12 



Membership Control 



Members of the associations nominate and elect directors who are 

 charged with maintaining the business affairs of the organization 

 in a satisfactory state. Membership voting power is allocated, in 

 most cases, on the basis of one vote per member regardless of the 

 number of common stock shares held or amounts of patronage provided. 

 A few associations authorize that a member be given one vote for 

 each share of common voting stock held. 



Some of these also distribute patronage refunds in the form of voting 

 stock. Voting power in the latter case is thus apportioned among 

 members on two bases: (1) Number of common stock shares held, and 

 (2) Amount of patronage furnished. 



When members of an association are in a large geographical area, 

 districts are usually provided, the members of a district nominating 

 and electing a director from their area. In some cases where dis- 

 tricting is used, directors at large also sit on the board, having 

 been nominated and elected by the membership as a whole at the annual 

 meeting. 



The one vote per member provision helps to assure that a cooperative 

 will not be controlled by a few members. It also encourages support 

 of an association, since each member feels that his role is equal to 

 that of others in determining its control. 



On the other hand, voting rights based on the amount of common stock 

 held, and in some cases patronage, aid in the election of directors 

 reflecting the views of those members having the greatest interest 

 in the association, both from an investment and use standpoint. 



Districting helps to prevent heavily member-populated regions from 

 dominating representation on the board. Election of directors at 

 large tends to balance the composition of the board, and lessens the 

 chance of discord developing among regional factions. 



Board of Directors 



Composition, regulation, functions, and compensation of the associ- 

 ations' boards of directors will be discussed in this part of the 

 report. 



Composition 



The number of directors serving on association boards ranged from 7 

 to 21, with 11 being found most frequently. Larger 'associations 

 generally had a greater number of directors on the board. The major 

 factor responsible seemed to be the size of the territory in which 

 the membership was located. A distribution of the number of directors 

 composing the board of each association is shown in the accompanying 

 tabulation. 



