In 1994, the BFC Board implemented the policy governance model, a framework of principles and policies for board leadership and decision making. Policy governance clarifies that the purpose of the Board is to represent the interests of shareholders and that the Board members’ work entails four tasks: link with shareholders, enact written policies, assure executive performance, and perpetuate the Board.
Link With Shareholders
Though all Board members are also shareholders of the Co-op, directors do not represent different constituencies. Rather, the Board represents the interests of all shareholders. Therefore, one of the Board’s most important activities is to ensure that shareholder needs and values are articulated. Current avenues to this information include surveys, focus groups, and the Annual Meeting.
Enact Written Policies
As the governing body of the cooperative, the Board steers the organization by establishing values and perspective. These values are written down as policies. In traditional board operations, policies tend to be developed ad hoc, driven by whatever issues are placed before the Board by management or shareholders. In contrast, with policy governance policies are developed systematically in four well-defined categories: Ends, Executive Limitations, Governance Process, and Board/General Manager Relations.
Assure Executive Performance
The only person who reports to the Board is the general manager. In addition to defining the Board’s role, policy governance defines a single goal for the GM—to achieve Board-stated ends within the boundaries defined by Board-stated executive limitations. The presence of clear, written policies describing Board expectations enable the GM’s annual performance review to be done fairly based on pre–established criteria.
Throughout the year the GM submits monitoring reports to keep the Board informed of progress toward the stated goals.
Perpetuate The Board
The final obligation of the Board is to perpetuate itself. Some boards suffer from significant turnover, leaving little or no institutional memory to help the next generation. To remedy this situation, the BFC Board focuses year round on recruiting efforts to find shareholders in the community interested in serving on the Board.
After reading this far, you may be wondering if policy governance is an unrealistic theoretical framework that will bog the Board down in bureaucracy. It isn’t, and it won’t. Policy governance is being adopted by many cooperatives across the United States. Based on their experiences, it promises to improve Board effectiveness.
Policy governance is not simply a hands off governing style; it is hands off the wrong things and hands on the right things. The right things are paying constant attention to the Co-op’s needs, defining BFC’s vision of the future based on the mission statement and values agreed upon by the shareholders, and empowering management with clear authority and responsibility to make that vision a reality. The wrong things would be focusing excessively on the past, or micromanaging operations.
Policy governance can have a profound effect on the internal culture of an organization. Ultimately, the Board’s style of governing the general manager has an impact on the way the general manager governs managers, and so on to the way managers govern staff. The outcome leads to a culture that provides excellent customer service and superior customer/shareholder interaction.
(Thank you to Food Front Cooperative Board president Scott Burke for the framework of this article.)
Our bylaws are both a legal document (required by the state) and a roadmap for the Co-op, which address:
- Purpose and Mission – Cooperative Principles
- Shareholder Rules, Meetings, Dividends, and Other Information Pertaining to Shareholders
- Board of Directors Powers, Duties, and Meetings
- Elections and Voting
- Fiscal Matters and Capital Stock
- and More!
History of the BFC Co-op
The history of the Brattleboro Food Co-op began with a small buying club in 1975. Today, the Co-op is a 14,580 square foot natural foods market and deli on the ground floor of a four-story building which also includes Co-op offices, a commissary kitchen, a cooking classroom, and 24 apartments…. Click link to read more.
100 Year Vision
In April 2002, the Board of Directors of the Brattleboro Food Co-op invited several people from an environmental group called Natural Logic to speak at that year’s annual meeting. Board members were beginning the process of educating themselves as well as shareholders about green building and sustainable communities. Their desire was to develop a framework of thinking that would go beyond the usual green design approach of doing less damage, to a more substantive one of regenerating the health of the larger network of interconnected systems… Click links to read more.