Whether you are a manager, staff, or a director, you will be happier and less frustrated when your co-op's board is operating smoothly. Board meetings that go on for hours, characterized by micro-management, arguments and long-winded speeches centered on individual director's interests, are frustrating and draining for everyone present. Members and staff who attend such meetings lose confidence in the organization and in the governance structure itself.
Ultimately, the board is responsible for its own success and that of the cooperative. There are many factors that contribute to a well-functioning, effective co-op board. Here are three of the most important:
Qualified directors. This includes personal qualities as well as knowledge and skills in business, teamwork, leadership, etc. Qualifications can be enhanced by effective development and training of interested members, an active recruiting process for board elections, a good orientation/ training process for new directors, and ongoing board education.
A strong general manager. Hiring and monitoring the general manager is a key board responsibility. When the board has confidence in its general manager, there is less micro-management and fewer operational issues to worry about. A great board can only do so much without a good manager - but then, a great board will take care to hire one! When management is well in hand, the board can concentrate on what it should be doing - providing leadership. (On the other hand, one pitfall for the board is relying too much on the general manager for leadership.)
A solid framework ofprocesses and policies: This provides continuity for the board and general manager, freeing each to do what they should be doing - managing and leading a successful cooperative business.
A strong foundation at Sacramento Natural Foods Co-op
Sacramento Natural Foods Co-op (SNFC) is a natural foods retailer with sales of about $10 million last year and around 3500 members. The seven directors are elected to three-year terms, and one may be a co-op employee. SNFC's directors currently have a combined total of about 25 years on the board, though half of this is with our president.
Smoothness isn't everything, but it is a very tangible thing. Effectiveness is a little more difficult to gauge, especially if the store is doing well. And I would argue that until a board is running smoothly, it won't even notice how it can be more effective.
Without going through a laundry list of board activities, here are a few key things that help make our board operations smooth:
- In recent years, we've hired qualified general managers, and our business is booming.
- Each of us has years of involvement with SNFC as members, member workers, and committee members. We are committed to the success of the store. It is rare for one of us to miss a meeting, and retreats are scheduled so that all can attend.
- Meeting packets are prepared by staff in advance and are available to directors at least a week before the board meeting. The board officers and general manager meet ahead of time to discuss the agenda.
- At monthly board meetings we use a paid court reporter (a member) to take minutes. These are summarized for the next month's member newsletter, filed in the corporate files, and included in the next month's board packet for approval. A summary ofthe major items (decisions, discussions, action items, etc.) is also filed.
- Standing committees (Finance, Policy, Merchandising Policy, and Community Concerns) are all chaired by directors and report to the board each month.
- Directors have a pretty good understanding of board and management roles. When we do ask operational questions, we are seeking information, not control, and are careful not to overstep our bounds.
With strong management and the grocery business doing well, we have made some changes over the past year. It must be said that these changes were not a result of any coordinated effort to reshape board governance, but simply adjustments we made to improve our effectiveness in several key areas.
An effective board must communicate between meetings. This may not happen, either because people are busy or because directors may feel it's somehow sneaky to discuss issues outside board meetings. Yet issues must be discussed before they can be voted on, and more information may be needed. If all this takes place at monthly meetings, getting something accomplished takes forever. One way we have made between-meeting communication easier is with voice mail; each director has a voice mail box at the store. Members can reach us this way also. We hope to make better use of email: reach everyone with one message!
Informal meetings were also valuable for us. Board meetings, even at co-ops, have at least a veneer of formality about them, and there is always much to accomplish and little time. Unfortunately, we often focus on our differing opinions - no sense in wasting meeting time discussing what we agree on, right? We came up with the idea of quarterly potlucks where we could drop Robert's Rules and discuss co-op issues, our dreams and fears - without worrying about decisions or decorum. We found that we agree more than we disagree about the big issues, and it has contributed a lot to our respect for one another over the past year.
We improved our agenda and planning process. Agenda items now include "expected outcome" (in addition to time limits), and background materials in the board meeting packet are labeled and noted next to each item. The executive committee now meets before the packets are prepared to review the agenda, look at the master calendar, and add new business. In the past this was done after packets went out, so updates were done at the board meeting and directors were not able to prepare for new items. (See "Meeting Preparation" in CG #68, January-February 1997.)
Our most experienced director is presently serving as board president, and the vice president and secretary are taking more active roles in meeting preparation. All directors have assumed responsibility for staying on task and within time limits. We are also making an effort to formulate proposals and motions ahead of time, to avoid struggling for the right language when it is time for a vote.
General manager relations
This year we developed, approved, and used a general manager evaluation process and are in the process of setting goals with our new general manager. This was probably the biggest task we tackled, and it really gave us a sense of accomplishment.
Board education and training
Our secretary revised the board binder and developed a procedure for keeping it updated and relevant. The existing binder had good information, but a lot of it was out of date, and there was no mechanism for updating it and making sure all directors (especially new ones!) had current information. The binder included policy documents, planning documents, financial reports, co-op and store background, Challenges to the Cooperative Board of Directors, and other training materials, as well as a place for current meeting packets.
Where do we go from here?
When the store is doing well, most people assume that the board is functioning well and doing a good job. Yet there is much our board can do to improve further, and this will be a focus for us over the coming year.
Last year we completed the board self-evaluation from CGANE (Co-op Grocers Association of the Northeast), which for the most part confirmed the strengths and weaknesses that we were already aware of. Some key areas we will be looking at this year:
Perpetuation of a strong board
- Annual self-evaluation followed by concrete plans for improvement. Now that we have a procedure for general manager goal-setting and evaluation, we need to do the same for ourselves.
- A more active process for attracting candidates. Participation seems to follow controversy, and there isn't much right now!
- More formalized and complete orientation and training for new directors.
- More ongoing training and education for the board. We have a board policy supporting staff training and development, yet we neglect our own. Perhaps we are reluctant to spend money on ourselves?
Planning and leadership
Like the Midwest co-op boards surveyed by Northcountry Cooperative Development Fund (see "Survey Details Needs of Food Co-op Directors," CG March-April 1997), we have found our training most lacking in the areas of linkage to members and the long range planning process, both of which we have been discussing in our retreats.
There's no time like the present
A good general manager works to build a solid, professional staff, whether the store intends to expand or simply to maintain its position in the community. But the board's need for that same solid foundation is often overlooked - and no one can build that foundation except the board itself. As John Carver writes in Boards That Make a Difference, "The easiest and best time to improve is when things are already going well. Incorporation of better systems is facilitated when it is not perceived as discipline or initiation of a power struggle."
The best time to begin is now!