The cooperative board room does not share all the same purposes as investor-owned corporation or nonprofit boards. Co-ops are organized to benefit their owners, and that is more important than a financial return on investment. We have been asking ourselves if there should be a model of cooperative governance and if so, what would it need to look like to support and drive forward the success of our cooperatives? We concluded it was time to create our own understanding of cooperative governance.
Last spring, CDS Consulting Co-op member Art Sherwood was invited to be a visiting scholar to address our questions at the world-renowned Vincent and Elinor Ostrom Workshop on Political Theory and Policy Analysis at Indiana University. Based in both Nobel Prize Laureate Elinor Ostrom and Vincent Ostrom’s work, he conducted research addressing the expectations we have of cooperative governors and how this might differ from investor owned corporations. Based on the results of Sherwood’s research and our team’s deep experience with cooperative leadership, we built the Four Pillars of Cooperative Governance model (4PCG).
Four Pillars of Cooperative Governance
The 4PCG is not about changing systems but is a new way of making sense of cooperative governance. We think it addresses current gaps in strengthening owner relationships and democratic practices that are not clearly part of other business or governance models. 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 the organization up for movement in this direction.
- Democracy. Successfully practicing, protecting, promoting and perpetuating our healthy democracies.
Within a co-op, no matter what the role, the expectation is that everyone is responsible for working together effectively, to be accountable and able to empower others, be focused on purpose, and participate in ensuring a healthy democracy. It is what co-ops are working to achieve, not only in the board room, but in the workplace, and with members in the co-op. Governance – making key decisions, working together for common goals, role clarity and ensuring accountability – happens throughout the co-op at every level.
Therefore 4PCG is a framework for connecting the co-op’s values to governance activities at all levels — staff, management, board and owners. Each of the four pillars — Teaming, Accountable Empowerment, Strategic Leadership and Democracy are all relevant to each constituency in a co-op. 4PCG is not about changing systems, but a new way of thinking about the role of governance in a co-op.
Read more about the Four Pillars of Cooperative Governance in the January/February 2014 issue of the Cooperative Grocer.