Your elected Board of Directors has functioned since the first annual meeting in 2009 as a task-driven group to complete the steps necessary for opening Coop Market—fund raising, securing the lease of a former grocery store and estimating its remodeling costs, forming governing policies, and preparing to hire a General Manager (GM).
As we continue these important tasks, we must also being a transition to governing the cooperative. Governance requires periodically evaluating finances, monitoring policy performance, and supervising the GM to see if the needs of our member-owners are being met. These are very different roles from the hands-on approach and bring new responsibilities.
To guide us during this transition, your Board of Directors participated in a 16 hour leadership development workshop on November 11 and 12, 2011 with Todd Wallace, a consultant with Cooperative Development Services (CDS). CDS mentors and advises food cooperatives to “achieve growth, increase profitability, improve board leadership, strengthen management, and fully serve their members and community.” Board member Helen McLean hosted the training and potluck meals with cooking assistance from her husband Mike and Shaun Lott.
Mr. Wallace reviewed our legal roles and responsibilities, such as being informed on decisions and ensuring Member-owner values are met (e.g., fair wage and treatment of employees). It is a challenge to ensure the business needs of a profitable store simultaneous with meeting Member-owner desires for community outreach on food-related health issues and support of local agriculture.
We discussed at length the formation of policies for clear understanding of the roles and accountability of Board members and management so members understand how their needs and desires for the cooperative are met. Fortunately there are many models of successful policies that we can review and tailor to the unique circumstances of our remote community.
Patronage dividends are an important consideration. Cooperatives receive a substantial federal tax savings by returning at least 20% of annual profit to members. Some, all, or none of the remaining 80% of profit could be returned to members, depending on goals of the cooperative. For example, some or all the remaining profit could alternatively be used to prepare for an expansion in the future by replenishing equity (assets) of the cooperative that were used in opening the store. The more collective equity we have, the less we would have to potentially borrow with interest payments. Board duty includes educating member-owners about such options so they can be informed voters on business decisions.
Potentially the greatest workload of the Board is fast approaching. Mr. Wallace said the final months before the store opens are best described as “frenetic” because directors are working hard to help management with preparations. All want to ensure the cooperative opens the store by a deadline, serves its Member-owners the wholesome food they seek, generates more revenue than expenses, coordinates buying with local producers, and contributes benefits to our community, such as consumer education on food-related health and nutrition.
It is an exciting time!