J.
OF
THE
NORI'HEASTERN
AGR.
EO::N.
COUNCIL
VOL.
XII,
NO.
2,
FAIL, 1983
STATE
CCOPERATIVE
STA'IUI'ES -
CXJNFLICT
OF
CCOPERATIVE
CONCEPT
WITH
EFFICIENCY
Terence
J.
Centner
Cocperati
ve
statutory
provisions
that
pro-
vide
for
denocratic
rrerrbership
control
provide
limitations
affecting
the
managerrent
of
coopera-
tives.
Management
provisions
concerning
member-
ship
requirements
for
directors
and
officers,
arrendments
to
articles
of
incorporation
,
and
re-
I!Oval
of
officers
may
unduly
restrict
the
manage-
ment
of
cooperatives
and
contribute
to
the
poor
economic
performance
of
Northeastern
coopera-
tives.
Minor
statutory
changes,
or
changes
of
a
cooperative's
articles
or
cylaws,
may
help
im-
prove
the
performance
of
these
business
opera-
tions.
INI'ROOOCTIOO
The
current
economic
recession
has
been
ac-
crnpanied
cy
a nru:ked
decline
in
the
economic
well-being
of
our
nation's
one
hundred
largest
cooperatives.
In
1981
their
net
margins
de-
creased
fort:y-four
percent
with
net
losses
nearly
doubling
(Davidson
and
Street)
.
Coq;>eratives
re-
sponded
to
these
economic
conditions
with
a
for-
ty-four
percent
decrease
in
distribution
of
earn-
ings
as
patronage
refunds
and
a
decrease
in
re-
funds
paid
in
cash
(id.
) .
Several
factors-may
have
contributed
to
the
decreased
net
margins
of
these
cooperatives,
in-
cluding
high
interest
rates,
inflation,
uncertain
nru:keting
conditions,
declining
farm
prices,
over-supplies
of
farm
products,
and
decreased
const.rrption
of
agricultural
equipnent
and
sup-
plies.
An
analysis
of
these
factors
could
offer
sane
insightful
findings
which
could
assist
coop-
eratives
in
initiating
and
developing
appropriate
responses
to
their
specific
economic
problems.
Ho.vever,
there
may
exist
a !!Ore
basic
problem,
the
constraining
provisions
of
the
various
state
cooperative
statutes.
A
revi€117
of
sane
of
the
mandatory
proV1.s1ons
of
the
statutes
of
the
Northeastern
states
suggest
that
these
statutes
are
overly
restrictive.
Is
it
possible
that
the
very
provisions
which
breathe
life
into
coopera-
tives
are
also
operating
to
chcke
their
economic
well-being?
This
article
identifies
and
discus
s
es
four
different
provisions
concerning
cooperative
man-
agement
of
the
various
cooperative
statutes
of
the
Northeastern
states
that
may
be
unnecessarily
limiting
the
management
alternatives
available
to
cooperatives
incorporated
thereunder.
It
is
ar-
gued
that
the
concept
of
cooperation
doe
s
not
re-
quire
the
inclusion
of
these
limitations
in
the
cooperative
statutes
.
In
addition
,
sane
coopera
-
tives
may
have
articles
or
cylaws
that
unneces-
sarily
limit
cooperative
management.
'Ihu
s,
there
exi
s
ts
the
possibility
that
the
economic
perf
o
r-
The
author
is
Assistant
Professor,
Department
of
Agricultural
Economics,
University
of
Georgia,
Athens.
91
ance
of
cooperatives
may
be
strengthened
through
statutory
or
other
changes.
SEPARATE
CCOPERATIVE
STATUTES
The
twelve
Northeastern
states
have
adopted
sixteen
different
sets
of
legislative
provisions
providing
for
the
formation
of
agricultural
coop-
eratives.
These
cooperative
statutes
constitute
a
confusing
and
dis
jointed
bod{
of
state
law
gov-
erning
cooperatives.
At
least
one
statute,
New
York's
Cooperative
Corporat
i
on
Law,
appears
to
be
well
drafted.
'Ihe
provisions
are
within
·
the
spirit
of
the
cooperative
concept
while
at
the
same
time
responsive
to
current
legal
and
econan-
ic
conditions.
The
Connecticut
and
Massachusetts
statutes
are
so
brief
that,
for
the
!lOst
part,
they
are
dependent
on
the
consistent
provisions
of
the
corporation
statutes
which
have
been
spe-
cifically
incorporated
as
applying
to
the
cooper-
ali
ves
formed
thereunder.
'Ihe
remaining
statutes
have
retained
sane
idealistic
cooperative
provi-
sions
which
may
be
contributing
to
cooperative
inefficiency.
The
diverse
and
divergent
provisions
of
the
cooperative
statutes
are
in
nru:ked
contrast
to
present
day
statutory
provisions
governing
cor-
porations
and
partnerships.
The
Model
Business
Corporation
Code
was
laboriously
developed
cy
the
Committee
on
Business
Corporations
of
the
Section
of
Corporations
,
Banking
and
Business
Law
of
the
American
Bar
Association
in
1950.
'Ihis
model
code,
with
its
subsequent
arrendments,
incorpo-
rated
n€117
and
amended
provisions
in
response
to
recent
business
developnents.
It
constitutes
a
modern
set
of
rules
governing
the
rights,
pavers
and
activities
of
corporations
and
has
been
adop-
ted,
with
l!Odifications,
cy
all
of
the
individual
states
(Todd).
The
partnership
laws
have
also
continued
to
evolve
and
incorporate
n€117
provisions
in
response
to
sundry
judicial
and
legislative
pronounce-
ments
.
The
Committee
on
Continuing
Professional
Education
of
the
American
Law
Institute
and
the
American
Bar
Association
have
been
instrumental
in
r
evieNing
and
recarrrending
n€117
provisions
con-
cerning
partnerships.
Their
reports
have
been
made
available
throughout
our
nation
and
state
legislatures
have
therecy
had
the
benefit
of
the
expertise
of
sane
preeminent
legal
minds
when
considering
amendments
to
their
partnership
stat-
utes.
No
similar
developnent
or
legal
evolution
has
occurred
for
the
cooperative
enabling
stat-
utes.
'Ihe
cooperative
statutes
of
the
North-
ea
s
tern
states
have
evolved
fran
statutory
provi-
si
on
for
cooperative
groups
adopted
in
the
second
half
of
the
nineteenth
century
and
fran
the
model
pr
o
vi
s
ions
chanpioned
cy
Aaron
Shapiro
in
the
19
20s
(Cobia
et
al.,
p.
ll7).
Although
a
majori-
ty
of
the
cooperative
s
tatutes
have
been
nru:kedly
arrended,
state
legislatures
have
not
had
the
a
ss
istance
of
ai¥
l!Odel
ccmnission
or
scholarly
group
in
the
retooling
of
the
statutes
to
serve
STATE
COJPERATIVE
STATl11'FS
- CXNFLICI' OF
COOPERATIVE
a::NCEPr
WITH
EFFICIENCY
farmer
cooperatives
better.
COOPERATIVE
a::NCEPr
AND
MANAGEMENI'
The
basic
cooperative
principle
regarding
cooperative
managerrent
is
democratic
control;
the
coopera
t
ive
is
ONned
and
controlled
by
its
mem-
bers
(Abrahamsen). HONever,
all
of
the
North-
eastern
c
ooperative
statutes
recogr.ize
a
severe
limitation
of
this
control.
'Ihe
statutes
provide
either
that
the
affairs
of
the
cooperative
shall
be
managed
cy
a
board
of
directors
or
that
the
cooperative
shall
be
managed
cy
directors
operat-
ing
together
as
a
board.
'Ihus
individual
cooper-
ative
members
do
not
directly
control
the
busi-
ness
operations
of
their
cooperative.
In
an
attempt
to
preserve
membership
control
of
their
cooperative,
various
provisions
concern-
ing
cooperative
management
have
been
incorporated
into
a
majoricy
of
the
Northeastern
cooperative
statutes.
Four
different
managerrent
provisions
that
affect
the
econanic
performance
of
coopera-
tives
may
be
contributing
to
inefficiency:
director
membership
requirerrents,
directors'
con-
trol
of
amendments
to
articles
of
incorporation,
officer
membership
requirerrents
and
officer
renoval
requirerrents
.
Director
Merrbership
Requirerrents
The
directors
of
a
cooperative
are
respon-
sible
for
the
managerrent
of
the
cooperative.
This
managerrent
function
requires
directors
to
perform
definite
functions
while
at
the
same
time
avoiding
excessive
participation
in
day
to
day
management
decisions
(Louden;
Lagges).
A
carpe-
tent,
experienced
and
effective
board
of
direc-
tors
can
be
an
important
factor
in
providing
man-
agement
direction
and
control
which
contributes
to
the
econanic
success
of
the
business
enter-
prise.
For
small
firms,
directors
may
furnish
knew-how
and
expertise
which
the
firm
cannot
af-
ford
to
obtain
through
the
enplcyment
of
consul-
tants
(Jain;
Stckes).
For
large
firms,
there
is
a
need
for
directors
with
substantial
operating
experience
(Lauenstein).
Diversicy
may
also
be
inportant
in
inparting
additional
expertise
for
the
selection
of
a manager
and
for
overseeing
the
firm's
management
direction
(Ferguson
and
Dickin-
scn).
Eight
of
the
Northeastern
cooperative
stat-
utes
have
a
director
menbership
requirement
which
precludes
cooperatives
fran
selecting
as
direc-
tors
qualified
individuals
who
are
not
members
(Appendix
1).
In
addition,
I!1ai¥
cooperatives
contain
membership
requirements
in
their
articles
or
cy
lcrNs.
Statutory
or
other
membership
re-
quirements
are
not
related
to
catpetency,
experi-
ence
or
expertise
but
rather
an
idealistic
belief
that
a
cooperative
should
be
controlled
by
its
members. The
inability
of
cooperative
members
to
select
the
most
qualifed
individuals
as
directors
operates
to
hinder
the
qualicy
of
the
coopera-
tive's
management.
This
in
turn
may
adversely
affect
the
econanic
performance
of
the
coopera-
tive.
The
Pennsy
1
vania
Coaperati
ve
Agricultural
Association
Act
requires
all
directors
to
be
mem-
bers.
The
Maine,
Maryland
and
Ne.w
Jersey
stat-
utes
require
all
directors
to
be
members
of
the
92
cooperative
or
respresentati
ves
of
a member
as-
sociation.
'Ihe
Ne.w
Ha.npshire,
Ne.w
York,
Vermont
and
West
Virginia
statutes
have
a
membership
re-
quirerrent
but
also
allaN
for
one-fifth
of
the
board
to
be
appointed
by
a
public
official
or
other
directors
(Appendix
1)
.
Although
same
consideration
should
be
given
to
the
cooperative
concept
of
membership
control,
it
does
not
follON
that
carplete
control
should
be
legislatively
mandated
(Greenough
and
Clap-
man).
Menbershi p
control
is
an
item
that,
within
certain
parameters,
should
be
determined
cy
each
cooperative
in
its
bylcrNs
or
articles
of
incorpo-
ration.
The
Ne.w
Ha.npshire,
Ne.w
York,
Vermont
and
West
Virginia
statutes
recognize
the
rrertbership
control
concept
while
at
the
same
time
allONing
the
cooperative
to
provide
in
its
bylcrNs
or
arti-
cles
for
up
to
one-fifth
of
the
directors
to
be
nonmembers .
These
statutes
thereby
enable
a
co-
operative
to
have
qualified
nonrrertbers
on
their
boards
of
directors.
The
major
s
hort
coming
of
the
statutes
which
allaN
for
one-f
i
fth
of
the
directors
to
be
non-
members
is
the
inabilicy
of
the
membership
to
elect
the
nonrnerriber
directors
.
All
four
statutes
provide
that
a
public
official
or
the
other
directors
shall
select
the
nonmember
directors.
A more
appropriate
response
might
be
to
designa
·
\:
e
a mmlber
of
directorship
positions
without
mem-
bership
qualifications
with
directors
for
these
positions
to
be
elected
by
the
entire
l!le!1i:>er-
ship.
Director
merrbership
requirerrents
of
coopera-
tives
which
are
not
under
a
mandatory
statutory
provision
should
depend
upon
the
nature
of
the
cooperative.
Recent
authorities
concerning
cor-
porations
suggest
that
a
board
having
a
diverse
background
including
same
business
or
managerrent
expertise
may
be
important
in
providing
for
better
management
(Firstenberg
and
MaJkiel;
Greenough
and
Clapnan;
Jain;
Lagges)
. A
coopera-
tive
that
has
a
director
membership
qualification
in
its
articles
or
cylcrNs
may
want
to
consider
an
amendment
which
-
would
provide
for
nonmember
directors
.
Amendment
of
Articles
Cooperatives
need
to
be
able
to
amend
their
articles
of
incorporation
to
adjust
to
changing
times
and
circumstances.
The
failure
or
inabili-
ty
of
a
cooperative
to
alter
its
articles
may
preclude
the
choices
available
to
management
which
may
contribute
to
inefficiency.
Four
of
the
cooperative
statutes
have
manda-
tory
provisions
requiring
the
approval
of
two-
thirds
of
the
directors
before
the
cooperative's
articles
may
be
amended
by
the
membership
(Appen-
dix
2).
This
supermajority
requirerrent
therecy
constitutes
an
additional
hurdle
which
must
be
cleared
before
a
cooperative
may
amend
its
arti-
cles.
SUch a
requirement
:inpedes
the
ability
of
a
cooperative
to
make
desirable
and
necessary
changes
of
its
articles
which
may
contribute
to
inefficient
business
operations
or
practices.
It
is
not
clear
that
such
a
requirement
needs
to
be
legislatively
inposed
upon
a
cooperative.
If
a
cooperative
desires
the
supermajority
consent
of
its
directors
for
changes
of
its
articles,
it
can
provide
for
such
in
its
articles.
Officer
Menbership
Requirerrents
The
board
of
directors
should
be
able
to
se-
lect
the
most
qualified
individuals
available
as
officers
of
the
cooperative.
Eight
Clf
the
North-
eastern
cooperative
statutes
prevent
directors
fran
choosing
the
best
candidates
for
officer
positions
(Appendix
3).
'lhe
Pennsylvania
Cooper-
ative
Agricultural
Association
Act
has
a merrber-
ship
requirement
for
the
president
and
one
vice-
president.
'lhe
New
York
statute
requires
the
president
and
one
vice-president
to
be
merribers,
or
a member
of
a member
corporation,
and
direc-
tors.
'lhe
Maine,
Maryland,
and
New
Jerse:~
stat-
utes
require
the
president
and
at
least
one
vice-
president
to
be
members
and
directors.
'lhe
New
Hanpshire,
Vermont,
and
West
Virginia
statutes
require
the
two
main
cooperative
officers
to
be
directors,
but
sin
.
ce
up
to
one-fifth
of
their
directors
may
be
norurercbers,
it
would
be
possible
for
these
officers
tc
be
nOI'li'IlE!Ilbers.
These
officer
rnenbership
requirerrents
suffer
an
infirrni
ty
of
a
similar
nature
to
the
director
rnerrbership
requirement.
It
is
unclear
that
the
cooperative
concept
requires
a
legislative
mem-
bership
limitation
regarding
the
offices
of
pres-
ident
and
one
vice-president.
'lhis
requirement
is
one
that
might
better
be
left
for
cooperatives
to
incorporate
in
their
articles
of
incorporation
or
cylc&~s.
At
the
same
time,
cooperatives
that
are
not
incorporated
under
a
statute
containing
an
offi-
cer
rnenbership
requirerrent
may
have
such
require-
ments
in
their
articles
or
cylc&~s.
'lhese
provi-
sions
should
be
analyzed
to
determine
whether
the:{
are
necessary
and
whether
the:{
are
desir-
able.
Officer
Removal
Provisions
Officers
and
directors
have
different
re-
sponsibili
ties;
directors
report
to
the
rnerrber-
ship
while
officers
are
accountable
to
the
board
of
directors.
'!Wo
Northeastern
a::x:>perative
stat-
utes
legislate
the
same
removal
provisions
for
officers
as
for
directors
and
therecy
fail
to
reflect
these
differences
in
accountability
(Apendix
4).
The
New
J
erse:{
statute
allCJNs
two-thirds
of
the
directors
to
remove a rnertber,
director
or
officer
for
cause.
'lhe
two
requirerrents
of
superrnajority
and
cause
severely
limit
the
board's
ability
and
flexibility
in
removing
offi-
cers.
'lhis
limitation
may
adversely
affect
the
management
and
efficiency
of
the
ccoperative.
The
West
Virginia
statute
allCJNs a member
to
bring
charges
against
an
officer
or
director
to-
gether
with
a
petition
signed
cy
five
percent
of
the
rnenbership.
It
may
be
concluded
that
this
statutory
provision
prestmes
that
officers
and
directors
are
accountable
to
the
rnerrbership.
This
is
only
true
for
directors.
'lherecy
the
West
Virginia
provision
fails
to
provide
the
board
of
directors
with
at¥
authority
to
remove
officers.
Effective
and
efficient
cooperative
manage-
ment
is
dependent
upon
the
board's
authority
to
control
the
management
of
the
cooperative.
'lhe
New
Jersey
and
West
Virginia
statutes,
cy
limit-
ing
the
board's
ability
to
remove
officers,
may
prevent
a
board
fran
taking
appropriate
action
to
provide
for
better
managerrent.
93
TERENCE
J.
CENINER
Cooperative
enabling
statutes
should
safe-
guard
the
principles
of
cooperati
vi
sm.
At
the
same
time,
hCJNever,
sane
of
the
ideals
and
demo-
cratic
principles
of
cooperati
visrn enU:x:xlied
in
state
cooperative
statutes
may
be
ircpeding,
erod-
ing
or
destrcying
the
catpetitive
advantage
to
be
achieved
through
cooperation.
Cooperative
prin-
ciples
should
be
reexamined
in
view
of
current
econanic
realities
and
practices
to
determine
whether
saoo
minor
adjustments
might
strengthen
the
econanic
performance
of
cooperatives.
The
statutory
provisions
concerning
director
merribership
requirerrents,
directors
'
control
of
amendments
to
articles
of
incorporation,
officer
rnembership
requirerrents,
and
officer
removal
requirements
have
been
identified
as
four
items
concerning
cooperative
managerrent
that
may
overly
restrict
the
operations
of
Northeastern
coopera-
tives.
It
is
suggested
that
the
amendment
or
repeal
of
these
provisions
would
not
serious]¥
detract
fran
the
concept
of
cooperation
but
would
facilitate
more
efficient
and
effective
coopera-
tive
management.
In
addition,
at¥
cooperative
that
has
chosen
to
incorporate
ai1f
of
these
limitations
in
its
articles
and
cylc&~s
even
though
the:f
are
not
man-
dated
cy
statute
should
analyze
the
possibility
of
amending
these
limitations.
Although
the
mem-
bers
of
a
cooperative
should
be
able
to
control
their
business,
it
does
not
fallON
that
this
con-
trol
must
exclude
others.
'lhe
removal
of
limita-
tions
that
exclude
qualified
persons
from
serving
as
directors
and
officers
would
also
facilitate
better
cooperative
management
which
could
con-
tribute
to
more
efficient
performance.
Abrahamsen,
Martin
A.
terprise.
New
York:
1976.
Cooperative
Business
En-
r-t::Grc&~
Hill
Bode Corrpany,
American
Bar
Association
--
American
law
Insti-
tute.
M:ldel
Business
Corporation
Act,
Corrmit-
tee
on
Business
Corporations,
1950.
American
law
Institute
-
American
Bar
Associa-
tion.
Partnerships:
UPA,
UPIA,
Securities,
Taxation,
and
Bankruptcy,
Corrmittee
on
Continu
ing
Professional
Education
(3rd
ed.
),
1982.
Cobia,
David
w.
et
al.
Equity
Redenption:
Issues
and
Alternatives
for
Farmer
Coopera-
tives,
Agricultural
Cooperative
Service
Re
search
Report
No.
23,
USDA,
1982.
Davidson,
D.R.
and
D.W.
Street.
"Patronage
Re-
funds
Drop
44
Percent
Reflecting
f.a,;er
Margins,
losses."
Farner
Cooperatives,
49(Noverriber
1982):
4-7.
Ferguson,
C.R.
and
R.
Dickinson.
"Critical
Suc-
cess
Factors
for
Directors
in
the
Eighties."
Business
Horizons,
25{1982):
14-18.
STATE
COOPERATIVE
STA'IUl'ES - <XNFLICI'
OF
COOPERATIVE
CXJNCEPT
WITH
EFFICIENCY
Firstenberg,
P.B.
and
B.G. Ma]]<iel.
''Why
Carper-
rate
Boards
Need
Independent
Directors."
Man-
agemmt
Review,
69
(April
1980) :
26-38.
Greenough,
w.c.
and
P.C.
Clapnan.
"'Ihe
Role
of
Independent
Directors
in
Corporate
Governance.
"
Notre
Dame
1awyer,
56(1980):
916-925.
Jain,
S.K.
"I.ock
to
OUtsiders
to
Strengthen
Small
Business
Boards.
"
Harvard
Business
Re-
view,
58(1980):
162-170.
Lagges,
J.
G.
"'!he
Board
of
Directors:
Bocn
or
Bane
for
Stockholders
and
Management?"
Business
Horizons
,
25(1982):
43-50.
Lauenstein,
Milton
C.
Building
and
aperating
an
Effective
Board
of
Directors.
New
York:
'Ihe
Presidents
Association,
1979.
Louden,
J.
Keith.
'Ihe
Director.
New
York:
AMA.COM,
1982.
Mueller,
Robert
K.
New
Directions
for
Directors.
Lexington,
Massachusetts:
Lexington
Bocks,
1978.
Stckes,
J.F.
"Involving
New
Directors
in
Small
Corrpal'¥ Management. "
Harvard
Business
Review,
58(1980):
170-174.
Todd,
Alan
B. (
ed.
) .
'Ihe
Corporation
Manual,
New
York:
United
states
Corporation
Conpany,
1982.
APPENDIX
1:
Statut.ol:y
ProvisiCilS
Restricting
Selection
of
Directors
Maine
-Uniform
Agricultural
Association
Act
---"'Ihe
business
of
the
association
shall
be
managed
cy
a
board
of
not
less
than
3
directors.
The
directors
shall
be
roenbers
of
the
association
or
officers,
general
managers,
directors
or
mem-
bers
of
a member
association
..•
"
Maryland
--
Coc:peratives
"Every
cooperative
shall
have
at
least
five
directors,
at
least
two
of
whan
are
residents
of
the
state
and
each
of
whan
is
a roenber
of
the
co-
operative
or
of
a roenber
cooperative."
New
Harrpshire
-
Coc:perati
ve
Marketing
and
Rural
Electrification
Associations
"'Ihe
business
of
the
association
shall
be
managed
cy
a
board
of
not
less
than
5
directors,
elected
cy
the
rnerrbers
or
stockholders
fran
their
OllTl
number. "
"'Ihe
cyl<Ms
may
provide
that
one
or
more
directors
may
be
appointed
cy
acy-
public
official
or
commission
or
cy
the
other
directors
.•.
Such
directors
shall
not
number more
than
one-fifth
of
the
entire
board.
"
New
Jersey
-
Agricultural
Co-operative
Associa-
tions
"'Ihe
board
of
directors
of
an
association
shall
consist
of
not
less
than
3
persons
and
the
directors
shall
be
roenbers
of
the
association
or
individual
representatives
of
corporate
members
thereof."
94
New
York -
Coq:>erati
ve
Corporations
Law
"
[T]he
roenbers
shall
elect
from
arrong
them-
selves
a
director
or
directors
of
the
first
class
for
a
term
of
one
year;
and
of
the
third
class
for
a
term
of
three
years.
"
"[O]ne
or
more
directors
may
be
appointed
cy
acy-
public
official
or
carmi.ssion
or
cy
the
other
directors
. . .
[and]
need
not
be
rnerrbers
of
the
corporation;
and
shall
not
constitute
more
than
one-fifth
of
the
entire
number
of
directors.
"
Penm;ylvania
-
Coq:>erative
Agricultural
Asscx::ia-
tion
Act
"All
directors
shall
be
members.
"
Vermont
--
Coq:>eratives
---"The
business
of
the
association
shall
be
managed
cy
a
board
of
not
less
than
five
direc-
tors,
elected
cy
the
rnerrbers
or
stockholders
fran
their
OllTl
number. "
"'Ihe
cyl<Ms
may
provide
that
one
or
more
directors
may
be
appointed
cy
acy-
public
official
or
carmi.ssion
or
cy
the
other
directors
. . .
Such
directors
shall
not
number more
than
one-fifth
of
the
entire
board.
"
West
Virginia
--
Coq:>erati
ve
Associations
"'Ihe
affairs
of
the
association
shall
be
managed
cy
a
board
of
not
less
than
five
direc-
tors,
elected
cy
the
rnerrt>ers
or
stockholders
fran
their
OllTl
number • . .
'Ihe
cyl<Ms
may
provide
that
one
or
more
directors
may
be
aFPQinted
cy
acy-
public
official
or
carmi.ssion
or
cy
the
other
directors
. • •
Such
directors
shall
not
number
more
than
one-fifth
of
the
entire
board.
"
APPENDIX
2.
Supernajoricy
Requirement
for
Amendment
of
Articles
New
Jersey
-
Agricultual
Co-operative
Associa-
tions
"'Ihe
certificate
of
incorporation
may
be
amended
cy
the
affirmative
vote
of
a
roajoricy
of
the
rneni:>ers
or
delegates
. • .
if
the
amendment
has
first
been
approved
cy
a
2/3
vote
of
the
direc-
tors
present
and
acting
at
a
duly
constituted
meeting
•..
"
Rhode
Island
-
Producers'
Cooperatives
"'Ihe
articles
of
association
of
acy-
associa-
tion
fonred
hereunder
may
be
changed
or
amended.
Aey
such
change
must
first
be
approved
cy
two-
thirds
(2/3)
of
the
directors
••.
"
Vernont
-
Cocperatives
"An amendment
[of
the
certificate
of
organi-
zation]
must
first
be
approved
cy
two-thirds
of
the
directors
•..
"
West
Virginia
-
Coc:perative
Associations
11
An amendment
[of
the
articles
of
incorpora-
tion]
must
first
be
approved
cy
two-thirds
of
the
directors
.•.
"
APPENDIX
3.
statut.ol:y
Provisions
Restricting
Selection
of
Officers
Maine -
Uniform
Agricultural
Association
Act
---"'!he
president
and
at
least
one
of
the
vice-
presidents
must
be
members
and
directors,
but
a
vice-president
who
is
not
a
director
cannot
suc-
ceed
to
or
fill
the
office
of
president
.•.
"
Maryland
-
Cooperatives
"The
president
and
vice-president
shall
be
elected
fran
am::mg
the
directors."
New
H.anpshire
-
Cooperative
Mal:keting
and
Rural
Electrification
Associations
"The
directors
shall
elect
fran
their
number
a
president
and
one
or
!lOre
vice-presidents."
New
Jersey
-
Agricultural
Co-operative
Associa-
tions
"
The
president
and
vice
president
shall
be
appointed
fran
ai!Ong
the
directors.
"
New
York -
Cooperative
Corporation
law
"The
president
and
a
first
vice-president
shall
be
members
of
the
corporation
or
of
a
mem-
ber
corporation,
and
shall
be
elected
from
ai!Ong
the
directors.
"
Pennsylvania
-
Cooperative
Agricultural
Associa-
tion
Act
"The
president
and
at
least
one
of
the
vice
pr
esidents
must
be
!11E:.
.
ibers.
"
Veri!Ont
-
Cooperatives
"The
directors
shall
elect
fran
their
number
a
president
and
one
or
!lOre
vice-presidents.
"
95
TERENCE
J.
CEN'lNER
West
Virginia
-
Coqlerative
Associations
. "The
director
shall
elect
fran
their
number
a
president
and
one
or
!lOre
vice-presidents."
APPENDIX
4.
Statutory
Provisions
Restricting
Rei!Oval
of
Officers
New
Jersey
-
Agricultural
Co-operative
Assoc
i
a-
tions
"A
member,
director
or
officer
who
is
also
a
director
of
the
association
may,
for
cause,
be
expelled
from
membership
or
rei!Oved
from
office,
by
vote
of
not
less
than
2/3
of
the
di
r
ectors
II
West
Virginia
-
Cooperative
Associations
10
Any
rrenber
may
bring
charges
against
an
officer
or
director
by
filing
them
in
writing
with
the
secretary
of
the
association,
together
with
a
petition
signed
by
five
percent
of
the
merrbers,
requesting
the
rei!Oval
of
the
officer
or
director
in
question.
The
rei!Oval
shall
be
by
a
vote
of
a
majority
of
the
members
•..
"