Who Decides? Owner Participation in Cooperative Decisions

Who Decides? Owner Participation in Cooperative Decisions

Patricia Cumbie | 14-11-2016


Cooperatives are a shared asset, managed for the common good of the owners.  At its heart, cooperation is a human enterprise that begins with relationships, predicated on the idea that the co-op’s strength is democracy and participation.  The ongoing quality of those relationships are built, strengthened, and even tested in myriad ways in a cooperative.

Structurally, co-op members elect a board of directors to make decisions on their behalf.  So when the co-op leaders need to make major decisions about the co-op’s future, what is essential for good governance in that process?  How do the people involved maintain clarity about who is responsible for making certain decisions, while at the same time work to include many others in the conversation? Can members and their elected leaders do this in a way that will make the cooperative model work for generations to come?  How do owners contribute to the long term sustainability of their co-ops—no matter where they fall on the spectrum of involvement?

thane-joyal-pullout-solutions-2016-11These are the questions that challenge boards and co-op leadership today.  The more a cooperative grows, the more people there are to include in the process of relationship-building and outreach.  Engaging owners on the issues that matter to their co-ops, and moving forward on decisions, is a balancing act that takes trust, infrastructure, and continual adaptation.

Thane Joyal, a board leadership consultant, sees cooperatives as vital organizations in the quest for more democratic and participatory institutions in our society.  Democracy is an integral part of cooperatives. This key concept appears in all three elements of the ICA’s Statement on the Cooperative Identity: definition, values and principles. “Michael Hartoonian has described democracy as the conversation that precedes a choice or decision,” she said.  “If so, then what organizational structures will support the best conversations?”  She thinks cooperatives are uniquely positioned to address this question.

Joyal and consultant Art Sherwood have been inspired by Elinor Ostrom, the Nobel Prize winning economist who developed eight principles for Common Pool Resources institutions and collective self-governance.  The aim of those principles is to help set ground rules for how people work together to manage resources they have in common.

Ostrom’s principles include getting close to the source:  deciding who is most impacted by a particular decision, and including them in the process.  Democracy doesn’t mean everyone will agree, but that people have meaningful opportunities to participate.  Ostrom believed that collaboration regarding management of common resources is possible when people are guided by their own desire to solve a problem they have recognized, rather than by outside requirements.

art-sherwood-r-pullout-solutions-2016-11Joyal thinks that often organizations ask for feedback from people too late in the process, or when a decision has already been made.  Even when best efforts are made to engage, even just the perception that efforts to seek input were not authentic can cause conflict or dissention.  At that point, people might start to “take sides,” and the ‘problem-solving impulse’ might be diminished.

In the case of cooperatives, “We have a real opportunity to reimagine engagement and involvement,” she said, noting that as a start, we should routinely consider how participation and engagement can best be carried out well before the start of any decision-making process.  Of course there will always be decisions that must be handled confidentially for legal or strategic reasons, but we can improve even those decisions and their impact on the cooperative by carefully planning and striving for the maximum level of participation and transparency.

“We have to start with the hard questions,” Sherwood said.  “It might seem easier to make plans and go sell it to get buy-in for decisions already made, but that might cause an immense amount of angst.  Building alignment first, makes for better decisions and makes acceptance more likely.  He thinks co-op leaders need to understand the issues, and proactively design the engagement process.

rebecca-torpie-pullout-solutions-2016-11But starting with the hard questions takes planning and resources—and that’s where preparation comes in.  “Providing meaningful opportunities for people to participate takes time.  We need to get ready and understand what the issues are.  We’re not always that good at it, and sometimes we are scared of it,” Sherwood said.  “We need a next-level set of processes, including facilitated conversations where you get all the concerns on the table up front.  It’s a fundamentally different way of doing things than other types of corporations.”

Sherwood thinks that related to process boards and co-op leadership need to have foresight when seeking engagement.  By looking to the future and addressing those big questions, co-ops discover what they need to learn and who could be involved.  “Foresight is a central ethic of leadership,” Sherwood said.  “When you wait until the last minute, you risk making bad decisions.”

Co-ops also need comprehensive systems and resources to encourage participation, especially as they grow, so the divide between board understanding and co-op owner education doesn’t get wider.  “The communication lines have to be very open so there’s a feedback loop,” said Rebecca Torpie, a consultant with the Power of Participation (POP) program.

She said there are two components to that communication feedback loop:  transparency and education.  “You can’t wait for a kerfuffle to be transparent.  Always offer the opportunity for that relationship to thrive.  It can’t be one way.  The loop has to come back so people feel like they are being heard and are part of the process.”

holly-fearing-r-pullout-solutions-2016-11Torpie also pointed out that it’s important not to dismiss the less obvious ways people participate in the co-op.  “Supporting community partners, shopping, using the suggestion box or social media are all important,” she said, noting that participation and engagement often fall along a continuum.  “It’s important that members are connected at all different levels.  You can’t participate with everyone at all times, but being connected in many ways as possible will tear away barriers.”

Social media strategist Holly Fearing said, “When you have thousands of owners you can’t satisfy everyone all the time, but there has to be listening.  The co-op has to set up channels to receive feedback; and you must establish and socialize those available channels before people have feedback to give, not at the moment they do.”  She also noted that when a business reaches out, it also has to keep its promise to be responsive.  “If you ask for feedback, you have to be prepared to respond.  You can’t let it fall off your plate or take weeks.”

Fearing believes strong two-way communication is achieved when the co-op is transparent about its process and decisions.  It creates a baseline for trust and the potential for enhanced participation.  The co-op also needs to provide information to members about how the co-op is governed and managed.  “If you have a group of individuals who believe in and understand what the co-op is trying to do, you can have an informed conversation about what’s the impact we want the co-op to have, and how do we achieve that together,” Fearing said.

About the Author

Patricia Cumbie

Marketing & Communications

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