Removing the President of the Board

A case of demagoguery vs. co-op democracy

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Kootenay Country Co-op is a 29-year-old cooperative operating in Nelson, British Columbia. We have been enjoying several years of financial stability and membership growth. We are fortunate to operate in a community that believes so strongly in supporting its local enterprises.

Working with a volunteer board of directors has always been interesting—new faces with new perspectives, a constantly changing dynamic year to year. The board of the Kootenay Co-op recently experienced a significant challenge, the removal of one of its directors.

This director had been on our board for two years before becoming president at the beginning of his third year in September 2003. His participation during his first two years on the board was eager and committed. We had no reason to believe that he would not be able to fulfill the position of board president. However, within a few months of becoming president his relationship with me, the general manager, became quite strained. It became clear that our new president had no intention of following our board code of conduct and protocol guidelines.

In November the president came upon an issue that he felt strongly about, so strongly that he managed to derail every board meeting from January until April with this issue. Not only were board meetings preempted by this discussion, the president also sent out lengthy emails on an almost daily basis between meetings.

The rest of the board was unsure how to move beyond the issue. Several of the directors became very concerned with the president’s behavior and clearly told him that he needed to let the issue go for the time being and that it would be dealt with at a future meeting. The president was also discussing this issue with many co-op employees while they were at work. Many of these employees came to me with their concerns about having these discussions with a member of the board. These interactions between one director and selected staff members only served to create polarization and distrust within the board, the management, and the staff. The main concern of the board quickly became the president’s unwillingness to work cooperatively and respectfully with his colleagues.

I approached the president after the April board meeting to remind him of the board code of conduct and ask him to stop his upsetting discussions with staff; he refused. I then asked the entire board to meet with me to discuss the deterioration of the relationship between the president and myself as general manager.

The president refused to attend the board meeting I requested, claiming that my concerns did not warrant a special meeting of the board. Five out of seven of the board did meet with me in late April. Several of the directors had similar concerns about the president. They voted to bring a resolution to elect a new president to the next regular board meeting in May. By postponing the resolution, their intention was to give the president the opportunity to account for his actions.

The president also refused to attend the May meeting, claiming that it was illegal because it was held off-site. At its May meeting, our board of directors elected a new president. The former president continued to hold the position of director.

The former president became very upset about his replacement as president and began a campaign to discredit the rest of the board and the management of the co-op. He prompted the creation of a web-based newsgroup where “co-op members and supporters could discuss their concerns about the direction of the co-op.” He made a huge amount of inaccurate, incomplete, and confidential information available to the members of that newsgroup. He made numerous public statements that put into question the integrity of the board and management of the co-op. He increased his emails, demanding information and meetings with me. The board tried to resolve the situation by asking the former president to address his questions and concerns through the board.

At the July board meeting the former president took the opportunity to continue his campaign to discredit his fellow directors by announcing to the many co-op members present that his fellow board members were “corrupt” and that they had “forfeited their mandate to run this co-op.”

By the time the September board meeting came, the rest of the board was exhausted with the accusations and the entire situation. They explained to the former president that his actions were disrespectful to the rest of the board, and they asked him for his resignation; he refused to resign. They voted at that meeting to bring a special resolution to the co-op’s membership at the upcoming annual general meeting, asking the membership to vote on removing the former president from the board.

In order to provide an objective and credible perspective, the board opted to hire a co-op consultant through the British Columbia Cooperative Association to help facilitate the annual general meeting.

The two weeks between the September board meeting and the annual meeting were intense. The staff was very stressed out responding to member questions and comments; everybody seemed to have her of his own opinion about the co-op. The on-line newsgroup was abuzz with innuendo and misinformation. The entire community was trying to find out “what is going on at the co-op?”

The night of the annual general meeting was overwhelming. The meeting room was overflowing with 168 members and several guests in attendance to support their co-op (an attendance record for us!). Since our new president had recently moved out of the area, our vice president chaired the meeting, with the co-op consultant facilitating the special resolution portion of the meeting.

The vice president introduced the special resolution and spoke about the former president’s conduct over the past several months and how that had led the board to ask the membership to vote on his removal. The former president spoke on his own behalf. Many of the members in attendance spoke either in favor or against the resolution. Some members felt that they were being asked to make a decision with very little information on which to base their decision. At the end of the discussion a secret ballot was cast. According to the British Columbia Cooperative Act, a two-thirds majority is required for this type of resolution to pass. The result of the ballot: 157 cast; 1 spoiled; 44 against the resolution; 112 in favor of the resolution. The members had voted to support the board and management of their co-op.

In the weeks since the annual general meeting we have been able to get back on track. We all have a renewed enthusiasm and confidence in our new board. The board is now able to return to its work that had been left in limbo for almost a year.

Aside from learning about the technical aspects of removing a director, we also learned a lot about how much we all—members, board and staff—depend on each other. The membership depends on the board to ensure the members’ best interest, the management and staff depend on the membership for their livelihoods, and the board depends on the management and staff to carry out the operations of the store. We are all here to serve each other and to keep our co-op moving forward.

*** Deirdrie Lang is general manager at Kootenay Co-op in Nelson, British Columbia ([email protected]).

See other articles from this issue: #116 January - February - 2005