A mandatory training for cooperatives

1. Policy
Development

3. Topic Outline

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What is a policy?
Importance of policies
The role of policies
Policy goals
Policy formulation and processes
Policy content
Policy constraints
Who makes policy?
Causes of bad policy
Communicating Policy

4. Objective
To be able to formulate
effective and
acceptable policies for
implementation

5. 
Effective Formulation means that the
policy proposed is regarded as a valid,
efficient, and implementable solution
to the issue at hand

Acceptable Formulation means that
the proposed course of action is likely
to be authorized by the legitimate
decision makers, usually through
majority-building in a bargaining
process

6. Many people think of organization policies in a
negative light which is a means to control
employee behavior. However, there is a more
positive side to policies. They can actually
empower employees. It is true that many policies
seem restrictive in nature and many need to be to
promote good internal control however, policies
also provide staff with a degree of freedom within
defined boundaries. With good policies in place,
staff is able to execute their duties and are free to
act within the limits set by policy without
constant managerial oversight. In that way,
policies empower staff to do the right thing.

7. What is a policy?
POLICY is to guide the actions of all
persons involved or connected with the
cooperative in regard to any area of
activity in which the cooperative has
jurisdiction. Policies are guidelines for
directors, committee members,
employees and members

8. What is a policy?
 The existence of practical and
comprehensive policies tends to increase
efficiency
Decisions made within a policy framework
have a higher probability of being
synchronized with other decisions within
the cooperative

9. What is a policy?
 A policy is a predetermined course of
action established as a guide toward
accepted objectives.
 A policy is a statement, verbal, written or
implied, of those principles and rules
that are set by Board of Directors as
guidelines on organizations actions

10. Importance of Policies
In some cases policies must be observed
(mandatory) while in other cases
policies serve as only as guidelines
(advisory) for the ethical, strategic,
operational.

11. The Role of Policies
• Provide specific guidance toward
implementing strategies to achieve the
cooperative’s vision
• Provide general guidance about the
cooperative’s mission
• Provide a mechanism to control the
behavior of the cooperative
• Enable the management to relate properly
to the organization’s work and its objectives

12. Vision
Statement
“what we
want to
become”
Mission
Statement
“who we are
What we
value”
Goals &
objectives
“How we measure
our degree of
success
Strategy
“how we will
achieve our
vision”
Communicating Purpose to Stakeholders
Policies &
Procedures

13. Policy Goals
A policy is not formulated unless it is
thought to be necessary or to have a
benefit. In other words the policy exists for
a purpose and this may be often expressed
in the form of an "underpinning
principle".

14. Policy
1. Gender Equality
Policy
2. Quality
Customer Service
Policy
Underpinning Principles
Equality and coexistence of men
and women
Increase satisfaction of
members/customers and
encourage membership renewal
3. Social
Responsibility
Policy
Concern for the Community

15. Policy
Legal Basis
1. Policy on
Savings
Mobilization
and Capital
Build Up
"ART. 6. Purposes of Cooperatives. A cooperative may be
organized and registered for any or all of the following
purposes
"(1) To encourage thrift and savings mobilization among the
members;
"(2) To generate funds and extend credit to the members for
productive and provident purposes
2. Loan Policy
"ART. 7. Objectives and Goals of a Cooperative. The primary
objective of every cooperative is to help improve the quality of
life of its members. Towards this end, the cooperative shall aim
to:
"(a) Provide goods and services to its members to enable them
to attain increased income, savings, investments, productivity,
and purchasing power, and promote among themselves
equitable distribution of net surplus through maximum
utilization of economies of scale, cost-sharing and risk-sharing;
"(b) Provide optimum social and economic benefits to its
members;

16. Policy
3. Policy on Social
Responsibility
Legal Basis
This is in full compliance of Section 2 Rule 8 of the
Implementing Rules and Regulations (IRR) of RA
9520, otherwise known as the Philippine Cooperative
Code of 2008.
Social audit is a procedure to assess the cooperative
social impact and ethical performance vis-à-vis stated
mission, vision, goals and code of social
responsibility. This will serve as a control mechanism
to account for the social performance and evaluate
the coop’s impact in the community taking into
account the community development fund.
4. Ethics and Conduct Section 10 Function and Responsibilities of the Ethics
Policy
Committee, By-Laws
Recommend ethical rules and policy to the BOD;

17. Policy Formulation and Processes
Crafting a mission
and vision is not
easy, it helps to
follow the right
steps.

18. Vision Mission Objectives, Policies
and Policies/Procedures
Policies
/Procedure
Strategic
Objectives
Mission
Vision

19.  Both statements
should be meaningful
to all in the
organization.
 It should be shared
to all members to
create a unified
direction for everyone

20. Vision
A vision statement
is a futureoriented
declaration of the
organization’s
purpose and
aspirations

21. Vision Statement
“ We envision ourselves to be the
best, efficient and productive
cooperative, dedicated and
committed in bringing prosperity
and positive transformation to its
members and the community”.

22. VISION
The best economic and social cooperative center in
Luzon
MISSION
 To pursue sustainability by providing quality and affordable
financial products and services responsive to members needs
in a gender fair environment.
 To deliver complementary solutions in enriching the lives of
members and communities.
 To ensure employees satisfaction for professional growth and
advancement.
To promote good environmental stewardship through
innovative programs, projects and socially responsive
services

25. VISION
VISION
A Globally Competitive and Gender Fair Credit
Cooperative
MISSION
The TUBAO CREDIT COOPERATIVE, a prospering and
growing institution uplifting the socio-economic
conditions of the members through its various gender
responsive financial products and services.

26. From a well written mission statement
objectives can be set and from
objectives, policies can be created. Just
as a mission or vision for your
organization is a prerequisite to policy
development, so too are strategic
objectives. Objectives are like goals. They
direct the staff’s attention to important
factors in running the organization and
help define unique ways to enhance
performance of individuals and the
organization as a whole.

27. STRATEGIC MANAGEMENT MODEL
VISION
ENVIRONMENTAL
ANALYSIS
STRATEGY FORMULATION
MISSION
OBJECTIVES
STRATEGY IMPLEMENTATION
EXTERNAL
STRATEGIES
•OPPORTUNITIES
•THREATS
INTERNAL
•STRENGTHS
PROGRAMS
PROJECTS
PROCEDURES
BUDGETS
•WEAKNESSES
F E E D B A C K
PERFORMANCE

29. Steps in Policy Development
Research and consultation are key step in
the process. A sound policy is built upon good
consultation with those who will be affected
by the policy.

30. Steps in
Policy
Development

31. 1. Issue Identification and
Definition
Identify and define the
problem or issue that
necessitates the
development of a policy
Typically, public policy making
starts with perception of a
problem. Getting the diagnosis
right is the key!
The cooperative also needs to know and understand the
purpose of policies and to recognize that the issue or
problem can be effectively dealt with by the creation or
modification of a policy.

32. Workshop 1
Identify and define the problem or issue
that necessitates the development of a
policy

33. 2. Policy Research and Analysis
Systematic collection and
presentation of information is the
backbone of policy development.
Thorough research and data
analysis provides the body of
evidences necessary to justify
decision making
There are many factors which influence policy choices
including timeliness of response, responsiveness to
member needs, cost of implementation and projected
impact on the desired outcome supported by reliable and
timely evidence

34. 3. Generating Policy
Solutions and
Alternatives
The worthiness of a list of
policy alternatives, and the
recommended policy option,
must reflect the thoroughness
and rigor which is applied to
the definition and analysis of
the issue, the degree and types
of consultation undertaken and
pre-considerations of the
measurability of the policy once
its been implemented.
Furthermore, the potential
viability of policy alternatives is
not only about integrity of
process, it is also dependent on
the degree to which political
realities, the
public's/stakeholder's tolerance
of risk, and policy response
times are considered.

35. The Policy Making
Process
4. Consultation
Agenda
Setting
Policy
Formulatio
n
Policy
Adoption
revision
Policy
Evaluation
Policy
Implementatio
n
Consultation helps to
build trust and
transparency and good
working relationships
which are necessary for
successful policy
implementation.
Consultations are carried out :
Within the lead Agency with their technical experts
Within Other Government Agencies which may be directly or
indirectly impacted
With Among committees, management and stakeholders

36. 5. Developing Policy
Proposal
The proposal often
consists of a written paper
outlining the basis for the
policy and the facts
supporting various policy
options. It articulates the
consultation process
followed and the potential
impacts of the policy
alternatives on the
members and various
stakeholder groups
While policy proposals generally
list more than one alternative to
address the issue; the paper should
clearly articulate the preferred or
recommended option considering
the balance of the evidence
gathered.

37. • Policies are proposed and thoroughly
discussed in the board meeting.
• Policies formulated and agreed on are
consistent with the vision, mission
and goals of the cooperative.
• Policies agreed on are in accordance
with existing laws and regulations

38. The final policy document
needs to be formally adopted
by the member of the Board of
Directors with an appropriate
record entered in to the
minutes

39. Communication
Following formal adoption of the
policy it should be communicated far and
wide throughout the cooperative and
stakeholders. Training sessions may need
to be conducted to ensure that personnel
are fully informed and able to implement
the policy. If the policy is not well
communicated it may fail.

40. 6. Policy Implementation
Policy
Implementation is the
stage in the policy
process where policy
action occurs to address
a recognized policy
problem. At this stage,
the design of a policy
proposal is put into effect
and the policy is
executed by respective
administrative agencies.

41. 6. Policy Implementation
According to Theodoulou and Kofinis (2004), how well
policy is implemented is affected by the three criteria:
1. Clarity. A goal stated with clarity and specificity not only
provides direction but also improves the basis by which policies can
be evaluated, for accountability, efficiency, and effectiveness.
2. Constant feedback as to how implementation is
progressing, as well as preliminary assessments of impacts
3. Strategic Planning. Essentially, strategic planning is a
tool with which the agency can evaluate its ability to achieve
the goals of the policy, as well as plan for how the policy will
be executed

42. Policies are typically promulgated through
official written documents. Policy documents
often come with the endorsement or
signature of the executive powers within an
organization to legitimize the policy and
demonstrate that it is considered in force.
Such documents often have standard formats
that are particular to the organization issuing
the policy. While such formats differ in form,
policy documents usually contain certain
standard components.

43. Evaluation considerations must
begin early in the policy
development process as objectives
are formulated and indicators are
established in order to determine
policy effectiveness.
Evaluation is not simply about
assessing whether an initiative was
a success or failure. Instead,
evaluation is about creating the
information and data about the
initiative's success and why.
Evaluation findings can lead to
more effective and efficient
program delivery
7. Policy Monitoring
and Evaluation

44. The implementation of the policy
should be monitored. The policy
may still require further adjustments
and furthermore the reasons for the
policies existence may change. A
general practice is to set a date for
the policy to be reviewed, this might
be one a year or once in every three
years. It just depends on the nature
of the policy.

45. Evaluation as Part of a Larger
Process
Evaluation is simply one component of the
policy cycle and an overall performance
management framework. As an initiative is
implemented, the outputs and outcomes are
monitored, refined and then evaluated.
Findings from the evaluation results will allow
for adjusting and modifying the various outputs
and outcomes of an initiative and the process
gets repeated. This process is shown in the
Evidence Wheel, a diagram that is part of a
curriculum given by British Columbia’s
Knowledge and Information Services Branch.

46. Evidence Wheel
http://policynl.ca/policydevelopment/pages/evaluation-larger-process.html

47. • Policies are reviewed and
changes or updates properly
discussed and documented.
• Implementation of policies is
regularly monitored.

48. Policy Content
1.
2.
3.
4.
5.
6.
Subject of Title
Policy Statement
Purpose
Scope
Responsibility
Effectivity
Optional:
1. Background
2. Definition of Terms

49. Policy statements indicating the
specific regulations, requirements,
or modifications to organizational
behavior that the policy is
creating. Policy statements are
extremely diverse depending on
the organization and intent, and
may take almost any form.

50. • A purpose statement, outlining why the
organization is issuing the policy, and what its
desired effect or outcome of the policy should
be.
• An applicability and scope statement,
describing who the policy affects and which
actions are impacted by the policy. The
applicability and scope may expressly exclude
certain people, organizations, or actions from
the policy requirements. Applicability and
scope is used to focus the policy on only the
desired targets, and avoid unintended
consequences where possible.

51. • A responsibility section, indicating which
parties and organizations are responsible for
carrying out individual policy statements. Many
policies may require the establishment of some
ongoing function or action. For example, a
purchasing policy might specify that a
purchasing office be created to process
purchase requests, and that this office would
be responsible for ongoing actions.
Responsibilities often include identification of
any relevant oversight relevant and/or
governance structures.

52. An effective
date which indicates
when the policy comes
into force. Retroactive
policies are rare, but can
be found.

53. Some policies may contain additional
sections including:
• Background, indicating any reasons, history, and
intent that led to the creation of the policy,
which may be listed as motivating factors. This
information is often quite valuable when
policies must be evaluated or used in ambiguous
situations, just as the intent of a law can be
useful to a court when deciding a case that
involves that law.
• Definitions, providing clear and unambiguous
definitions for terms and concepts found in the
policy document

54. Writing Good Policies
Be specific – mean what you say and say
what you mean.
- if action is mandatory, use “must” or “will”
- if recommendatory, use “should”
- if permissive, use “may”
- avoid “shall” – confuses between
mandatory or recommended
Source: Sumajit (2013)

55. Reminders policies must be
o thoroughly discussed in the board meeting
o always consistent with the vision, mission
and goals of the cooperative
o always accordance with the existing laws
and regulations
o reviewed and that changes or updates must
be properly discussed and documented
o implemented and regularly monitored
Source: Sumajjt (2013)

56. Documenting/Codifying Policies
Policy No.
01-s-01
2013
02-s-02
2013
Subject
Membership
Policy
Lending Policies
& Guideline
Resolution
No
Date
Approved
/Adopted
01-s-01- 2013
Jan 7, 2013
02-s-02-2013
January
15,2013

57. Adherence to laws, rules and regulations
PERFORMANCE AUDIT REPORT
1. Duties and responsibilities of
the Board well defined and
segregated and duly approved
- Special Order
- Appointment paper
2. Officers performing their
duties and responsibilities at all
levels (peers, self evaluation
and other form of evaluation
formulated and implemented
3. Oversight functions of the
Board
Board
Resolution
Board
Resolution
Board
Resolution
Board Policy

58. Adherence to laws, rules and regulations
4. Polices are reviewed regularly
5. Adherence to laws, rules and
regulations,
6. Duties and responsibilities of
the management well defined and
segregated and duly approved
7. Human Resource Policy
(recruitment, selection, hiring,
promotion, salary scaling program,
recognition, incentives, and benefit
packages of employees disciplinary
action, termination and retirement
Board
Resolution
Board Policy
Board
Resolution
Board
Resolution
Board Policy

59. Adherence to laws, rules and regulations
4. Incentives, and benefit
packages of employees
(Insurance protection
program, awards and
recognition, scholarship,
social, cultural, sports, team
and staff development)
5. Polices are reviewed
regularly
Board
Board
Resolution Policy
Board
Resolution
Board
Policy

60. Adherence to laws, rules and regulations
SOCIAL AUDIT REPORT
1. Feedback mechanism (feedbacks
and suggestions of Members (
membership meetings, area
consultation, suggestion and
grievance box, telephone logbook,
email, internet, social network,
correspondence, mail, SMS,
Freedom Board)
Board Policy
2. Responsiveness to gender, elderly, Board
youth, and person with special needs Resolution
Board Policy
3. Collaboration of
Board
programs/projects with any of the ff: Resolution
NGO, PVOs, CDCs, LGUs, GOS,
Business Organization and individual)
Board Policy

61. Adherence to Policies formulated in accordance
with laws, rules and regulations, and by-laws
Legal basis
1. Establishment of a cooperative branch
2. Training requirements for cooperative officers
3. Article 27 (2) of RA9520 provides that "AII
elective officials of the Government shall be
ineligible to become officers and directors of
cooperatives:
4 Article42. Officers of the Cooperative
(Degree of consanguinity and affinity)
5. 10 % Limitation on Share Capital
6. ARTICLE 37 OF R.A. 9520 – Term of Office
MC 2011-17
MC 2011-27
MC 2011- 03
MC 2011-04
MC 2011-05
MC 2012-20

62. Adherence to Policies formulated in accordance
with laws, rules and regulations, and by-laws
Legal basis
7. Implementation of training requirements for MC 2012-17
cooperative officers
8. Accountable officers
MC 2012-09
9. Put up Signage in cooperative places
10. Membership Registry
11. Establishment of Satellite Office
12. Prohibition of elective officials
13. Organization of Subsidiary cooperative
14. Art 46 Compensation
MC 2012-05
MC 2012-16
MC 2012-17
MC 2012-19
MC 2012–09
MC 2012-17

63. Policies on Products and Services
Objectives
Timpuyog ti
Barangay MPC
Evangelista MPC
Banerle Credit
Savings
Mobilization
Savings
Mobilization
Lending
Lending
Trading
Lending
Marketing
Financial
Services
Marketing

64. Programs and Services of
Cooperatives

65. Savings
Regular Savings Deposit
Time Deposit
Members Contingency Deposits
Youth Saver’s Club
Dream Savings Funds
Retirement Savings
Pension Savings
SAFE Savings
Build Savings
Emergency Savings Fund

66. Share
Capital
Common Share
Preferred Share

67. Loan
Express Loan
Regular Loan
Special Loan
Privilege Loan

68. LOAN
Regular Loan
Providential Loan
Commercial Loan
Financing Loan
Commercial Loan

69. LOAN
Special Loan
Salary Loan
Financing Assistance for Brgy Officials
Livelihood Loan
Show Money Loan
Pension Loan
Receivable Financing Loan
Loan Against Time Deposits
Allotment Loan (OCW, Seaman)
Micro and Small Enterprise Loan

70. LOAN
Privilege
Loan
Petty Cash
Farmers Assistance
Rice Loan

71. Other Services
Automated Teller Machine
(ATM)
Health Care Assistance
Program
Mortuary Assistance
Program
Life Insurance

83. Policy Constraints
If you are charged with the responsibility
to develop a policy, it will be important to
consider that the policy you write will be
constrained by policies, laws and
regulations of federation, union, regulatory
bodies, community expectations,
government policy and legislation. That is
why wide consultation is a key to
successful policy formulation.

84. Hence we should not
operate in a vacuum
but instead a policy
space. Our space
overlaps the space of
many other
Community
organizations with
whom we must so-exist
peacefully Webb,
Rowland and Fasano,
(1991) .
Government
Coop
Policy
Union
Federation

85. Who Makes Policy?
Organizational policy makers i.e. Board of
Directors, and Management, must go about
the process of policy formation in a careful
way. Policy makers must engage, and be
seen to engage, in the process of
consultation. A charge of 'failing to consult'
is a charge of considerable magnitude.
While much information can be gleaned by
listening to people, there is also often a
need to conduct research i.e. statistical
surveys, monitor events, etc.

86. • The role of the policy maker is act as a
funnel to gather information through
consultation and research and to reduce
and extract from the information, a policy
or a set of policies which serve to
promote what is the preferred course of
action.
• Seeking information from experts from
outside the organization (this may include
government personnel, other cooperative
managers and practitioners)

87. Some of the skills that policy makers
need to ensure the development of
effective policies are:
• Collecting statistical information
• Convening and chairing discussion
forums
• Be able to write policy documents in
appropriate language and without
ambiguity.

88. Causes of Bad Policy
• A failure to consult the people
who will be affected by the policy
or who will implement the policy
• A lack of communication between
persons who are involved or
should be involved in the policy
formulation process

89. • A failure to define the
problem or the essential
issue(s), or an
oversimplification of the
issue(s)
• Policy makers are unable to
reach agreement over basic
facts.

90. • Policy makers are biased in their
research for the policy
formulation process.
• Policy makers take a different
and conflicting position on key
aspects of the policy
• Prejudice and stereotyping by
policy makers

91. • A change of key players in the
policy development process
before it is completed
• A lack of understanding of the
importance of policies in
organization management

92. Communicating Policy
All organizations need to develop and
communicate policies. In fact organizations
are developing policies all the time but they
might not know it. This is because decisions
are being made all the time in regard to new
situations, and often where there is no
previous policy. Such decisions are made by
people who have the appropriate authority
and capacity such as managers, committee
members, board members, the executive, etc.

93. When decisions are made about
what actions must be taken in certain
situations, it is necessary that they
are:
Written down and recorded for
future reference
Communicated to all persons
who need to be aware of the
new policy

94. • The process of writing down a
new policy (documenting) is very
necessary. If this does not occur,
then there is likely to be confusion
about the decision made, what
was agreed and what actions
should be taken.

95. • At the very least the policy decisions
should be noted in the minutes of the
meeting during which they were made.
However it is very unlikely that members
of the organization, or customers, will ever
read the minutes of meetings.
• Therefore it is fundamentally necessary
that the makers of the new policy ensure
that it is put into writing and then find
ways to communicate it to the anyone
who needs to be aware.

96. Therefore it is fundamentally
necessary that the makers of
the new policy ensure that it is
put into writing and then find
ways to communicate it to the
anyone who needs to be aware.

97. Methods for
communicating
policies
• When a policy is put into
writing it can be
communicated in a variety of
ways including:
• Put on notice boards
• Sent to the membership by
email or in a letter
• Put on the organization's
website for download

98. • Displayed in a newsletter
• Placed on the back side of
forms such as the
membership form
• Inserted into a "member's
handbook"
• Made available in a policy
manual kept in the
organization's office

99. Benefit of Policy Manuals
• It would be prudent for organizations to
have a policy manual. This could be a ring
binder that collects all policies together in
one place.
• Once a policy manual is in existence
everyone has the chance to look up the
policy on a particular matter and then
follow the recommended course of action.
• As a policy is amended, the policy manual
must be updated.

100. Organizational
Policy
Business
/Operational
Policy

101. A. Organizational Policies
SMCBUP
Membership
Education &
Training
Internal
Control
Ethics
Human
Resource

102. B. Business/
Operational Policies
Lending
Trading
Marketing

103. Reference
• Oro Integrated Cooperative
orointegratedcoop.com
• Sacred Heart Savings
Cooperativehttps://www.facebook.com/sa
credheartsavingscoop
• Narra Multi Purpose Cooperative
www.narracoop.org

104. Reference
• SACDECO
www.sacddeco.com
• Tubao Credit Cooperative
tubaocreditcooperative.com
• Gledco
www.gledco.org.ph
• Griffin, Michael. How to write a policy
manual at www.gobookee.org

105. References
• Leo Isaac. What are policies?
http://www.leoisaac.com/policy/top133
.htm
• Maribeth R. Sumajit (2013) Policy
Formulation at www.sliddeshare.net
• Josefina B. Bitonio (2012) What is policy?
www.slideshare.net

106. Workshop 2
From the issues
identified formulate
a policy for your
cooperative