§ 308B.401 Board Governs Cooperative

In plain language#

The board takes "all action for and on behalf of the cooperative, except those actions reserved or granted to members." ^{P1, § 308B.401} Four rules follow from this one paragraph:

1. Who acts. The board governs; members act only where the chapter, the articles or the bylaws reserve something to them.
2. How the board acts. By "the affirmative vote of a majority of the directors voting at a duly called meeting unless a greater majority is required by the articles or bylaws."
3. No lone directors. A director, alone or with other directors, "does not have authority to act for or on behalf of the cooperative unless authorized by the board."
4. Duty. A director may advocate for members or member groups, "but the fiduciary duty of each director is to represent the best interests of the cooperative and all members collectively."

How it works in practice#

• Read rule 2 together with § 308B.435's specific action threshold: the greater of a majority of directors present and a majority of the minimum quorum, unless a larger requirement applies. Quorum is in § 308B.431; written action is in § 308B.441. See Director and officer rules in Chapter 308B.
• Rule 3 is why delegation matters. Officers other than the chief executive cannot bind the cooperative without board authority (§ 308B.475). Board resolutions authorizing signers, banking and contracts are the paper trail.
• Rule 4 matters for directors who are elected by a class, district or constituency. The statute allows them to advocate for that group but not to put it ahead of the cooperative. The standard of conduct is in § 308B.455; conflict-of-interest rules are in § 308B.461.
• A statute that sends a decision to the members trumps this section, for example, amending the articles (§ 308B.221) or selling substantially all property (§ 308B.571).

Related#

• Election and terms: § 308B.411
• Standard of conduct: § 308B.455
• Governance guide: Run board and member meetings