Future Business Leaders of America (FBLA) Agribusiness Practice Test

Who controls a cooperative?

1. Shareholders

2. External managers

3. Its members

4. A board of shareholders

The correct answer is: Its members

In a cooperative, the members play a central role in controlling the organization. This structure is rooted in the principle of democratic member control, where each member typically has one vote regardless of the amount of capital they have contributed to the cooperative. This system empowers members to participate in decision-making processes, ensuring that the cooperative operates in their best interests. The cooperative's members elect a board of directors from among themselves to oversee the operation and management of the cooperative, but ultimately, the authority and control lie with the members. This contrasts with other organizational structures where external managers may have greater control or where shareholders have voting power proportional to their investment. The cooperative model emphasizes collective action and community benefits, making the engagement of its members crucial to its governance and success.