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Board of Directors

401 Number and General Powers

The business and affairs of the Cooperative shall be managed by a Board of Directors of nine (9) or less directors who reside in the following locations: (a) two (2) directors who reside in the following specific location within the Mandan area: an area bounded by the Morton/Oliver county line on the north, the Missouri River on the east, Highway 25 on the west to I-94, then I-94 east to township line 81, also known as 24th Avenue, then south to County Road 138A, then east on a straight line to the Missouri River; (b) two (2) directors who are residents of Morton County, but not residents of the Mandan area described in (a); (c) two (2) directors who are residents of Grant County; (d) two (2) directors who are residents of Sioux County; and (e) one (1) director at-large. The Board of Directors shall exercise all of the powers of the Cooperative except such as are by law or by the Cooperative's Articles of Incorporation or Bylaws conferred upon or reserved to the members.

(Amended Annual Meetings 09/13/02; 07/20/07)

402 Director Qualifications

To be eligible to become or remain a director of the Cooperative the person must be (1) a natural person of at least eighteen (18) years of age and reside in the counties served by the Cooperative; (2) a member in good standing of the Cooperative; (3) a continuous purchaser of residential electric services from the Cooperative for not less than 12 months prior to nomination; and (4) not a felon, either as a result of a plea or conviction. No person shall be eligible to become or remain a director of the Cooperative who is either currently, or for three (3) years prior, been employed by the Cooperative or in any way employed by or financially interested in a competing enterprise, or a business selling electric energy or supplies to the Cooperative, or a business primarily engaged in selling electrical appliances, fixtures or supplies to the Cooperative or its members.

Upon establishment of the fact that any person being considered for, or already holding, a directorship lacks eligibility under this section, it shall be the duty of the Board of Directors to withhold such position from such newly elected director and, for a director already holding a directorship, the Board shall either remove the person or submit the issue of removal to the vote of all members. Nothing in this section shall be construed to affect in any manner whatsoever the validity of any action taken at any meeting of the Board of Directors.

403 Nominations

The Board of Directors shall appoint a nominating committee of not less than five (5) nor more than nine (9) members, who shall be selected so as to give equitable representation on the committee for the geographical areas served by the committee. No director or employee of the Cooperative shall be a member of the nominating committee. The board shall have the discretion to nominate committee members for three-year staggered terms.

The role of the nominating committee shall be to recruit qualified and willing candidates to be submitted to the Board for inclusion on the ballot. The Board shall select a deadline by which the committee must submit its list of candidates to the Board, which deadline shall be at least sixty (60) days before the date of the annual meeting in order to allow for adequate publication and notice.

The Board shall also set a deadline by which all candidates must provide to the nominating committee a written Declaration of Candidacy form stating their willingness to run for a position and affirming their qualifications to run. All qualified and willing candidates will be included in the list of nominations submitted to the Board. Upon confirmation of eligibility, the Board will include all willing and qualified candidates on the election ballot.

(Amended Annual Meeting 08/19/04)

404 Tenure

Each Board of Directors member shall hold three (3)-year terms, with three (3) or less directors elected each year, unless there are additional vacancies to be filled by the members under Section 407 of these Bylaws. Directors shall be elected by all Cooperative members at the annual meeting either in person or by mail vote.

Upon their election, directors shall, subject to Section 406 on the removal of directors, serve until the annual meeting of the members of the year in which their term expires or until their successors shall have been elected, qualified and begun their term of office.

All directors shall be limited to six (6) consecutive three (3) year terms after which time they shall not be eligible for another term of office as a director until one (1) year has elapsed, at which time the director shall be eligible to serve another six (6) consecutive three (3) year terms.

(Amended Annual Meeting 07/22/05)

405 Director Conflict of Interest

Directors shall recognize that they occupy a place of trust and should not create a position in which self interest conflicts with any duty the directors owe to the Cooperative and its membership. No director shall be permitted to make a profit from any self-dealing transaction, whether individually or acting as an agent, without affirmatively fully disclosing the same and engaging in arms-length fair dealing with the Cooperative.

Any director who actually or potentially is involved with a self-dealing matter, shall make full disclosure of the interest, shall not vote on the matter, and shall leave the board room during the discussion of the matter unless requested to stay in the board room during discussion. Such director shall not vote upon such matter and shall not be counted as a part of the quorum for the vote on the matter. The minutes of the meeting shall reflect that a disclosure was made and that the director having a conflict of interest did not participate in the discussion and abstained from voting.

406 Removal of Directors by Members

Any member may bring one or more charges for cause against any one or more directors and may request the removal of such director(s) by reason thereof by filing with the Secretary such charge(s) in writing together with a petition signed by not less than ten percent (10%) of the total membership of the Cooperative, which petition calls for a special member meeting, the stated purpose of which shall be to hear and act on such charges and, if one or more directors are recalled, to elect their successor(s), and specifies the place, time and date thereof not less than forty (40) days after filing of such petition, or which requests that the matter be acted upon at the subsequent annual meeting.

Each page of the petition shall contain in the beginning: the names and addresses of the members filing the charges, a verbatim statement of such charges, and the names of the directors against whom such charges are being made. The petition shall be signed by each member in the same name as billed by the Cooperative and shall state the signatory's address as it appears on the billings.

Notice of such charges verbatim, the name of the directors against whom such charges are made, the name of the member filing such charge, and the purpose of the meeting shall be contained in the notice of the meeting not less than ten (10) days prior to the meeting date at which the charges will be heard. Such directors shall be informed in writing of the charges after they have been validly filed and at least twenty (20) days prior to the meeting of the members, and shall have an opportunity at the meeting to be heard in person, by witnesses, by counsel or any combination of such, and to present evidence in respect of the charges; and the persons bringing the charges shall have the same opportunity but shall be heard first. The question of the removal of such directors shall separately be considered and voted upon for each director. A two-thirds ( ) vote of those present and voting is necessary for removal. Any vacancy created by such removal shall be filled by vote of the members at such meeting and shall fill the unexpired term. The nominating committee process described in Section 403 shall not be followed in filling a vacancy created by a removal.

Directors may only be removed for just cause and only if evidence was presented during the meeting to support the charges. Just cause shall be defined to include, but not be limited to, grossly negligent, fraudulent, or criminal acts, the regular failure to attend meetings, malfeasance, conflicts of interest, misappropriation of Cooperative funds, and other examples of incompetent job performance.

407 Vacancies

Subject to the provisions of these Bylaws with respect to the filling of vacancies caused by the removal of directors by the members, a vacancy occurring in the Board of Directors shall be filled by the Board of Directors by appointment of a member from such district until the next annual meeting of the members. If the vacancy occurs within ninety (90) days prior to the annual meeting, the vacancy shall only be filled by election at the annual meeting for the remaining unexpired term, and the nominating procedure of Section 403 of these Bylaws shall be followed.

408 Director Compensation

Directors as such shall not receive any salary for their services, but by a resolution of the Board of Directors, may receive on a per diem basis, a fixed fee: (1) for attending meetings and committee meetings of the Board of Directors and, (2) when such has had prior approval of the Board of Directors, for the performance of other Cooperative business, including conferences and educational meetings. Directors shall also receive reimbursement of any travel and out-of-pocket expenses actually, necessarily and reasonably incurred in attending such meetings and performing such business. No director shall be compensated for expenses incurred in traveling from any point outside of the service area to attend any meeting of the Board of Directors. No director shall receive compensation for serving the Cooperative in any other capacity, except compensation for officers as the Board of Directors may decide. Nor shall any close relative of a director receive compensation for serving the Cooperative, unless payment of and the amount of such compensation shall be specifically authorized by a vote of the membership. As used in the Bylaws, “close relative” means a person, who, by blood or in law, including step and adoptive kin, is either a spouse, child, grandchild, parent, grandparent, brother, sister, aunt, uncle, nephew, or niece of the principal.

409 Rules, Regulations, Rate Schedules and Contracts

The Board of Directors shall have power to make, adopt, amend, abolish and promulgate such rules, regulations, rate schedules, policies, and contracts not inconsistent with law or the Cooperative's Articles of Incorporation or Bylaws, as it may deem advisable for the management, administration and regulation of the business and affairs of the Cooperative.

410 Accounting System and Reports

The Board of Directors shall cause to be established and maintained a complete accounting system of the Cooperative's financial operations and condition, and shall, after the close of each fiscal year, cause to be made a full, complete and independent audit of the Cooperative's accounts, books and records reflecting financial operations during, and financial condition as of the end of, such year. A full and accurate summary of such audit reports shall be submitted to the members at or prior to the succeeding annual meeting of the members. The Board of Directors may authorize special audits, complete or partial, at any time and for any specified period of time.

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