Governance Considerations in Multi-Store Co-ops

We’re in a position not unlike the years after WWII when the small grocery cooperatives began to fold in the wake of full service supermarkets with vast parking lots. Jerry Voorhis, former president of The Cooperative League (now NCBA CLUSA), made these poignant remarks about the lessons learned from that time:

1. No cooperative business or institution ever stands still, it grows, expands, develops—or it begins to die.
2. The day of the small cooperative kept alive by idealism alone is largely past.
3. The best method of expansion lays not so much in the formation of new cooperatives as in the growth of well-established ones.
4. Good management is of critical importance.
5. As cooperative businesses grow, there is a greater (not less) need to intensify member-education and activity programs.

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These and other observations are uncanny in their relevancy for today and how they speak to the vital role of cooperative governance and participation. Many food co-ops are expanding by opening new stores, and in some cases, merging with other co-ops. With that comes the need to address the integration of new members and communities both on an operational and governance level. In terms of governance, boards already tackle social and economic dichotomies and now even more needs to be considered. What are strategies for successful navigation as we reach for more members who will undoubtedly (and fortunately!) bring different perspectives to the table?

Martha-WhitmanCDSCC-pullout-quote-wideGovernance strategies revolve around communication, accessibility, and leadership development. A long term and varied communication plan can serve two distinct governance strategies. As co-operatives become larger so does the need for continual co-operative education. Members must be able to link their interests with the co-op’s, and see that by patronizing their co-op, their needs and values are being met. The plan doesn’t need to be complicated, in fact simplicity is preferred, but a communication plan will be perpetual. Think of it like a marching band in a parade. The board is forever in the parade, playing the member engagement song for perhaps the 100th time, but for that next new member, they’re hearing it for the first time.

A long-term and varied communication plan is also necessary for member engagement. There are only so many seats on a board and few members are ever inclined to the commitment of board service (and not all of them are well-suited to it); however, boards can design a variety of ways to bring interested members into the process. Consider the different ways to communicate, not just the medium, but the opportunities for the board to reach the members and members to reach the board, a mix of directors providing information and members offering feedback along with events where one-on-one conversations can be fruitful and satisfying. Committing to member communication lays the foundation for the democratic process to work within the co-op and is a crucial governance strategy.

Accessibility is a consideration that comes with the territory of multi-store co-ops. How should that accessibility be established? Learning from the lessons of the Berkeley Co-op [2], present day co-ops don’t apportion board seats geographically when opening a store in a new community. Nor is it recommended to establish store councils, which was another ill-fated and confusing program at Berkeley; member participation design should minimize the chance of factions forming. Merging co-ops might establish a transitional governance structure with apportion board seats but the need for protected representation quickly becomes less important than finding the best qualified candidates. The most solid policy is open voting where all members vote for any candidates, since all directors are responsible for the whole regardless of personal stakeholder interest.

What constitutes being present at a meeting can expand accessibility in governance. As co-ops grow their geographical footprint it can make sense to utilize technology to help get people to the table. Board and committee meetings set up with webcasting or conference calling allow directors to attend meetings they might not be physically able to get to. Before investing in such technology be sure to review your bylaws (and state laws). Your co-op might have to expand its definitions to allow for quorum to be established and votes to be valid when a director(s) is not physically present. Conversely, recognizing the high touch value of in-person meetings, a multi-store co-op board might opt instead for fewer but longer meetings and use conference calling for non-controversial or housekeeping functions.

Successful governance in the context of opening additional stores or merging with others will rely on a commitment to leadership development and training. Generally those who increase their co-op participation by running for the board come from a place of deep caring of their store. Co-ops that have expanded require directors to view the co-op beyond a particular store and it’s the co-op’s job to provide the resources to build that perspective. The board also needs to create space for more and different voices, an intentional process requiring thought and planning. An active nomination and election committee can identify particular strengths needed on the board and recruit members to bring those attributes to the slate.

The co-operative model is viable yet requires our attention; our advantages are real when executed well. By and large the consumer food co-ops of the 1930s didn’t survive, but it doesn’t have to be our story as we adapt to our changing world. Today is different from the past in terms of how we experience community, as well as our expectations of co-ops. We can create many opportunities for member involvement that will extend beyond the boardroom. Our cooperatives will be strengthened by placing governance in a context of participation that we are just beginning to understand as more co-ops open more stores or merge with one another.

[1] Consumer Cooperation, The Heritage and the Dream. By Emil Sekerak and Art Danforth. 1980.[2] To learn more about the Berkeley Co-op see http://www.grocer.coop/articles/berkeley-lessons-co-op-leaders
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