Board Size and Composition
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Key points
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Current Situation
The Co-operatives Act requires that a majority of directors must be Member Directors. Our Rules state that the Board must be made up of a minimum of nine and a maximum of 12 Directors, comprising nine Member Directors and up to three Independent Directors.
Member Directors are elected by members and Independent Directors are appointed by the Board and ratified by members.
CBH has a district-based electoral system for Member Directors, with five districts: two Member Directors each from Districts 1 to 4 and one Member Director from District 5.
Grower members vote only on candidates standing in their own District.
Elected Member Directors are responsible for representing the interests of the whole of the membership, not just the district which elected them.
Peer review & best practice governance
Size
Our peers believe that boards should be large enough to incorporate a variety of perspectives and skills to meet its obligations without being too large to operate effectively.
All agree that the majority of directors must be member directors. Most have some independent directors as a means of ensuring key skills are available to the board.
The Australian Institute of Company Directors (AICD) suggests that large organisations have a board size of between eight to 12 directors.
Of those we interviewed, the average size of co-operative peer boards was 9.6 directors.
Board size alone was not a key issue for most of our co-operative peers and should not be considered in isolation of other factors such as the mix of member directors and independent directors, as well as board skills.
Representation
Our peers agree that elected boards should represent the diversity of members.
Many of the co-operatives interviewed have moved away from district or region based voting to attract the best candidates from their entire membership base.
For growers to consider
Based on the insights gained through the peer review and best practice governance phase, the Board would like grower feedback on:
- reducing the size of the Board. This is based on the best practice analysis of co-operatives from around the world, which have smaller board sizes on average compared to CBH.
- whether the potential composition of the Board should be a hybrid model, if the board size is reduced. This is detailed below.
Reduction in Board Size
While the Board supports a reduced board size, we invite grower feedback on this.
The reason the Board has considered a smaller board size is it may facilitate more effective discussion and debate, leading to more agile decision making.
The Board has put forward a possible new hybrid model for discussion, consisting of:
- 5 District-elected Member Directors, one from each District
- 2 Statewide-elected Member Directors
- 3 Independent Directors
The model would reduce the total number of Directors from 12 to 10, while maintaining district representation.
The introduction of new statewide-elected Directors will enable candidates to be elected from an unrestricted pool and may encourage voting based on skills rather than personal relationships or local ties.
Grower Input
Growers are encouraged to provide direct feedback on these options to reduce board size and implement the hybrid composition model at grower meetings and in our governance survey.
Changes to the Board’s size and model require members’ approval at a General Meeting.
Questions
- How do you feel about reducing the overall Board size?
- Do you support the introduction of some statewide-elected Directors, in addition to district-elected Directors?
- How do you feel about the 5 district, 2 statewide and 3 independent Director model?
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