Governance Toolbox: for Directors of Natural Food Co-ops

Governance Toolbox: for Directors of Natural Food Co-ops

  |  December 31, 1997

by Mary Courteau & Corinne Shindelar

In the fall of 1996, over 200 directors of natural food co-ops were surveyed for a project funded by Northcountry Cooperative Development Fund and the National Cooperative Bank Development Corporation. The goal of this joint project was to provide enhanced assistance to borrowers. By directly contacting board members, the survey aimed to reach a critical mass of its target audience. Since directors are key players in the success of any cooperative venture, the survey’s goal was to uncover common issues at the board level. Knowledge of these issues would help focus this toolbox in the areas of leadership and governance training.

The survey had two primary goals:

  • Allow directors to reflect on their work and identify training needs.
  • Identify gaps in existing training opportunities.

Survey questions dealt with board systems, planning, financial controls, board/manager relations, and membership issues. The responses were informative and provoking, and revealed themes that were repeated in co-ops of all sizes. Most noteworthy, the survey clearly showed that board members want to succeed as leaders, but felt they lacked necessary tools and training to be most effective.

Directors had the same concerns at all stores, regardless of store size. Areas of dissatisfaction tended to be similar: for example, successful nominations and recruitment received the lowest satisfaction scores. On the other hand, most directors indicated high levels of confidence in their managers.

Directors were generally candid about their leadership performance: “We need to recognize that the board should provide some expertise in certain areas for the successful leadership of the co-op” ($1 million store). “The board has lacked strong internal leadership” ($4.5 million store). “Board members are conscientious, but not adequately trained” ($1.5 million store). A number of comments identified leadership issues: “There is a strong tendency to just accept what the General Manager gives the board, rather than for us to be the leaders, experts, or even evaluators” ($1 million store). “We are fortunate to have an experienced manager who encourages board development” ($4.5 million store).

When asked whether systems such as by-laws, mission statements, meeting minutes, and management reports are in place, most directors indicated satisfaction. However, when asked to assess their levels of comfort in using these systems, they were less confident. For example, most directors indicated that they receive timely, accurate, and regular financial reports, but said that they needed training to interpret those reports and benchmarks. Most directors said that their co-op has a clear statement of purpose, or mission, but few of them understand the market forces that their co-ops are operating in. Getting “up to speed” as a new director seems to take at least a year, but few boards conduct an orientation for new board members.

The challenge for cooperatives is to provide effective and innovative training that helps directors figure out how to keep in touch with members, and use their collective wisdom to provide effective leadership.

This manual is a collaborative effort among cooperative board trainers, directors, managers, and co-op business associations. Best practices were borrowed from cooperatives, non-profits, and conventional corporate businesses, presenting a comprehensive framework for building an excellent board of directors.

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