Your co-operative’s board of directors is the primary steward of the business and is responsible for the company’s well-being. This means they’re responsible for ensuring the co-op complies with applicable laws, meets required standards, and that the work of the co-op is completed. This is true whether the board does the work of the co-op itself, or hires managers and other staff to run the co-op.
Directors need to prioritize the interests of the co-operative, because as directors they have a fiduciary duty to the co-op. In short, you’re responsible for the co-operative’s affairs.
Consider this question:
If the co-operative fails to remit GST on its sales, who becomes liable for those unpaid sums if the co-op doesn’t have the cash to cover the payment?
That’s right – it’s the individual board members.
A board can protect itself from liability by making sure the co-op is complying with all necessary regulations and laws.
As your co-op grows, the board will usually step back from operations and hand things over to a manager. Even though you might not be doing the day-to-day work, the board is still responsible for ensuring that work gets done and that regulations and laws are followed. One strategy for holding management accountable and protecting the board is a compliance checklist or compliance certificate.
A good strategy is to have your co-op’s management team sign off on a compliance checklist at each quarterly board meeting (or less frequently if appropriate). If you’re still a working board (without a management team), you can use this checklist yourself to ensure you stay on top of all your responsibilities.
Feel free to copy the compliance checklist below, and adapt it to your co-operative’s unique needs, structure, and operating environment. And be sure to update the checklist regularly to reflect any changes to your operations or reporting.
Sample Compliance Checklist
Remitting sales taxes, payroll source deductions, and corporate taxes: I confirm that the Co-operative has remitted all necessary taxes to the appropriate agencies and is compliant with all taxation requirements.
HR and labour laws: I confirm that the Co-operative is compliant with all applicable labour laws and that staff are treated fairly and with respect, including adhering to wage requirements, overtime regulations, workplace safety, the HR policy set by the Board, and employment standards.
Workplace health and safety: I confirm that all appropriate steps are taken to ensure the workplace is safe for all employees, suppliers, and customers. There has been sufficient staff training on safety policies, provision of safety equipment, and necessary signage to maintain a hazard-free workplace.
Financial management and accounting: I confirm that the appropriate measures are taken to ensure prudent financial management and oversight of the Co-operative’s funds, including working with an external bookkeeper, following all financial policies set by the Board, adhering to generally accepted accounting practices, and taking due care of the Co-operative’s financial well-being.
Environmental regulations: I confirm that the Co-operative is compliant with all applicable environmental regulations and has taken steps to reduce the environmental impact of our operations.
Risk management: I confirm that due care and diligence are taken when identifying the risks in the Co-operative’s operating environment, and that those risks are addressed with appropriate mitigation or management strategies, including holding the appropriate insurance, conducting regular risk assessments, and, when necessary, consulting legal professionals.
Reputation and communications: I confirm that measures are taken to uphold the communications standards set by the Board and any risks to the Co-operative’s reputation are addressed, including appropriate staff training, seeking external expertise when appropriate, and consulting the Board on sensitive matters.
Co-operative regulations and values: I confirm that the Co-operative has upheld the standards set out in the Co-operatives Act, including maintaining the appropriate records, filing all necessary reports with government agencies, and meeting the standards set in the Co-operative Basis.
I ____________________________________ confirm these statements to be true and that the Co-operative remains compliant with the laws and standards set by applicable legislation, regulatory agencies, and the Board and membership of the Co-operative.