2016-09-05 02:04:00
CHS OWNERS LEARN ABOUT
PROPOSED AMENDMENTS TO ARTICLES AND BYLAWS
The CHS Board of Directors was out in full force all summer to ensure member-owners are well informed on proposed amendments to the CHS Articles and Bylaws that address membership eligibility criteria.
“Our priority is making sure everyone understands the proposal and has the information they need to make an informed choice when they vote at the annual meeting in December,” says CHS Board Chairman David Bielenberg. “The board spent considerable time since the 2015 annual meeting listening to our owners and taking their feedback into consideration in developing these proposed amendments.”
To date, CHS directors have presented the proposal to more than 700 owners during special sessions at 10 recent Your CHS Town Hall meetings, as well as to a variety of other local and state member-cooperative events. More than 1,100 have viewed an informational video and nearly 1,000 have visited the governance page on the CHS website.
Delegates to the 2015 CHS Annual Meeting voted to indefinitely postpone consideration of amendments that were recommended fall 2015, which proposed changes in the CHS membership definition, as well as other portions of the CHS Articles and Bylaws. In early June 2016, the CHS Board introduced proposed amendments to the articles and bylaws that pertain solely to membership definitions.
“We think the membership-focused amendment proposals make sure CHS remains an agricultural producer-focused and governed cooperative, but also value our long-term members and respects their contributions to the success CHS has had,” Bielenberg says.
Steve Fritel, chair of the CHS Board’s Governance Committee, says thus far “as we’ve attended the Your CHS Town Halls, we’re seeing a favorable reaction from our owners. They have questions, but many have said they appreciate the CHS Board’s commitment to listening to their concerns. By meeting with members beyond our home turf, we’re able to understand their perspectives, share with them the thoughts of owners from other geographies and ultimately tell a broader story.”
Fritel was among several CHS directors who attended Your CHS Town Hall meetings at locations outside their home regions to gain broader perspective.
LEARN MORE
To learn more about proposed amendments to the CHS Articles and Bylaws:
• Contact a CHS director; a list appears on chsinc.com
• Review materials available on the chsinc.com Governance page including overview information, frequently asked questions and an informational video
• Watch for delegate materials sent to voting eligible owners in October 2016, which will include official voting materials on the proposal
• Join a live educational webcast on Nov. 4 at 10 a.m. (CST). A link will be available on chsinc.com (also available online for later viewing)
• Attend an informational breakout session on Dec. 1, at the 2016 CHS Annual Meeting
Get “The Essentials” at 2016 CHS Annual Meeting
CHS member-owners will see some fresh approaches to the 2016 CHS Annual Meeting, but they can still count on The Essentials: learning, networking and company insights.
This year’s annual meeting takes place Dec. 1-2 at the Minneapolis Convention Center. Day one features an expo area packed with interactive opportunities to learn how CHS is helping member cooperatives and producers grow. CHS experts will also share essential knowledge during dozens of learning sessions. The general session opens with keynote speaker Peter Zeihan, a geopolitical strategist who will provide his global perspective on energy, agriculture and more to help CHS owners see businesses and industries from a new point of view. The day wraps up with a reception for all attendees.
Company governance, reports on fiscal 2016 highlights from the CHS board and management, and an opportunity to ask questions will be the essential elements of the meeting’s second day.
Visit chsinc.com/annual-meeting for more details. Registration materials and delegate information will be available in October.
Focus on Leadership at 2017 Your CHS Experience
Cooperatives directors, CEOs and general managers won’t want to miss Your CHS Experience Cooperative Leadership Conference in early February 2017 in Las Vegas, Nev. Engaging speakers and CHS leaders will offer insights on how you can elevate your cooperative’s performance during all economic cycles.
It’s also a great opportunity to network with cooperative boards and management from across the system. Additional information will be emailed and is available on chsinc.com.
CHS BOARD GETS UP CLOSE IN KANSAS
The CHS Board of Directors got a firsthand look at company operations and learned what was on the minds of area member- owners during its four-day visit to Kansas in early June.
Each year, the CHS Board spends its June meeting week touring a region of importance to CHS with a goal of gaining insight on owners, industry outlook and other information. During this year’s trip, directors participated in Your CHS Town Hall meetings in Kansas City and then bused to central Kansas where they toured the CHS McPherson petroleum refinery, the Processing and Food Ingredients plant at Hutchinson, and the Producer Ag, LLC, grain shuttle facility at Canton, which is a joint venture between CHS and member-cooperative MKC.
“This annual trip is a great opportunity to get out of the boardroom, to visit our owners and others, and to gain real-life perspective,” says CHS Director C.J. Blew, of Kansas. “Even though this is my home state, it was invaluable to join the entire board to personally see some of the investments CHS has made on behalf of our owners and learn about industry issues from our facility employees and area owners. We always gain knowledge we can take back to the boardroom.”
CONNECTING WITH GENERATION NEXT
Who will be this system’s next generation of customers? Owners? Directors? Agricultural spokespeople?
The CHS Board and leadership are working to help next generation producers understand the value of the cooperative system to the current and future success of their farm and ranch operations. Recent efforts include small-group sessions for young producers in conjunction with recent Your CHS Town Hall meetings, as well as including several next generation farmers and ranchers in a recent slate of meetings in the nation’s capital.
CHS Director Randy Knecht, who helped host a small group session at the Sioux Falls, S.D., town hall, says meeting with next generation producers is an important opportunity to educate. “We need to continue telling the cooperative value story of ownership, governance, patronage and more,” Knecht says.
“CHS is a pretty big company and when Carl (Casale) came down to Iowa, it felt like you're talking to your local co-op manager rather than the CEO of our company,” says Nate Schulte, a member of Cooperative Energy, Sibley, Iowa, who attended the Your CHS Town Hall and the CHS Board's next generation producer session. “I liked how open everyone was and appreciated the opportunity to sit there with them and ask questions in a more casual way.”
Knecht adds, “In the long run, the assets we've invested in today are going to benefit their farming operations long-term. That's the story we have to tell."
Heidi and Erik Salm, past CHS New Leader Forum attendees and member-owners through CHS Larsen in eastern Wisconsin, say joining CHS directors and leaders in Washington gave them a greater appreciation of the importance of being involved.
“We definitely gained a deeper understanding of how politics in Washington, D.C., works,” Heidi Salm says. “Without actually going there and experiencing it firsthand, there is no way to know how that whole process actually happens.”
Adds Erik Salm, “When we got home we decided to start a group through our local co-op for young producers age 35 and under. And it is all about advocating for agriculture.”
Perry Meyer of Minnesota says he and the other CHS directors found it rewarding to introduce young producers to the value of advocating on behalf of agriculture and cooperatives.
“Being with them and seeing the light go on about the importance of what they were doing was great,” he says. “They were able to learn how important it is for us as farmers to voice our opinions in person with our senators and representatives. It was a real eye-opener for them.”
Knecht adds that the Washington, D.C., visit really brings the value of being a cooperative owner to life. “One of the producers said he didn’t realize the important voice we are for them with elected officials.”
ENGAGING THE NEXT GENERATION
ENGAGING YOUNG FARMERS IN POLITICAL ADVOCACY
70% of young farmers have a negative view of the government’s impact on their business
Source: NCFC (2014)
64% of CHS New Leader attendees are interested in learning more about public policy & advocacy
CHS NEW LEADER PROGRAM: CULTIVATING THE NEXT GENERATION
92% Have a greater understanding of CHS commitment to helping its member-owners grow
88% Have a greater sense of pride in the cooperative system they own
56% Have a much higher interest in serving on a board
WHAT IS THE NEXT STEP FOR ME TO SERVE ON MY BOARD?
Likelihood of seeking a board seat in the next 5 years
40% Likely or very likely
ALAN HOLM Director, Minnesota
“I’m always impressed by the personal stake CHS owners have in the company. They want to make sure this proposal reflects what they think is important.”
DON ANTHONY Director, Nebraska
“With this proposal, we have a very clear, consistent message for our owners focused on one issue. That’s being well received.”
ED MALESICH Director, Montana
"Our owners are very appreciative of the time we took to listen and gather feedback, including the survey.”
GREG KRUGER Director, Wisconsin
“Member cooperative leaders are telling us they're glad that this proposal would give member-owners a choice in how they govern their own cooperative.”
CHS ARTICLES AND BYLAWS UPDATE
As the CHS Board has reviewed the proposed amendments to the company’s Articles and Bylaws with member-owners, questions have been raised regarding what actions CHS may take to have members certify ongoing membership class eligibility. As it continues discussions on the issue, the CHS Board has outlined a framework for our approach.
Can CHS provide more information on how members will certify their class eligibility?
If the proposed amendments are adopted, CHS will have four different membership classes, of which only Class A, Class B and Class C are intended to have members. The Defined Member Class has no members and CHS does not intend to use that membership class.
Class A, Class B and Class C have very different membership requirements. CHS requirements and processes for member certification activities will align with each Class’s membership requirements. We would not use a “one-size-fits-all” approach and we would limit our process to the information needed to confirm ongoing eligibility for each membership class.
The CHS Board has not yet decided on member certification requirements. However, it is likely that the information CHS would require from a member’s certification would align with that member’s membership class eligibility requirements.
How does CHS define “Producer of Agricultural Products”?
Today, CHS Articles of Incorporation, Article IV, Section 2 states that:
“Producers of agricultural products” shall mean: “persons (including individuals and joint ventures, corporations, partnerships, limited liability companies, limited liability partnerships, unincorporated associations or other legal entities owned or controlled by individual farmers, ranchers or their family groups) that are engaged in the production of one or more agricultural products, including tenants of land used for the production of such products and lessors of such land that receive as rent therefor any part of the product of such land.”
The proposed amendments do not include any changes to this definition.
How often will CHS require member certification?
The CHS Board has not decided any certification procedures. The CHS Board will establish a certification frequency that will achieve the purpose of certifying ongoing membership eligibility, while balancing the effort and time required to provide the certification.
Under what circumstances would CHS take its own steps to verify a member’s certification?
The CHS Board has not yet made a decision on this topic. Generally, CHS believes the membership eligibility requirements for each membership Class are specific enough that CHS members in each Class will have the specific knowledge/information to complete a certification accurately. CHS also believes that members will complete any required certification accurately and based on current information. At the same time, taking periodic actions to verify member’s certification helps maintain strong governance.
HIGHLIGHTS OF PROPOSED CHANGES
The proposed amendments would create new CHS membership classes:
• Class A for eligible individual agricultural producers and associations of agricultural producers. Class A cooperative associations must have 100 percent agricultural producers as voting members and as voting members of their boards. Class A members would have voting rights and be eligible to receive patronage.
• Class B for organizations operating on a cooperative basis that do not meet Class A criteria, typically because they have either non-producers as voting members or non-producers as voting directors. Class B members would be eligible to receive patronage, but would not have CHS voting rights.
• Class C for all the cooperative associations who are CHS members as of the date of the CHS 2016 Annual Meeting. The CHS Bylaws would retain references to the Defined Member class, although that program has been discontinued.
If CHS members approve the proposed amendments at the 2016 annual meeting, all current individual producer members would automatically become Class A members. All current cooperative association members would automatically become Class C members and remain there until they experience one of the triggering events listed in the proposed amendments.
CHS MEMBERSHIP CLASSES (PROPOSED)
CLASS A
• Ag producers • Cooperatives 100% ag producer-governed • Voting eligible • Patronage
CLASS B
• Organizations operating on a cooperative basis • Patronage only • Non-voting
CLASS C
• Cooperative association members at time of 2016 CHS Annual Meeting • Voting eligible • Patronage
DEFINED MEMBERS (NO CURRENT MEMBERS)
Published by CHS Inc. View All Articles.
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