The Arrowhead Cooperative Board of Directors is asking the Cooperative’s members to approve proposed amendments to the Cooperative’s Articles of Incorporation and Bylaws.
As a not-for-profit electric cooperative, Arrowhead Cooperative is governed by a series of documents, including Articles of Incorporation and Bylaws, that were first established when the Cooperative was founded in 1953. These documents provide a framework for governing and conducting business. As time passes, the energy industry changes, technology advances, and member needs and expectations grow, it is important to periodically review and amend the Articles of Incorporation and the Bylaws in order to remain relevant and effective.
Over the last year, the Board of Directors, Arrowhead Cooperative staff, an attorney, and our auditor conducted a review of the Cooperative’s Articles of Incorporation and Bylaws. The purpose of this review is to ensure that these documents are current, compliant with changes in law, and reflect best practices in the industry. After reviewing these documents line by line and comparing them to Cooperative business procedures, future needs, and industry advancements, necessary alterations were identified and suggested. Alterations are intended to modernize archaic language, increase clarity, simplify where possible, and facilitate the more efficient operation of the Cooperative.
While the proposed amendments have been approved by the current Board of Directors, they cannot be placed into effect without approval by a majority vote of the members that participate in the voting process. This membership vote will take place in conjunction with the Director elections and Annual Meeting on June 4, 2022.
Before your ballot package arrives, we want to ensure that you feel educated to place your vote. While the bulk of changes proposed reflect an update in language and/or grammar to make the Articles of Incorporation and Bylaws easier to understand, the following summaries reflect the most significant amendments:
Removal of Outdated Language and Practices: Any language related to practices that have been discontinued over time by the Cooperative has been removed.
Accounts for Modern Technology: It’s been 20 years since the Bylaws have been reviewed or altered and in that time technology has drastically changed. Language related to how Board of Director meetings are held, member communication takes place, and/or how member votes are made has been updated to include the option of using electronic methods.
Defines Members and Non-Member Patrons: The current Bylaws were written before Arrowhead Cooperative began offering broadband services that are available to subscribers outside of the Cooperative’s defined electric service territory. Language is being added to define who qualifies as a member (those receiving electric service within our electric service territory limits) and non-member patrons (those who receive only broadband service outside of electric service territory limits).
Better Defines Requirements and Responsibilities of Membership: New language reinforces that any entity receiving electric service from Arrowhead Cooperative is considered a member of the Cooperative and therefore bound to the Cooperative’s Articles of Incorporation and Bylaws and afforded the benefit of voting rights and the return of patronage capital (also known as capital credits). The requirements and the responsibilities of membership are also clarified.
Capital Credit Allocation and Distribution to Non-Member Patrons: Broadband services have created significant growth and opportunity for the Cooperative over the last ten years. As this portion of our business approaches positive equity and continues expansion it’s important that the Cooperative’s allocation and disbursement of capital credits remain fair and equitable to all who contribute to the Cooperative’s margins. New language is being added to define how and when patronage capital is returned to non-member patrons (broadband-only subscribers).
Director Tenure: Proposed changes increase director term limits. While the term length of three years will remain intact, directors would be able to run for up to six terms instead of four. Rapid changes in the energy industry and increased demands of directors require Board members to have extensive knowledge and certifications. Increasing terms provide sufficient time to onboard new directors, complete in-depth training and education courses, and allow the Cooperative to benefit from Board member training and experience.
Director Nomination Process: Proposed changes simplify the process for a member to run for a position on the Board by eliminating a complicated committee process and replacing it with a more efficient petition process. Qualified members interested in running for the board would simply submit a petition application including 15 member signatures to be added to the ballot. In the absence of petition applications, the Board of Directors would be allowed to nominate a qualified member to the ballot.
A summary and complete text of the proposed amendments to the Articles of Incorporation and Bylaws recommended by the Arrowhead Cooperative Board of Directors can be downloaded below. In addition, each member will receive this information as part of their ballot package in May. Members will have the option to vote by mail or in person at the Annual Meeting on June 4, 2022.
We are confident these changes will result in increased clarity, more efficient operations at the Cooperative, and better engage our members in the election process. We realize there is a lot of information presented here, so don’t hesitate to reach out to us during business hours at (800) 864-3744 if you have questions or comments regarding the proposed amendments.