For co-ops to have meaningful impact in their communities, they need to be prepared to take on risk. And directors need to develop their skills and hone their comfort level with facing risky decisions.
In this issue we explore the types of risky issues that emerge in day-to-day operations, as well as the larger and more strategic decisions that require careful study. We offer a series of questions that can guide a board's consideration of a "high-risk" topic. And we talk about why tackling risk-laden questions is both important and critical for co-ops.
The study guide for this issue offers a selection of questions or approaches that can be helpful in discussing risk and then four scenarios that can be used for a board to practice or try out these suggestions.
Risk Happens! Every Day – Lucinda Berdon
“When it comes to big decisions made by the board, the GM's job is to identify the scope of risk involved and to help the board understand the risk so it can act. The board needs an overview and assessment of the risk."
Risk Is a Good Thing: Avoiding the Trap of Being Risk Averse – Gail Graham
“Like it or not, our success is to a great extent driven by how we face risks, take risks, and manage risks. By engaging in an open dialogue, gathering information, and understanding that risk is an intentional interaction with uncertainty, co-op boards can develop a culture where appropriate risk taking is the norm.”
The Risk of Doing Nothing – Philip Buri
“The greatest threat to our co-ops is doing nothing. By distrusting success in the market, we put at risk what we so desperately want to protect.”
Calculating the Risk – Marcia Shaw
“We'd feel bad if the choices we made damaged our beloved co-op. It's important to know if you are relatively in sync with the rest of the board regarding risk, or if you are significantly more or less likely to go for it when shown an opportunity that is not a sure thing.”
Study Guide – Questions as You Consider Risky Issues – Paige Lettington and Cindy Owings
We offer a series of questions or steps that can be helpful in pondering a big, strategic decision. Not all will be useful or applicable to all situations but they can all be helpful in different situations. Then we offer three typical situations the board may face that you can use in practicing with these questions or steps. Pick one or use this exercise to talk about a current issue your board is discussing or wrestling with.
We welcome your comments, suggestions, and stories. Did you learn something? Were the discussions that came out of this issue useful to your board? How did your board use this issue in improving its handling of issues related to information-sharing and transparency? Send your suggestions, comments, experiences, and/or reactions to [email protected].