Of all of a cooperative’s constituencies—board, management, staff and members—the role of the board of directors could be the “mystery factor” at your co-op. Apart from the people who attend board meetings, the business of the board may be virtually unknown or misunderstood by the co-op at large. This unclear identity may have even made its way into the board room, with some board members unsure of what their job entails. The result may be misunderstanding and conflict within the board itself as well as with the manager and co-op membership.
As local cooperatives continue to expand their boundaries to include cooperation outside of their immediate geographic communities, strong board leadership is an important issue for future co-op development. “Boards involved in store operations will not be able to contribute to the big picture. Board members also need to have conversations about the best use of co-op assets and strengthening the national cooperative infrastructure,” said Marilyn Scholl, a board development specialist with the CDS food co-op consulting team. “Systems to help boards be more efficient will become even more critical.”
John Carver’s Policy Governance model is one system Marilyn advocates. Marilyn has been working in cooperatives for over 20 years, spending almost half that time managing retails. Her experience as a general manager, as well as board facilitator, has convinced her of the efficacy of Policy Governance.
Policy Governance is a system and a process of defining the role of the board and of the manager, setting down policies that guide the actions of each. By empowering the board and the manager to operate within stated guidelines, time-pressed boards can avoid the repetition and micromanagement that keeps them from focusing on leadership issues. In addition, Policy Governance gives the general manager the parameters from which to carry out day-to-day operations and for the board to be able to hold that manager accountable for delivering desired results. Policies are handed down from one board to the next so that new boards do not have to start over.
“Board systems come together under Policy Governance,” Marilyn said. “It’s not just a toolbox, each tool is designed to support and work with the other tools. You don’t have to remember board nominations or the GM evaluation, it’s built into the system. That doesn’t mean it happens automatically, but having a system makes the work more manageable.”
Marilyn also noted that Policy Governance can bridge the gap in some of the weaknesses inherent in a consumer-owned system, like lay people being responsible for complex business decisions and groups of individuals trying to supervise a manager in two hours a month. “Policy Governance uses board expertise well, it gets the board relating to the store on bigger issues as a representative of the owners, rather than as a shopper who may have concerns about products or parking.”
In Marilyn’s last ten years as a board trainer she has observed the culture of co-op boards move toward real leadership, yet “to keep what we value about cooperatives, we need to continually strengthen board and management,” she said.
What if board and management don’t see eye-to-eye on the co-op’s direction? Marilyn views the board-manager relationship as a two way street. Positive change can be accomplished through many means: board and management training, developing a board system, as well as doing the work of relationship building. Marilyn said, “It’s all part of the process of group respect. It’s not enough for the board and the manager to be strong, committed and skilled. The relationship also has to be strong. They have to work together effectively.”
Whether or not a board uses the Policy Governance system, it is important that boards devote time to their own development. “By annually setting aside chunks of time to work together intensively, either learning or planning, groups have an opportunity to build those crucial relationships. It’s better than an hour here or there,” said Marilyn.
The importance of a strong board has the potential for far-reaching impact on the co-op movement. “Now more than ever there is a need for boards to talk about values. They often talk about things like environmental protection, but they may not be thinking about the radical idea of consumers owning their food stores. Boards could be asking ‘As one of 300 stores around the country, what can we impact?’”
Can boards really be expected do this kind of work? “Of course,” Marilyn said. “There’s such a high level of commitment on boards in co-ops. It’s a tremendous asset we can turn into a benefit.”