NEWS AND VIEWS FROM CHS DIRECTORS INSIGHTS May/June 2017 THIS ISSUE 25 • Moving forward with member certification 26 • Strategically evaluating the company’s assets • Amplifying what makes CHS culture unique • CHS Inc. earnings by segment 27 • Business challenges for young producers • Solutions from Your CHS Experience • CHS Town Hall Meetings 28 • CHS Foundation President Nanci Lilja • CHS Board of Directors in Washington, D.C. MOVING FORWARD WITH The CHS Board has developed a process to certify CHS cooperative membership. At the 2016 CHS Annual Meeting, delegates approved amendments to the CHS Articles of Incorporation and Bylaws that created a new membership class structure. Since then, the CHS Board has been working through how to put that certification process into action. “We know our members are changing to stay relevant to their customers,” says Director David Bielenberg. “This certification process will allow us greater insight into today’s cooperatives.” As of the Dec. 2, 2016, CHS Annual Meeting, all current member cooperatives were placed into the Class C member category. Class C members are voting eligible (provided they satisfy the minimum annual business threshold for voting rights) and eligible to receive patronage. Class C member cooperatives will stay within that class unless they have experienced one of the three following triggering events since Dec. 2, 2016: • a merger or other change in control • reduction in the percentage of voting MEMBER CERTIFICATION members of its board of directors who are producers of agricultural products (as defined in the CHS Articles of Incorporation) • change in policies, procedures or governance documents to permit non producers of agricultural products to have voting power Going forward, Class A member cooperatives must have 100 percent agricultural producers as voting members and as voting members of their board. They will be eligible to receive patronage from CHS and will be eligible for voting rights (provided they satisfy the minimum annual business threshold for voting rights). CHS has also developed a process to review individual producer membership in Class A through its Country Operations division. Class B member cooperatives will be organizations that operate on a cooperative basis but cannot qualify for Class A membership (usually, because they have non-producers on their board or as voting members). They will be eligible to receive patronage but will not be eligible for voting rights. Because all current member cooperatives were assigned to Class C, the certification process is initially focusing on that class. Starting in April, and continuing through the summer, CHS has been reaching out to its Class C member cooperatives to complete the certification process. “This certification process will allow CHS to recognize the strong heritage of member cooperatives who built CHS while also acknowledging the ways our members are doing business today,” says Steve Riegel, board member and chair of the governance committee. Information during the certification process is being gathered by Survey and Ballot Systems (SBS) on behalf of CHS through an electronic form. If you have questions about this process, please call (800) 323-8927 or email CHSMemberCertification@chsinc.com. If you are a general manager of a member cooperative and haven’t yet received an email or letter about certification, please contact us at the email address above. Your CHS Connection 25 25
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