Four Pillars of Cooperative Governance

Four Pillars of Cooperative Governance

Columinate | 01-01-2014

What makes a business or organization so compelling that you look forward to going to it? It may be the building, it could be the ethics it stands for, but it’s what happens there, the character of the people, and the things they do that draw you in. It’s where you might find others with common interests, or simply having fun. Places like that stand out and give off a “vibe” of positive energy. It’s what Owning Our Future author Marjorie Kelly describes as a “living company.”

Food co-ops are often this kind of “living company” in their communities. This is the result of co-ops working together, engaging stakeholders, planning for the future, and doing what they say they are going to. It makes people want to be a part of it.

Building a great co-op involves a strong contribution from the board, management, staff and ownership. It is the leadership ability and effectiveness of the co-op’s board that sets the tone for the organization.

For example, food co-ops have many governance tools at their disposal that have served them well, like Policy Governance, a system for defining ends, clarifying roles and a structure for organizing their work. Over the last decade, co-op boards have been strengthened by a solid focus on Ends accomplishment and good process and systems. This has helped create positive and effective relationships with general managers. The sector has seen the outcome this has had on both business growth and social impact in our movement.

Yet the cooperative board room does not share all the same purposes as investor-owned corporations or nonprofit boards. Co-ops are organized to benefit their owners, and that is as important as a financial return on investment. At the same time, co-op leaders had been asking themselves 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? It was time to create a model for understanding of cooperative governance.

Based on the results of the CDS Consulting Co-op’s board leadership team’s research and deep experience with food co-op boards, the Four Pillars of Cooperative Governance model (4PCG) offers directors and managers a framework for approaching their work grounded in cooperative values. Mark Goehring, board leadership development consultant with the CDS CC said, “It’s a capstone to decades of work.”

Four Pillars of Cooperative Governance

A model is a way of framing so that the parts and processes make sense. The 4PCG is not about changing systems but is a new way of making sense of cooperative governance. The CDS CC board leadership team thinks it addresses current gaps in strengthening owner relationships and democratic practices that are not clearly part of other business or governance models.

Cooperative governance is the act of steering cooperatively-owned enterprises toward economic, social and cultural success. It consists of answering key questions, defining roles and responsibilities, and establishing processes for setting expectations and ensuring accountability.

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—steering, making key decisions, working together for common goals—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.

Connecting the Four Pillars to the Co-op Organization

Mark Goehring said that when CDS CC did the research to come up with the underlying structure of 4PCG, they recognized that the things that make up the pillars (teaming, accountable empowerment, strategic leadership and democracy) are things that are already in place in food co-ops. “They are elements that are already present in the co-op model,” he said. “So we can use cooperative governance as a strategic concept—how do we make it be great?”

Goehring said that boards can use 4PCG to get a better understanding of whether one pillar in the organization is already strong or another needs to be strengthened. “It’s not about putting aside what you’re good at. These pillars are really about what we already do as cooperatives. It’s about recognizing that and strengthening them with intention.”

Chris Dilley, general manager of People’s Food Co-op in Kalamazoo, Mich., said that the model helps take things that are often implied expectations of cooperative governance or management and makes them more explicit through the Four Pillars. He said that 4PCG could be a tool that could also help build alignment because stakeholders would be focused on the same things. “I imagine us taking an inventory of all the different pillars of the model, possibly at the next board retreat, and identifying next steps we could take to improving ourselves,” he said.

As chief operations officer of the National Cooperative Grocers Association (NCGA) and director of the NCGA Development Co-op, CE Pugh is particularly involved in food co-op growth and how it can serve new communities. He thinks that applying the Four Pillars model of cooperative governance could result in greater clarity regarding individual co-op development, and better participation in communities.

Pugh also recognizes the value of the work that led up to the creation of 4PCG. “I go to a lot of co-op board meetings around the country, and there’s been tremendous progress made in the last ten years,” he said. Yet he thinks there’s still a gap in the conversation around co-op development. “I can see where co-ops focusing on the strategic leadership pillar could help this,” he added. “The idea here is to strengthen leadership and make that process of development easier.”

Rochelle Prunty, general manager at River Valley Market in Northampton, MA said that she thinks 4PCG will also be a useful tool for ramping up co-op efforts in communities around the country. “I think the next decade’s challenge is to strengthen the co-op business system, to break it out of the corners of the business world to have a bigger impact. The 4PCG sets up a new way to look at it and dissect different parts of the organization.” She also thinks that there’s a lot of opportunity for co-ops to do that work and have their efforts resonate with people. “What’s exciting is thinking about governance in terms of that. It will give us extra oomph to power up to make a difference.”

“The work could be groundbreaking,” Goehring said.

Read more about the Four Pillars of Cooperative Governance in the January/February 2014 issue of the Cooperative Grocer. Part I and Part II


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