The relationship between the board and general manager is of paramount importance to any cooperative because both parties provide a connection to the co-op’s main constituency: owners. The co-op owners trust that their elected representatives will provide good governance on their behalf, resulting in positive outcomes toward fulfilling the co-op’s goals. In turn, the board delegates responsibility to management to carry out operational strategies to the meet the Ends of the organization.
When each functions well in his or her given role, it is a relationship of reciprocity. If the board and general manager connection is weak or unbalanced, stagnation or discord is almost always a result. It’s important for both boards and their general managers to work together on a shared vision to move the co-op forward on its goals. This can only be accomplished with systems that aid good communication.
As we examine the strengths and weaknesses of board-general manager relationships, we do so within the framework of the 4 Pillars of Cooperative Governance. Cooperative governance is the act of steering cooperatively owned enterprises toward economic, social, and cultural success. It consists of answering key questions, defining roles and responsibilities, and establishing processes for setting expectations and ensuring accountability.
The Four Pillars of Cooperative Governance are:
- Teaming: successfully working together to achieve common purpose.
- Accountable Empowerment: successfully empowering people while at the same time holding them accountable for the power granted.
- Strategic Leadership: successfully articulating the cooperative’s direction/purpose and setting up the organization for movement in this direction.
- Democracy: successfully sustaining a culture in which people choose meaningful ways to participate for both individual or common good.
While all 4 Pillars are relevant to this discussion, Accountable Empowerment and Strategic Leadership are critical aspects of the board-general manager relationship. Support programs like the Cooperative Board Leadership Program (CBLD) assist co-op boards and managers with training, information, coaching, feedback and a chance to improve their work in order to positively strengthen all 4 Pillars within the co-op.
Board leadership development consultant, Todd Wallace, said that without Accountable Empowerment fully functioning, it would be challenging for a board and manager to have an effective relationship or to move on to any of the other pillars of governance. A lot of the communication that takes place within the cooperative regarding the board and general manager is by its nature, formal. Co-op business decisions and outcomes need to be reported by both the board and manager in order to ensure accountability.
That’s why having a system in place for setting expectations, and strong delineation of roles regarding who makes which decision, is imperative to the board and general manager relationship. “For instance, the board’s expectations for the general manager need to be clear,” Wallace said. “For accountability, the general manager shows how those expectations have been met in their reports to the board.” In general, Wallace said, “the reporting culture needs to be robust.”
Wallace also thinks that it’s important for boards to hold themselves accountable to the process of fostering the relationship they have with the general manager. What boards expect the general manager to do for staff at the co-op, they should also adopt with their one employee. “Sometimes boards slip and forget what it means to be a responsible employer. There is an expectation that everyone act professionally and respectfully. It’s part of a healthy work dynamic,” he said.
Thane Joyal, board leadership development consultant, also believes that embedded in highly-functioning cooperatives and the board-GM relationship is a focus on excellence. Joyal thinks excellence is at the heart of Accountable Empowerment because it demands that boards and general managers continue to enhance and improve their governance and management roles for the good of the whole cooperative. “I think it’s important to look at excellence as an objective standard,” she said. Joyal thinks it’s also important to confront dysfunction and lack of accountability throughout the co-op. The board needs to hold the general manager accountable for excellent results. The general manager needs to ensure accountability throughout the co-op and to be truthful with the board if it is not following its expectations for governance performance. “Lack of accountability damages the board-GM relationship over time,” Joyal said.
When the board and manager have a strong sense of understanding about their roles in the co-op, then it stands to reason that they can work together on the co-op’s future. The Strategic Leadership pillar is about successfully articulating the cooperative’s direction/purpose and setting up the organization for movement in this direction.
The board’s part in Strategic Leadership is to focus on outcomes, and the general manager is in control of executing the board’s goals. “Often there are opinions on how to do things,” Wallace said, so it’s important to be mindful of the inherent tensions in setting the co-op’s future course. “You have to understand roles so each party can succeed on their own terms.” This could lead to “safe strategic conversations” as an agenda item. Both Joyal and Wallace suggest board and general managers take time together to inform and educate each other on important and strategic topics without decisions being made.
The importance of being able to work together on Strategic Leadership cannot be understated. It is imperative to the individual co-op’s long term success and survival of the food co-op sector. “When board and general manager act in alignment, that’s when you can see democracy in the organization take hold,” Joyal said. “Then you can really see the co-op excel.”