by Tom Franks
The Brattleboro Food Co-op subscribes to the seven co-operative principles, the second of which is Democratic Member Control. This principle is described as follows by the International Co-operative Alliance:
“Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives, members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.”
Blue Print for a Co-operative Decade states: “In the midst of this uncertainty and suffering, co-operatives can provide some hope and clarity of direction for citizens around the world. Uniquely amongst models of enterprise, co-operatives bring economic resources under democratic control. The co-operative model is a commercially efficient and effective way of doing business that takes account of a wider range of human needs, of time horizons and of values in decision making.”
At BFC, we have one person, one vote, but not for every decision. For most decisions, the shareholders have delegated their power to the Board of Directors, which they elect through a democratic process. This is a representative democracy. Some decisions require a vote of the shareholders, such as changing the by-laws (last done in April 2009). For other decisions, the board may choose to seek the shareholders’ preference by any means deemed appropriate. And finally, at BFC, shareholders have the ability to request a vote on “any proper issue submitted by written petitions signed by five percent of all shareholders” (By-laws, Section 4.2a). There’s lots of democracy here for the asking, if we care to exercise it.
Democracy is not achieved simply by setting up a system with voting. Some of the other requirements for democracy include obligations such as:
• Seeking information about the issues the organization faces;
• Watching carefully how the power delegated to their representatives (the board) and agents (management) is used; and,
•Expressing members’ own opinions and interests.
An effective and efficient democracy encourages its membership to develop competence in each of these skills. Co-operatives address this need with the fifth principle of Education, Training and Information (perhaps the topic for a future FFT article).
Democracy is not just an ideal in co-operatives, it is a key element of their success. In a recent article, Marilyn Scholl and Art Sherwood presented a new model of co-operative governance they call the Four Pillars (Teaming, Democracy, Strategic Leadership, and Accountable Empowerment). In this model, each part of the co-operative (staff, GM/CEO, board, and member-owners) is a critical building block supporting the whole.
According to the authors, the Board of Directors “must practice, protect, promote, and perpetuate the democratic nature of the co-operative.” They describe a healthy democracy as one where:
• Owners have the opportunity to meaningfully participate in reflection and change in the co-op;
• Owners can participate regardless of their wealth, investment, patronage, values, or beliefs;
• Owners have information, a voice, and representations; and,
• The board cultivates relationships with the owners and seeks to build a shared understanding and alignment about strategic decisions.
In a related whitepaper, Art Sherwood compares behaviors of co-operative boards with corporate boards. He posits a framework of behaviors common to both types of boards: teaming, vigilance, and strategic. To co-operatives, he assigns a fourth behavior, “advocates for democracy.” He also notes that co-operative democracy is susceptible to all the ills of democracy as practiced in the rest of the world. One such problem is “democratic despotism,” defined by Alexis de Tocqueville as when things are good and the people are happy; Sherwood notes that co-operatives are especially vulnerable to this malady. “This long-term customer satisfaction may in fact lead to democratic muscle atrophy.” There are other perils to democracy that read like the seven deadly sins: “Being Played for Suckers”; “Tyranny of the Majority”; “Tyranny of the Minority”; and “Pragmatism.”
Sherwood suggests that to avoid these pitfalls, boards can advocate for democracy by:
Practice – engagement with and effective representation for owners;
Protection – assess democratic health, watch for vulnerabilities and pitfalls, protect the process;
Promotion – ensure transparency, educate and inform, and evolve democratic processes; and
Perpetuation – bring fresh owners into the process, orient for democratic leadership, with ongoing training in democratic leadership.
Now is a good time to ask yourself, “How is my board doing” and “How can I help?” While board elections are not until November, if you aren’t happy with your answer to the first question, and want to find out more about the second, it is not too early to start. You could attend a board meeting or two, talk to people in the Co-op, or request a candidate information packet from Shareholder Services. Just sayin’…
FOOTNOTE: For more on Art Sherwood’s work, please see: http://www.indiana.edu/~workshop/colloquia/materials/papers/sherwood_white_paper2-25-13.pdf
The Board of Directors Will be tabling on Saturday, May 17 from 2 to 4 pm in the store. Stop by and have a cup of tea!