Farm co-ops in the UK are not doing enough to recruit the right directors and monitor their performance, a new report suggests.
Co-operatives UK, the national apex body for the co-op sector, says director recruitment is critical to a business’s success and a remuneration package is important in attracting the right mix of skills and experience.
But of the co-ops surveyed, only 12% have a formal process to review board performance; just 37% have a director development programme in place; and only 36% are confident that they are recruiting enough directors of the necessary calibre.
There is also a need for greater gender diversity, with only 13% of respondents having women on boards.
To remedy this, Co-operatives UK and SAOS say agricultural co-ops should build more regular director and board performance reviews into governance planning.
And boards should have a formal process to monitor director remuneration to ensure it reflects the business’s needs and ability to recruit the right directors.
The report found that director remuneration, and the amount of time spent by directors on their roles, varies widely – even among organisations with similar turnover and employee numbers.
Richard Self, agricultural manager at Co-operatives UK, said: “The board is the engine powering your co-operative. It is vital to regularly service your board just as you would your car.
“What the figures in this survey show is that, alongside some best practice, many agricultural co-operatives are not taking the time to time to ‘tune’ their boards.”
He added: “Whether through performance reviews, board development or ensuring there are appropriate levels of diversity and the right mix of skills, there is a clear need for more co-operatives to put systematic processes in place to ensure boards are best placed to drive the business forward.”
Jim Booth, head of co-op development at SAOS, added: “The quality and calibre of directors is arguably one of the most important factors in ensuring future success for a co-op.
“Farmer directors don’t expect to make lots of money while serving on their co-op board but equally they should not subsidise the rest of the membership. The remuneration level for directors needs to be appropriate to attract and retain the right calibre of people.”