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Board Report from the Consumer Cooperative Management Association Annual Conference

Cynthia Pristell
Central Co-op Trustee and worker

CCMA—Consumer Cooperative Management Association’s 58th Annual Conference was held in Madison, WI from June 12 – 14. This annual conference provides consumer cooperative leaders an opportunity to come together to learn, mingle, gather support, be challenged and inspired, as well as celebrate cooperative organizations’ accomplishments. This year, eight Trustees from Central Co-op’s board, including myself, and four members of staff attended the conference. 

The conference educational composition

There were ten educational tracks which contained workshops designed to address different aspects of management and leadership. Two tracks targeted for board governance development experience levels: new and more seasoned board members and/or officers. The remaining educational tracks covered ideas and information for various management roles and for specific areas focused on cooperative business development.

Conference overview

Anne Hoyt, a professor at the University of Wisconsin and the CCMA program director, retired after organizing some 25 annual conferences. We welcomed the NCGA for stepping into the role as the next generation of CCMA conference organizing. As a whole the workshops were comprehensive, providing helpful tools and resources for the Central Co-op board. There were networking opportunities where we reinforced what was discussed in the workshops and shared industry-related experiences. To hear different experiences, perspectives and cultural history from the two keynote speakers was moving.  Their keynote speeches were not only informative, but also challenged the audience to think differently about how we can impact lives including our landscape, and to think/look at the work we’re doing and how we can improve accessibility.

Take aways

The most impactful take-away from this conference is gaining a better understanding about the roots of cooperatives and accessibility to anyone. Consumer cooperatives such as our Central Co-op are continuing to live out and act on behalf of our civil rights. Therefore I think it is very important for staff members, member-owners, and board members (including those yet-to-be) to consider the work and purpose of consumer cooperatives as a continuation of the civil rights movement. This is the foundation of our cooperative principles for which businesses like ours are formed: To have the right-to-know and to choose; to have accessibility to quality food that does not derogate our earth (e.g. land, air, plant or animal) or exploit the people that bring food to us; to uphold and fight for equality; to conduct ourselves with humanity while caring for the earth and all of its people; and to conduct ourselves with civility. It is my desire that we do so with a willingness to embrace cultural differences.

Keynote speakers

reginaldoReginaldo (Regi) Haslett-Marroquin and Venice R. Williams were the two keynote speakers: Below you will find an excerpt from their bios and a web link to find out more.

Mr. Reginaldo (Regi) Haslett-Marroquin is the Chief Operating Officer at Main Street Project. It is working to build a socially, economically, and ecologically sustainable food system with the power to revitalize rural communities. What's unique about our approach is that it combines economic development principles and social justice values with a deep understanding of ecological connectivity. http://www.mainstreetproject.org/

 

Ms. Venice R. Williams is the Executive Director of Alice's Garden and its visionary leader.  She calls herself a cultural and spiritual midwife, strongly believing she was put in Creation to help bring forth all that is good and whole in people and places. She has been doing just that in Milwaukee for the past twenty-three years. http://www.alicesgardenmilwaukee.com/

Learn more about the conference at http://ccma.coop/.

 

Board Note to Owners: Restructuring the Board Committees
Quarter 1 2014 Historically, the Board of Trustees had four standing committees that were created to help the Board with its work and engage members: Policy and Bylaw Review, Finance and Audit, Owner Involvement, and Product Issues. Last January, the Board recognized that the Articles of Incorporation and Bylaws of the Co-op required complete revision, so the Policy and Bylaw Committee was suspended and ultimately decommissioned.

Meanwhile, the Co-op's (then) new General Manager, Dan Arnett, attended committee meetings and saw that much of the work should be or was already being performed by staff, creating confusion of roles. Also, following a period when the Co-op had no general manager, the Board also recognized the need to change from being a working board to a governing board. After investigation, we determined that a Policy Governance framework was appropriate, defining clear roles and responsibilities of board and management. You will find, and we recommend you read, the current Central Co-op Governance Policies handbook under the 'Governance' section of our website.

The Finance and Audit Committee was ended in June, with general acknowledgement that its functions are well-met by the Co-op's finance director.

The Owner Involvement Committee continued to meet through the 2013 election cycle. Much of the work discussed by that committee was actually performed by Owner Services and funded through the operations budget, though some involved board consent.

The Product Issues Committee had its last meeting in November. As was true of all committees, its owner participation was low. However, the PIC created the Co-op's Product Guidelines, which dictate how the Co-op makes purchasing decisions. The guidelines will be updated by Co-op staff as they assess sourcing and sustainability issues and owner demand. Our sincere appreciation to all who have put their time into the organization, including trustees, staff, and owners. You can submit ideas, questions, and input about products or store operations through comment forms at the Central Services desk or to info@centralcoop.coop.

Finally, an Executive Committee of the board was suspended in early 2013 at the request of a group of owners, and is not included in our new bylaws. Subjects such as contracts, which require closed board meetings, will generally be discussed by the whole board in executive session after a regular meeting or in a special meeting called for that purpose.

Board elections approached in September, and our policies called for a board-appointed Nominating Committee. The committee was formed, consisting of a board member, a Human Resources representative, and a Co-op owner. This was the first time board candidates went through an evaluation process to be recommended on the ballot.

The Co-op's updated Bylaws, approved by the ownership in the September election, create a permanent Nominating Committee in Section IV, 4.1. It will be composed of owners, elected by the ownership, and charged with recruiting and nominating candidates for appointment or election to both the Board of Trustees and the "NomCom." (see page 9) In effect, the NomCom is no longer a Board committee, though it will consult with the Board to identify skills and experience needed by the Board for anticipated work.

Board work will now be carried out most often by working groups of trustees tasked to research and report back on specific topics. These will not be meetings, as such, for owners to attend. We are exploring a possible committee to focus on Board/owner communications - a high priority. Also we will discuss forming a committee or procedure for the Board to evaluate its own compliance with policies and bylaws, and you'll hear about these developments in future newsletter, Board Note to Owners. Meanwhile, please come to talk with us at the monthly Meet & Greet from 6-7 p.m. before our regular meeting, 7 p.m. on the second Tuesday of every month, at the Co-op's community space at 1900 E Madison St. Also, both in the store and on our website you can fill out an input form on any issues related to long term strategic planning, which is the Board's responsibility.

We are working toward forming a Top Leadership Team between Board and management, and will keep you updated about that going forward.

In Service and Cooperation,
Elaine Nonneman
1st Vice President
Brian Bessembinders
Trustee



Board Announces New Ends
January, 2014

"How does who I vote for affect how I buy groceries?" was one owner's Board election-related question to me recently. Good question! In truth: on a month-to-month basis, it doesn't. If you have a product request or feedback about current store operations, you should talk to store staff and management, via the website or in the store. The Board of Trustees is there to refine and monitor the guiding values and long-term philosophy that govern the store, which, to date, have been encoded in our Purpose, Mission and Values.

The Central Co-op Board completed the transition to Policy Governance in 2013 by formalizing our Ends policy. Policy Governance is a model that promotes healthy board/management relations by formalizing a process of goal setting and delegation.

Giving our General Manager clear goals, and a mostly free hand to meet them, supports his ability to further delegate and empower all employees, which in turn allows them to be more responsive to you. In Policy Governance, the clear goals are called "Ends," and the mostly free hand is established with "Means" policies, which draw lines of what's unacceptable.

The Board established Means earlier this year. In December, we formalized our Ends policies. The GM is required to report on these Ends to the Board of Trustees annually. Meeting these are the goals of his role, and will be reflected in the goals he sets for the rest of management and staff, and thereby apparent to you as you shop, read communications from the co-op, or attend activities sponsored by the co-op. If you don't see these coming through, first inquire with management and then the Board. If you think these aren't the right goals or something is missing, that's where the Board comes in!
You can find the full policy set here.

Central Co-op Ends:
Through owning, supporting, and serving Central Co-op, owners shall enjoy a community enriched by...
- A friendly place to buy healthy, affordable natural foods and goods.
- A sustainable and innovative cooperative business that models financial, ethical and environmental best practices.
- A go-to resource to learn about buying, cooking and eating healthy foods; as well as a place to learn about how to better support the cooperative economy, local agriculture and the environment.
- A stronger, more robust local food system that supports diverse and independent producers.
- A gathering place that creates connections and encourages community involvement and empowerment.
- A fair and equitable employer that provides benefits and livable wages as well as opportunities for professional development to its employees.
- A vibrant cooperative sector, both locally and globally, that actively demonstrates cooperation.
A better understanding of and appreciation for the cooperative principles and the ability to participate in a democratic decision-making process.

Shaula Massena
Board Treasurer


Board Note to Owners
November/December 2013

While tabling in the store to remind owners to vote in our September elections, I felt I was meeting a cross-section of the Central Co-op ownership, and it was invigorating! Thanks to all of you who voted: the Board candidates were approved by a wide margin. This new Board is already unanimous in recognizing the need for improved owner engagement: Ways to continuously hear ideas and interests of a significant cross-section of the co-op's ownership.

This challenge is not unique to Central Co-op. What does or should democratic ownership look like? What happens when over 35 years, a co-op that originated as a small buying club reaches over 10,000 owners and $20 million in annual sales? What does growth mean to you? Does it mean more consumer choices? Greater influence in building a localized economy? Expanding and opening more stores?

How will you participate in shaping the next 35+ years for Central Co-op? A patronage dividend system will be one way members both get back a percentage of their shopping dollars and also make a contribution to the capital needs of this growing business.

We operate in a highly competitive industry environment and the Board will soon engage in strategic planning around the question of what competitive advantage Central Co-op holds that can be better promoted. Your perspective on this question is a key to what the Board will draft as its objectives for the co-op's long-term sustainability, referred to as the Board's "Ends" policies.

You have input forms at the front desk and opportunities to talk with trustees in the hour before our regular second Tuesday board meetings. We look forward to opening more avenues of communication between Board and owners. The best prospects for Central Co-op's future lie in the engagement of its ownership. We are eager to chart that course with you.

Elaine Nonneman
Board of Trustees President


Board Note to Owners:
September/October 2013

Greetings Central Co-op Owners!

It has been a busy but beautiful summer! I'll share two of my highlights with you:
June saw many of our trustees in Austin, TX for the annual Consumer Cooperative Management Association (CCMA) conference where we networked with cooperators from around the country, shared best practices, and discussed how to grow and strengthen the cooperative economy everywhere.

In early August, Biosafety Alliance's international conference, Justice Begins with Seeds, was held here in Seattle. Food and social justice activists and advocates gathered for two days to learn from each other and strategize around growing a food system that is healthy for people and the planet. Dr. Vandana Shiva, Indian food democracy activist, gave an inspiring talk with good natured humor. She will be back around for Yes! Magazine's annual fundraiser on September 12th (see page 14 for details). If you haven't seen her in person, it's worth making it a priority.

And now, as we approach the end of the summer, it's time for our Annual Elections! The Board has been working hard for months to craft updates to our Articles of Incorporation and Bylaws. What we have presented to you on the ballot to vote on this month is the product of hours and hours of deliberation, consultation, legal vetting, and owner feedback. We hope you like what you see! Along with the documents themselves, there is a summary presentation of the proposed updates available on the co-op's website. The Board is holding informational forums to help you navigate the documents and ask us questions in person. The next scheduled forum is Tuesday, September 24th from 6 to 7:30 p.m. We hope to see you there!

With I-522 on the ballot and a mayoral election coming up, there are some exciting opportunities before us to participate in the democratic process. We hope you'll start by casting your ballot (now available online!) for Central Co-op.

In cooperation,
Shannon Tyman
Vice President

Board Note to Owners: Meetings, Policies, Bylaws, Patronage
July/August 2013

New Board Meeting Time
Hello Central Co-op Owners! The board has decided on a new format for its regular meeting on the 2nd Tuesday of every month. The business meetings will now start at 7:00 p.m., and we'll have an informal opportunity to meet with trustees beginning at 6:00 p.m. for owners, including prospective board candidates, to talk with trustees during that hour. Our next board meeting is on July 9. Welcome!

New Board Policy System
Over the last few months the board has been working to revise our governance policies in consultation with Todd Wallace of the CDS Consulting Co-op. Todd also serves on the board of People's Food Co-op in Portland, and has helped our board to create effective policies that clearly delineate roles, responsibilities and accountability.

New Co-op Bylaws
Central Co-op is a consumer owned and democratically run organization. As owners each year we have the right to vote. Part of this right is the obligation to elect individuals to the Board of Trustees who will collectively represent the ownership. Owners also vote on the Articles of Incorporation and the bylaws governing our organization. While Central Co-op is still, as always, your friendly neighborhood co-op, we are growing and are on track to exceed $20 million in sales this year. This growth has brought with it both benefits and challenges. For one, our governance system has been strained and our bylaws, first written in 1978, no longer suit the sophistication of our operation, or best serve our owners.

The Board of Trustees is working with another CDS consultant, using its Fresh Start Bylaw Template, to rewrite the bylaws of our organization. Once they are completed and reviewed for compliance with WA state law, the new set of bylaws will be presented to our owners for voting on the September ballot, along with trustee candidates. At least one open forum and other opportunities for owners to discuss these changes with trustees will be available in the weeks ahead. Keep your eye on the co-op website and newsletters for updates.

Patronage Rebates
We are not the only co-op in this process. Leslie Dreifus, Board President of Flat Bush Food Co-op in Brooklyn NY, said "Now that the bylaws give a better definition about how they operate, the legal changes will help the co-op to enhance fairness and stronger profitability." One means for our co-op to raise and retain capital to meet the demand for growth is to move from a discount system to a Patronage Rebate system. Patronage rebates allow our co-op to gain tax advantages on a significant portion of our profit. This is one of the few advantages that cooperative businesses have over speculative capital funded corporations.

Fulfilling Our Purpose
These legal and financial changes will allow our organization to, in the words of our Purpose Statement: "safeguard our owners' trust by conducting our business in a financially sound manner," and "help the community to provide itself with wholesome food and products that are produced and distributed in a manner respectful to the earth and its people."
Sincerely,

Brian Bessembinders
BoardTtreasurer


Board Note to Owners - Letter from the President: Board Changes, Inside Trustee, Owner Grievances

May/June 2013

Warm greetings to the owners of Central Co-op! Many of you know me as a new trustee in 2012, and my becoming Board President in the March meeting may have surprised you. I'm writing here on recent decisions of the board, and reasoning I have followed in these, to acquaint you with me. This is not a message speaking for the board.

Inside Trustee
At January's board meeting, a group of owners on Co-op staff presented a list of grievances related to governance practices, including the cancellation of voting rights of the Inside Trustee (IT). That position is defined as Ex-Officio in Bylaw 5.3: "The employees of the corporation, other than management shall elect an employee to the Board for a one, two or three-year term according to rules established by the employees." The other ex-officio trustee defined in Bylaw 5.3 is our GM: "The General Manager shall be an ex-officio non-voting member of the Board..." Only the GM position is defined as non-voting. Bylaw 5.4 states: "... each remaining trustee shall be elected by the membership and shall serve for a three-year term... No membership elected trustee may serve for more than three (3) consecutive terms." Note the distinction between trustees elected by membership and by employees. You can find the Articles and Bylaws on our website.

Board Policy 105.2 on the Inside Trustee references meeting minutes as far back as 4/93. It states: "The Inside Trustee has the same legal and fiduciary duty as every Trustee to act in the interest of the owners." And: "Inside Trustees will fulfill all the duties and responsibilities of the Board, and will have an equal vote." These, for me, were the most convincing terms in our governing documents regarding the IT vote question.

Though the presentation of grievances was quite disruptive in the January board meeting, I read them carefully afterward. I saw that many were legitimate, and communicated that belief to the board. Subsequent conversations with various staff members confirmed that during the period when the Co-op was without a GM, boundaries in responsibilities between board and operations were seriously affected.

In April 2011, a group of owners on Co-op staff had challenged the right of the IT to vote. The issue was debated extensively by the trustees, and referred to an attorney for a legal opinion. This brought everyone's attention to inconsistent and faulty language in the Co-op's Articles and Bylaws. Employees were granted powers in the Bylaws without being defined in the Articles as a class of owners or stakeholders. In Bylaw 5.3, "employees" elect an "employee" to serve as a trustee, while in Bylaw 5.4, "all other trustees are elected by the membership." The attorney based her opinion on the need to define classes of membership and recommended revising our Articles, but didn't address the IT's right to vote. In July 2012, the board reversed Policy 105.2, eliminating its language on the IT's right to vote. It did not revise bylaws in the 2011 or 2012 elections to get member approval of this change.

This was the basis of the IT vote grievance at our January meeting. The board decided to pursue further legal opinion to resolve the issue. We ultimately sought counsel from 3 attorneys. The most fully researched did not refute earlier opinions, and showed that they could not be reconciled to provide an answer. Referencing standard jurisprudence applied in such cases, he based his opinion on bylaws in effect (the standing will of the membership); evidence that the IT position has been in place for 3 decades; and testimony from one of the earliest owners, a staff member who had also served on the board, that the IT always had voting rights. By more than 2/3 majority, the current board accepted the opinion that it is legally defensible to continue IT voting rights, and restored the original language in Policy 105.2.

New Officers
This took place in our March 9 meeting, and meant prior votes of the IT would count. At the January 8 meeting, in response to revelations about problems in governance, trustees initiated a vote for new board officers. Kristina Kokonis remained president, the treasurer's position changed, and I became 1st vice president. Between those meetings, an appointed trustee disclosed that she had not been an owner in her own name at the time of her November 2012 appointment. At her request, we held a vote for reappointment, however, with the IT vote counted, the resulting tie would mean "No"; she chose to withdraw rather than await resolution on that issue. With restoration of the IT vote, and loss of the appointed trustee's vote, a new vote for president was called at the March meeting, and I was elected.

Policy Governance
Another outcome of our focus on governance is the board's pursuit of a different form of governance. We spent two months exploring various approaches, and recognized that Policy Governance (PG) founded by John Carver offers a systematic framework we need. In basic terms, the board writes proscriptive rather than prescriptive policies, stating parameters or benchmarks within which the GM has freedom to make decisions. Policies define parameters for the board as well as the GM, thus better distinguishing their respective roles, responsibilities, and obligations to the membership, allowing full concentration on their specific duties. The board writes a monitoring system to ensure policy compliance, and modifies policies as needed over time.

Strong concern was expressed about adopting a trademarked, pre-defined set of policies. We do NOT expect our policies to adhere strictly to Carver terms, and will qualify them accordingly, in writing.
The most convincing assurance that this is common practice is the great number of successful food co-ops around the country which have adopted PG, and describe how it is applied or modified to meet their unique and changing needs. Good Foods Co-op in KY (where our GM Dan Arnett comes from), Seward Community Co-op in MN, and Weaver Street Market in NC are examples. Nothing about PG has prevented them from being representative of and responsive to their communities, with innovative and progressive cooperative business practices.

Professional facilitation is available to assist boards to draft policies, transition to them in practice, and modify as needed. Our board has contracted for a year's consultation and training with CDS Consulting Co-op (www.cdsconsulting.coop) for board leadership development and drafting of new governance policies. It will be difficult at times to make this shift, but the board is proceeding on this path.

Moving Forward
We have a great deal of work ahead of us. It's wonderful how Co-op staff have not only made Central Co-op profitable again, but have built up the business and membership to where we are reaching capacity concerns! With competitive market pressures in Capitol Hill and the Central District that we need to be mindful of, board visioning for the Co-op's growth will require a 5-10 year range, not only in terms of expansion but capitalization. Along with governance work, we are tackling needed changes to our Articles and Bylaws to ensure the Co-op can utilize provisions in the Revised Code of Washington specific to cooperative development. I look forward to facing the Co-op's future.

Elaine Nonneman
Board President


Board Note to Owners: Building for the Future

March/April 2013

Greetings Central Owners,
This is a short note from your current Board Chair, to share with you some current challenges on our table and some imminent changes we are facing as an organization.

First, as you may know, we have a new General Manager, Dan Arnett, as of Dec 1, 2012. Dan is a world-class cooperator and we are so very proud (and very fortunate) to be working with him during these challenging times. We are all learning about one another, learning to work together and seeking to refine our organization in all ways, to deepen the expression of our mission and founding purpose.
We are now in a defining moment of Governance: shifting steadily from the practices of a past working board, to those of a strong governing board. Our size, our growth and the needs of our organization demand that we cultivate greater vision and respond to the realities of our effectiveness as a Board, in relationship to our worker body and our Ownership. We welcome you to be engaged in this process by attending our regular meetings of the Board of Trustees, on the second Tuesday of every month, at our new activity space at 1900 E Madison Street.

Also on our table is the creation of a "Building Committee." This ad hoc team was selected to create viable strategic options for Central Co-op, specific to the future of our building, its lease and renewal. We are reaching into the neighborhood, the community and searching for resources to guide us towards the very best options for these changes ahead. Please stay tuned as we will be seeking your engagement as Owners, as the committee determines what will support sustainable growth and long-term viability for our beloved co-op.

We also are coming up on our Annual Election of the Board of Trustees in September. This is a vital year for Central Co-op as we are looking forward at some big changes. We are searching for qualified, passionate and dynamic individuals to run for the Board. This is co-operative democracy and engagement at its essence. We are currently working as a board toward deeper effectiveness, greater opportunities for cooperative integration, community education and well, fun. If you have any interest or questions concerning running in the election for the board, please feel free to shoot me an e-mail at kristinakokonis@centralcoop.coop with your inquires. I would be happy to give you as much information as I can about the great commitment it is, and hopefully encourage you toward participation in cooperative stewardship. There are great rewards and great things to learn.
Thanks for listening.

Onward!!!
Kristina Kokonis
Board of Trustees


Board Note to Owners: 2012 Milestones

January/February 2013

Hola Central Cooperators,
2012 has been a milestone year for our Co-op and is now coming to a close. My, oh my! During my first year as a trustee I've witnessed shifts in our Co-op's operational culture. Hot off the press:

• A looming labor strike at our main product distributor UNFI;
• The online newsletter Central Beet launched by editor webster walker and the Cooperative Advancement Team;
• In his first year our new graphics guru Tony Richardson has elevated our visual presence;
• Our marketing diva Amina Parker produced several shopping aids including a gluten-free shopping guide which includes a related product store locator guide;
• The Co-op has a wonderful new offsite administration office at 19th and E Madison which provides an easily accessible community space;
• The office move required an overhaul in our server system; IT Lead Chris Chapin led the charge to synchronize both locations;
• Dan Quinn-Shea completed his first year as Finance Director. Under the restructure of our finance department we have a new position Accounting Manager; Jenny Gerber held this position over 4 months, with Laura Pautler and Lynn Snyder as the remaining members of the 4-person finance team;
• Recently, at the recommendation of Mr. Quinn-Shea and the board's Finance and Audit Committee, the board approved moving the Co-op's savings to a local cooperative banking organization, Salal;
• Our Human Resources Department concluded its transition for which Sonia Lewis has worked for some 18 months, and Tyler Burch's return to HR from his year as Interim General Manager;
• Our three directors Jean, Dan Quinn-Shea and Eric Lundquist then served an interim term as the General Management Team;
• And on December 10 our year-end concluded with a bang with the eagerly anticipated arrival of Dan Arnett's first day of employment as Central Co-op's General Manager.

The icing on the gluten free cupcake were the awards from Seattle Weekly as Seattle's Best Grocery Store of 2012, and from Seattle Magazine Reader's Choice: Best of the Neighborhoods as the best grocery store in Capitol Hill/First Hill. These accomplishments were achieved by the dedication of the 120-some Central Co-op staffers. Thank you!

Also, I would like to give a shout-out to Grocery Manager Tim Zerkel for his foresight to negotiate an alternative source (distributor) for product in preparation for the looming Teamsters strike at UNFI. He and our sales team worked diligently to keep product on the shelves and minimize the negative impact to our Co-op. Job well done! On behalf of the board, I'd like to acknowledge the Co-op is very fortunate to have such amazing professionals working to provide our community with quality products and services that uphold our cooperative principles, purpose, mission and values.

Looking toward to 2013, I foresee the Co-op will be undergoing amazing things under the cooperative leadership of our new General Manager Dan Arnett. Keep a look-out for what's in the news during 2013. I would like to invite you to become engaged beyond your shopping experience by attending and/or participating in the wonderful events to be conducted during 2013.
Wishing you a wonderful season of holiday celebrations!

cynthia Pristell
Trustee