For the board to know its role and its duty to the co-op it must first know what is required of it by law. Directors have the legal duties of care and loyalty, and must act prudently, always in the co-op's best interests.

That's not just advice. You'll find language like that in the laws that govern the conduct of directors of corporations-all kinds of corporations. There are many other statutes that can affect their actions-those having to do with employment conditions for example. Directors also have what are called common-law duties. Common law is law that's based on custom, usage and rulings by courts, not on acts or regulations made by governments.

This isn't a legal guide so we won't go through all the legal requirements of co-op directors. Federation education programs will cover the legal duties of directors in their board training workshops. You can also have a look at the "Meeting Legal Requirements" section in the Resource Centre on CHF Canada's website. And if you type legal duties of directors into your internet browser you'll get a lot of resources popping up. But we can say this here: acting ethically as directors isn't just something we do voluntarily. The law requires it.

Here are signs that your board is aware of its legal duties:

• the board takes training that includes information about its legal duties
• the directors sign ethical conduct agreements that set out their duties of care and loyalty.