Remodeling Plans

Food co-ops wrestle with accountability and control in regional and national associations

A proposal to redefine their regional and national associations has generated intense discussion among food cooperative managers and organizational leaders. In late November, the National Cooperative Grocers Association (NCGA) board of directors released a revised, more detailed working draft of its reorganization plan. This followed up an earlier "member linkage" statement from the board (published in the previous edition of CG, Nov.-Dec. 2003).

Documents and much of the ongoing discussions have been shared through a website bulletin board sponsored by NCGA and accessed by member co-op managers and other participants from member co-ops. By mid-January the finished proposal will be distributed to co-ops throughout the country, followed by a national meeting in February to discuss the plan and a vote in March. With the plan still under discussion and its final version several weeks away, the present article can only attempt to highlight some of the issues under debate.

Regional foundations

One larger trend, accentuated by the loss of co-op distributors they once owned, is a gradual overcoming of the independent stance characteristic of these cooperatives. Several organizations and collaborative projects have contributed significantly to this evolution and maturing. In particular, over the past ten years the activities in regional Cooperative Grocers Associations (CGAs) have been a primary means whereby food co-ops have collaborated to strengthen their resources and improve their market position.

The national organization was formed in 1999, well after the origins of some of these regional associations, while other CGAs were launched as recently as the past year. Regional successes have made possible the next stage of development, yet these regional foundations have also hindered coordination and recognition of an inevitable need: a strong, unitary organization. Attempts to extend successful programs to other regions have had uneven results. Support for national programs has been inadequate and secondary to regional activity. When organizations are joined or their relationships redefined, issues such as communication, control, and accountability typically arise--and the regional patchwork comprising the NCGA is no exception. Presently, ten different associations with a total of 99 co-ops and 116 stores make up the membership of NCGA. These CGAs have widely varied levels of experience, different standards and practices, and contribute at different levels of participation.

Different degrees of pressure from market competition are felt also--paramount for some, much less threatening for others--and this can feed a lack of solidarity or lack of imagination that weakens united action. In addition, the accountability of these associations and their executive directors to other CGAs and to the national organization has been ambiguous or weak, and communication and coordination problems have resulted from the current structure.

The CGAs have concentrated on two general areas of collaboration: joint purchasing programs for grocery items as well as other business necessities, and improvements based on peer support, primarily for general managers and department managers. (Regional activities were reported most recently in CG #106, May-June 2003.) The NCGA draft plan retains these two operational areas, defined as "Business Services" and "Peer Work Groups." Business services--for example, a national purchasing program, joint promotions such as CAP, and co-op brand development--are expected to provide a return on the members' investment. Peer work groups will support the continuous improvement of member co-ops. In the draft plan for a restructured national organization, these peer work groups initially are regional and based on the current CGAs but later may expand to be based on other work affinities. Both the business services and the peer work groups must address issues of accountability and compliance.

This winter, leading to a national meeting in San Diego February 20-21, will be a crucial time for reviewing the plan, addressing concerns, and building trust among all stakeholders. And while general managers within the CGA system serve as the representatives of member co-ops, the stakeholders include local co-op boards. These directors can deepen their contribution to stronger local and national cooperatives by being informed of the purposes, principles, and concepts of a reorganized NCGA.

Accountability questions

The proposed unified cooperative structure follows conventional lines of authority based in a board of directors elected by the members. It calls for direct membership in the national organization by local co-ops and an executive director position overseeing regional development directors and other staff. In differing from this proposal, at least one CGA and its director, reflecting successful management of joint programs at their small group level, stated that accountability would be best achieved through regional contracts and through the staff and face-to-face relations maintained within each region. Other participants responded that face-to-face relations may be a good for constructing agreements and for problem solving, but they need not be the primary form of accountability and may actually hinder accountability.

All participants agree that the new structure must describe a member-driven organization that aims to strengthen local co-ops. The alternate proposal supported a lead role for the regional staff both in designing programs and in obtaining compliance, and it emphasized their accountability to regional constituents. But a recommendation that regional directors also be involved in evaluating or governing national operations reversed the direction of most co-ops. We have learned after many trials that boards need to provide accountability by focusing on overall direction and representing the interests of ALL members, and not through operational involvement but by delegating authority and monitoring performance. There is little reason to think that this pattern should be different for our secondary and tertiary level cooperatives. In a new national structure the regional or district directors could serve positions parallel to department managers vis-a-vis a general manager. Even if regional directors have been chosen by regional constituents, they will need to be accountable to the national organization. Accountability will have to be provided through agreements and well-defined means for constructing, implementing, reviewing, and revising those agreements.

Along those lines, the NCGA draft plan envisions five points of influence for each member co-op that provide avenues for communication and member control:

• Governance: board representation, member voting, equity contribution.  • NCGA staff plus a web discussion board for members and staff.  • District membership meetings in conjunction with peer work groups for identification of needs and program evaluation.  • A general assembly of all members twice each year.  • A process for resolving disputes with staff or between members.

Prospects: a landmark year

Prospects for support among the regional associations for the proposed new NCGA agreement appear to be good. This estimate, if accurate, suggests that in 2004, some thirty years after most of these independent co-ops were founded, a sizeable number of them are on the brink of establishing an empowered national leadership organization.

Despite difficult issues still needing resolution and organizational responsibilities still needing definition, there is a high level of agreement among the participants. That includes agreement about the need for an empowered national organization and agreement about retaining active regional groups as essential avenues for building common programs. The intent behind the debate, and a very real possibility in the coming year, is new and greater unity that strengthens local co-ops everywhere and enables them to serve their multiple bottom lines.

See other articles from this issue: #110 January - February - 2004