects of the Union’s Business

Major cost and revenue heads in the various departments

Concept of fixed and variable costs and the classification of various costs
of the Union under them
Concept of break-even point and capacity utilization
Importance and the need of working capital in a Union
Interest rates of long term loans, medium term loans and short term loans
Concept of product mix and its impact on the profit of the Union
Credit policy and credit collection method
Meaning of basic financial ratios and their interpretation using comparison
with competitors and the best in dairy industry

27
 Major lenders and financers
Importance of cost cutting and operational efficiency

Indicators of Key Performance Areas (KPAs)

Revenue and cost sharing between Milk Union and Federation

The composition of modules III and IV is left to the discretion of the body conducting the training

Module V

Existing policies

This module should cover existing policies related to:

Personnel
Marketing
Procurement
Purchase
Quality

For the first timers to the Board of Directors, there should be a module on Board Meeting Procedures as well. It

should focus on role clarity of the Directors, understanding of Proceeding and the review of Proceeding.

Furthermore, there should be forums for interaction across the different Unions where the members of the Board

of Directors and Management confluence and share their ideas and experiences. This can be supplemented with

guest lectures by eminent scholars, consultants etc.; workshops; seminars. These can also serve as platforms for

knowledge upgradation.

9.3.2 Accountability and Control

9.3.2.1 Evaluation of Board Performance

Unless the Board is made accountable for the working of the Union, there would be no demand for performance

from the Board Directors. But accountability goes hand in hand with autonomy, so before making the Board

accountable, its autonomy must also be ensured. Increasing awareness can go a long way in ensuring that the

Board members do not have an excuse for non-cognisance of their powers and duties.

The objective criteria on which the performance of the Board can be evaluated on one or more of the following

parameters:

28
 Cross comparison between the Balance Sheets, the Profit & Loss Accounts of the Union for the last 3-4

years keeping the variations in Average Procurement Price and the Profit of the Union in mind. These

documents can also be compared for Unions under the same Federation to find whether there are any

deviations due to some general trend or phenomenon affecting their performances.

There can be key indicators developed for specified key performance areas of the Union that can reflect the

performance of the Union Board and consequently the Board.

Key Performance Areas (KPAs)

The most effective control occurs when major attention is given to those business performance areas, which are

vital to the success and survival of the company.

Although plans furnish the most complete and accurate basis of measuring performance, it is not possible, nor

desirable, for the Board and executive to keep track of every detail of the programs, which arise from these

plans, not even of every fairly important phase. The board must concentrate its attention on those performance

factors that indicate whether substantial deviations from desired results have occurred or are about to occur.

KPAs that might be important for control and evaluation of performance in a Milk Union include:

1. Profitability

2. Market position and product leadership

3. Production or processing

4. Procurement

5. Personnel

6. Finance

7. Member communications

Key indicators

There are a few vital indicators in each key performance area; with these performance can be measured against

plans or standards.

Like KPAs, key indicators allow the board to make manageable, selected observations. The concept of key

indicators is basic to control.

29
Possible key indicators for specified key performance areas:

KI for raw material procurement

 Average supply per member

 Transportation distance and costs

 Total procurement costs per ton

 Salary & wages expenses for procurement staff per ton of raw material.

KI for plant production and operation

 Average cost per unit of products

 Man-hours per thousand units

 Quality variances

 Variance from planned production volume

KI for personnel

 Employee retirements, resignations, transfers

 Absentee record by departments

 Performance reviews

 Manpower planning and management

KI for finance

 Inventory turnover

 Sales per rupee of fixed assets

 Sales per rupee of working capital

 Break-even point as percent of capacity

 Ratio of total debts to total assets

 Ratio of net income to total assets

 Ratio of net income to sales

 Average debt collection period

30
KI for market standing and sales

 Union’s sales to total sales in markets operated in by it

 Marketing costs per unit sold

 Selling cost as a percentage of net sales

 Product price trends

 Returns or allowances as a percent of gross sales

KI for member and stockholder relations

 Number of new members joining the Union

 Number of awareness camps organised by Directors

 Total Attendance of DCS representatives in Annual General Meeting

9.3.2.2 Evaluation of an Individual Director

There is a possibility of developing some performance evaluation form or some rating scales to assess the

performance of the different Directors individually as well.

Criteria for evaluating an individual Director

Membership and total experience on various Boards

Individual Patronage
Participation in Board meetings (Peer evaluations)

Accreditations or Training Performance

Evaluation of membership communication programs

If this performance evaluation can be presented in AGMs or Annual Report, then there is bound to be pressure

for performance on the Directors at an individual level as well. Awards for the best performing Director can be

instituted and care must be taken to ensure that this aspect gets due publicity.

KI for membership communications by an individual Director

o Number of new members in his constituency

o Ratio of his zone’s patronage to total patronage

o Number of awareness camps organised by him

31
o Increase in his society’s patronage

o Increase in his zone’s patronage

9.3.3 Management Of Board Meetings

There should be a tentative time schedule attached to the Agenda for the Board meeting for better time

management and ensuring the discussion of all the items on the Agenda. This is to counter the possibility

10. LIMITATIONS OF THE STUDY

The primary data sources for this study were:

 Semi-structured interviews with seven out of eleven elected Directors of Milk Union Ropar and two NDDB

nominees on the boards of Milk Unions of Punjab

 Questionnaire response from five elected Directors mentioned above

 Board Meeting at Milk Union Gurdaspur

Due to limited primary data and the restricted scope of study encompassing two Milk Unions in Punjab as

mentioned above, the inferences and the suggestions made, have limited generalisability.

32
11. REFERENCES

Shah Tushaar (1991) The Dynamics of India’s Village Cooperatives: A Survey Of Issues and a New Agenda for
Research; Working Paper, Institute of Rural Management Anand

Shah Tushaar (1995) Reengineering India's Cooperatives: A Framework for Action; Working Paper, Institute of
Rural Management Anand

Garoyan L. and Mohn P. The Board of Directors of Cooperatives Berkeley: Agricultural Sciences Publications,
University of California (1976)

Chapman H., Holland D.A., Kenny S.D. and Others The Contemporary Director Saskatoon: Cooperative
College of Canada (1987)

INTERNET REFERENCES
http://www.wisc.edu/uwcc/info/criteria.html
http://csf.colorado.edu/co-op/coop-bus/april98/msg00917.html
http://www.wisc.edu/uwcc/info/i_pages/gov.html (main link)
http://www.pellervo.fi/cg/raportti.pdf

33
34
 ANNEXURE I

BOARD PERFORMANCE EVALUATION FORM

Express your level of agreement to the following questions on a scale of 1 to 5

Strongly Strongly
Disagree Disagree Neutral Agree Agree

1 2 3 4 5

1. Membership Linkage and Accountability

a) Does the Board represent only some particular societies or some particular sections of milk producers?

b) Does the Board have a mechanism for two-way communication with the members of its societies?

c) Does the Board have an Agenda Calendar of its activities and key decisions?

d) Does the Board follow such an Agenda Calendar?

e) Do the meetings of the Board take place according to a fixed schedule?

f) Does the Board manage the time period of the meeting effectively based on its agenda?

g) Are all the members of the Board seen participating actively in the Board meetings?

h) Does the Board discuss all the relevant issues in its meetings thoroughly?

i) Is the Board responsible to its members for the performance of the Union?

j) Does the Board make a sincere effort to convey the performance of the Union to
to its members through the AGMs and the Annual Report?

35
2. Board Policies

a) Does the Board keep a written record of its policies and decisions?

b) Does the Board have complete control over all policy decisions affecting the

Union?

c) Does the Board have the organisation’s values and its mission in mind while

making any policy?

d) Does the Board have a Board Book (containing policies, values, mission and

Bylaws) provided to all Directors?

3. Board/Management Relations

a) Does the Board provide only overall guidelines or goals to Management?

b) Does the Board remain uninvolved in specific employee matters?

c) Does the Board receive information from the Management about the performance of the
Union on a timely basis?

d) Is the information provided by the Management sufficient for the Board to make
informed decisions?

e) Does the Board have clear-cut criteria for the performance of the GM/MD?

f) Are the decisions made by the Management almost always within its sphere of
decision area?

g) Does the Board have a say in the operational decisions of the Union like transfers,
recruitments, promotions etc?

36
4. Planning and Financial Overview

a) Does each Director in the Board have an understanding of the market forces
affecting the business of the Union?

b) Is each Director able to read and interpret financial statements?

c) Does the Board monitor the organizational performance against goals, budgets or
key indicators on a timely basis?

d) Is the Board responsible for the selection of the external auditor or auditing firm to conduct the
external audit each year?

e) Does the Board establish goals and policies relating to the important financial
ratios and receive regular financial reports from the Management?

f) Does the Board have a clearly defined plan of the Union for the next 3-to-5 years?

g) Does the Board update the goals and the mission statement of the Union every few years to
take care of changing member needs and business environment?

5. Board Awareness and Leadership

a) Is there a written code of ethics for the Board?

b) Do all the Directors unanimously stand behind and support the decisions taken at the Board
meetings?

c) Do all Directors regularly pour milk in the society and use the various services provided by the
Union?

d) Are there any Directors who take part in the politics of the state and are active members of
political parties?

e) Do the Directors make use of the various resources and facilities of the Union other than the
sitting fee due to them?

f) Has each of the Directors attended at least one training programme in the current tenure or
previous tenure?

37
 ANNEXURE II
KEY QUESTIONS FOR INTERVIEWS

1. What should ideally be the term of a Board or its members?

2. Should the term of the Board be linked to its performance?
3. What, according to you, should be an ideal electoral process for the selection of the Board?
4. What should be the guidelines in zoning or constituency building of the electorate for the Board
elections?
5. What should be the performance indicators on which the performance of a Board can be evaluated?
6. What should be the incentives and powers given to the Board to make it accountable for the
performance of the Union?
7. Can the Board be made accountable to the members for the performance of the Union if the powers for
the appointment and dismissal of the CEO (based on his performance) are vested in the Board?
8. What difficulties are foreseen in making the CEO accountable for the performance of the Union based
on the targets or guidelines provided to him by the Board?
9. Are the decision areas between the Board and the Management clearly demarcated? How can this
delineation be made more effective?
10. How can the selection of the Directors of the Board be made more effective? Should it be based on
certain eligibility criteria like educational qualifications, minimum average patronage etc?

38