Proceeding No. 18F- 

Attachment A
Page 1 of 2

A Touchstone TX

C(mpernr ive

Fiduciary Duties of
Cooperative Directors


Director Orientation
December 2013

 

Proceeding No. 18F- 

Attachment A
Page 2 of 2

?Dual Directors? 

When serving on the Board of a distribution cooperative, the Director's
fiduciary duties are to the distribution cooperative.

When serving on the Board of a the Director's fiduciary duties
are to the AND to the distribution cooperative.

The Board of Directors of a is not a representative democracy
where each Director's responsibility is to represent the interests of his
or her distribution cooperative.

The Director must discharge his or her fiduciary duties in the best
interests of the however, the Director still owes duties to his or
her distribution cooperative.

At times, this may result in the Director taking differing positions on
each Board based upon his or her good faith beliefs and the discharge
of his or her fiduciary duties.

The Dual Director must manage his or her participation on both
Boards and his or her actions so as to preserve his or her ability to
discharge the duties separately owed to each entity.

A Dual Director who cannot in good faith discharge his or her fiduciary
duties to both the distribution cooperative and the must decide
whether it is necessary to recuse himself or herself from certain Board

actions or resign from one or both Boards. 12