December 2005

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Board Report


Owner Involvement

by Dan Frost, WSGC Board Member

There was no Board meeting scheduled for November and so there is no new Board news to report since the October meeting that Megan Christiansen reported on last month.

This article will focus on two main points:
• the Co-op needs more owner involvement, and
• the Co-op needs less owner involvement.

Most of you reading this are owners of this business, so throughout this article keep in mind that I’m talking about you.

More involvement

Our Co-op needs strong, experienced, people with various skills and perspectives on our Board. This year’s Board election was almost uncontested—something I hope was an unfortunate fluke—but I certainly don’t want to speak only about becoming a Board member. Taking the time to vote, give us feedback, or even participate in the actual operations of the store are tangible ways to be involved. Indeed, simply being aware that ‘membership’ is really ownership and following the happenings of the Co-op month to month—as you are doing right now—is an investment that I have no doubt will benefit the Co-op as well as the individuals who make it. The main point is: in order for our cooperative to function well, we need owner participation—and yes, we need more of it particularly at election time.

I actually sense quite a bit of investment from a huge number of people in our Co-op, though. As an employee (I am the Co-op’s Operations Manager), I see people who care intensely about the Co-op every day. The really challenging thing I feel our owners face is letting go of control. It sounds silly to say, particularly while also arguing for more involvement, but even more so when you consider that one of the main reasons for cooperatives to form is to provide control to its owners. But that is precisely what I believe must happen.

Less involvement

Let me be more specific: it is virtually unheard of in the Co-op community to require the membership’s approval of the annual budget. We do, and the requirement encumbers the planning process by causing the staff to have to work much earlier than would otherwise be necessary to forecast a budget. Early forecasts are inherently less likely to be accurate. Then, a comparatively short time before the beginning of the year that the budget controls is to begin, we put the budget to referendum—all owners are asked to approve or reject it. If the budget were to fail this referendum, we would have quite a scramble to get one passed in time for the new year. The potential for such a scramble may be slightly less of a danger with our new fiscal calendar, but timing isn’t really the danger, in my opinion.

The danger is in the dynamic this sets up. The process is now like this: the staff proposes a budget, the Board approves or rejects that proposal and in turn proposes the budget to the membership for approval. Perhaps we should be holding the Board responsible for this kind of oversight. Is it fair to expect members at large to be aware enough of the issues at hand to determine the appropriateness of a budget—a budget that controls the expenditure of over 12 million dollars? Are you, the owners, not giving a subtle pass to us Directors when the final responsibility is not on our shoulders? Shouldn’t we be expected to deeply examine and actually approve or reject the budget?

Another, similar example is that that the rules governing our Co-op require the Co-op to get the approval of the membership when spending $50,000 or more on expansion. This rule is probably outdated and definitely worth examining.

Our Co-op is in active pursuit of expansion opportunities. It is not hard to imagine the dedicated and experienced people we have delegated to lead that search finding an opportunity that needed to be secured quickly or even quietly. Imagine the dynamics of being at a negotiating table with someone who knows how much your owners have been asked to approve for a given project. In order to properly accommodate this rule in the past, we have either made our owners’ approval a contingency of our negotiations (not a very strong position) or asked for broad approval ahead of time (a kind of ‘showing of our hand’). The question we are asking now is: why not put in place rules that are appropriate to the current needs of our business?

These are just examples, and I don’t really mean to use this space to argue specific points one way or another. I mean to highlight that the managers and Board of your Co-op feel change is necessary and to motivate owners to be involved in shaping that change. We believe that in order for the right changes to be put in place, input from a wide variety of perspectives must be accounted for. That is, after all, the essence of involved in a cooperative effort.

Seeking your input

So, as many of you are probably aware, seeking your input is precisely what the Board has embarked on doing. The rules I’m referring to are in fact our Bylaws and, other than Wisconsin statute, they form the most basic and core definition of what this entity that was formed communally over 30 years ago is and how it operates. The process to which I refer is an open-minded exploration of our Co-op’s needs and our owners’ interests. The Board has already held a number of owner focus groups to gather input about our current Bylaws and how they could change—and more are yet to come. You may also have seen an ad in this paper highlighting two discussion forums the Board has created to support member input and involvement. One is online, a Yahoo group: send an e-mail to or go to the website: The other is in our store in the form of a log book to record member input.

All member input is strongly encouraged as this kind of change is literally fundamental to who we are. Please take the time to keep informed about proposed changes and to voice your suggestions and input. As is of course appropriate, any proposed changes to our Bylaws will require the approval of our membership. Invest the time now in knowing the details about and motivations behind any changes—or suggest changes yourself! When the time comes, you will be ready to make an informed decision as to how to vote.