Resilience required for co-ops

In response to Rusty Sivils’ column [“Get Back: French Broad Food Co-op Has Lost Sight of Its Original Principles,” May 28], Rusty’s observations are not totally without merit. As organizations grow, it is harder to maintain the close connection to each other and the group as a whole. Co-ops have to work hard to make sure owners understand the changes that are inevitably going to take place and why. It is also the responsibility of the owners to ask questions when they don’t understand or agree with the changes in policies and store operations. However, no organization can please all the people all of the time. It is the work of the board of directors to consider all input and then make policy decisions that are in the best interest of the organization.

Take, for example, the decision to go to a patronage-rebate system. When co-ops give owners a 5 percent discount at the register and the business is operating on a 2 to 3 percent profit margin, this is giving away all of the profit (and more) even before that profit is made. The Hendersonville Community Co-op operated in the red for years with a 5 percent owner discount. When equipment broke or the landlord raised the rent, we had to borrow money to cover the costs. With the patronage rebate system, if the co-op makes a profit, part or all of the profit can be returned to the owners. The profit may also be retained and saved for emergencies, used to pay for needed equipment or saved for future expansion. Three years into the patronage rebate system, HCC is much stronger financially, has money in the bank for future expansion and usually gives back some of the profit to the owners.

Rusty has been involved with FBFC for some time, but what he says about governance is not the way I understand it. First, the trainers used by co-op boards are not consultants with the National Cooperative Grocers Association. They are from the Cooperative Development Services, an independent group of highly experienced and dedicated board members from successful co-ops across the country and specialists in the governance model we use called policy governance. The basics of this model are as follows:

1. The board writes and adopts policies for the organization.

2. The board hires a manager to carry out the policies and make all decisions regarding the operation of the store. The board does not get involved in the operation of the store because that is what we hired the GM to do.

3. The board monitors the operations of the store through the policies. Those policies can be changed at any time and can be as broad or specific as necessary.

4. The board speaks with one voice. Only the board as a whole has authority over the GM, and it has all the authority it needs to hold the GM accountable.

Is policy governance a perfect governing system? No, but it is much better than anything else out there. It is not complicated, but it is a different way of thinking and takes time and study to truly understand.

As board members or owners, sometimes we just want to get in there and fix everything that we think is wrong with our co-op. Trouble is, everyone has his or her own ideas on how to make things better. The real job of the board is to imagine and dream about what all of us want the co-op to be in the future. This is done by learning about our community, linking with owners to help to understand their wants, needs and values, and studying the issues.

— Steve Breckheimer
President, Board of Directors
Hendersonville Community Co-op
Saluda

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4 thoughts on “Resilience required for co-ops

  1. Anne Craig

    Thanks, Steve for your clear articulation of the roles and responsibilities of the board of directors in keeping co-ops afloat! It certainly is easier to stand outside and criticize (as Rusty does) than role up one’s sleeves and work hard and long and cooperatively to keep a co-op alive for all the community! Your letter is an example of one of the cooperative principles: cooperation among and between co-ops! Thanks for writing it!

  2. coops destroy the environment by obscuring the fundamentals of pollution. Immigration and public schools, which exploit childless taxpayers.
    Also there are far better governing systems out there, try direct democracy!

  3. Rob Close

    alan, work on your sarcasm, i can’t tell. if you ARE serious, that’s funny though. nice letter.

  4. Big overpopulation groups that say schools reduce population are using third world data. In the industrialized world, parental subsidies increase population and the biggest one and most locally actionable one is public schools.

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