December 2008
Present: Margaret Drye, Ed Howes, Donald Kreis, Kay Litten, Richard Schramm, Mike Yacavone
Absent: Tricia Groff, Diane MacDonald
Staff: Terry Appleby, Eugenia Braasch, Rosemary Fifield, Tony White
Guests: Erbin Crowell (Cooperative Fund of New England), Mark Goehring (CDS consultant),
Ned Dwyer, Walter Noll, Janet St. Germaine (Hanover Co-op members)
Welcome and Introductory Remarks
Donald Kreis called the meeting to order at 5:31 p.m. Introductions were made around the table.
Agenda Review & Changes
The following agenda changes were made: (1) consideration of a resolution prior to review of the minutes,
and (2) the EL 1 monitoring report discussion and the Nominating Committee presentation were switched.
Prior Month Action Items Review
1. Propose a process for addressing Hanover Co-op capitalization planning next steps. Write a point-counterpoint article about “Members Capitalizing the Co-op” for the Co-op News. (Don, Terry)
2. Propose revisions to Co-op Ends Policies, reflecting Michael Shuman’s recommendations. (Don)
3. Make arrangements for appreciation dinner for Bob Hayes, Board members, Senior management team. (Genie)
4. Propose a revision to GP 4.5 policy. (Don)
5. Identify new data measures to track EL 3.7 Good Will. (Terry)
6. Outline a process for complying with policy GP 7.4. (Nominating Committee)
7. Develop a standard set of coding categories to facilitate Board Budget expense tracking. (Genie, Mark Langlois – FY 2009)
8. Complete surveys re. Board member skills. (Nominating Committee)
9. Discuss and plan member linkage efforts. (GP 2.1 Board Deliverables) (Board)
10. Discuss Co-op Service Station as part of 3-5 yr. Strategic plan. (Board)
11. Write an article about Peter Betts in Jan./Feb. Co-op News. (Margaret Drye)
12. Invite Bruce Follett to a Board meeting. (Genie)
13. Identify and solicit candidates for the Board vacancy. (Nominating Committee)
14. Proceed with the 2009 CBLD Participation agreement. (Don)
15. Invite Erbin Crowell to a future Board meeting. (Don)
December Monitoring Reports
EL 1 Planning (Terry)
EL 7 Communication and Counsel to the Board (Terry)
GP 9 Working with Neighboring Co-ops (Don)
Co-op Stories
Kay, Mike, and Don all reported that they have had substantive discussions with Lynn Foster Johnson, a statistician at Dartmouth College who has provided consulting services to the Board for their Peer Review process.
Margaret and Diane have been coping without electricity for almost a week in the aftermath of a recent severe regional storm.
Approval of Resolution
MOTION: Michael Yacavone moved to adopt the resolution as written.
Kay Litten seconded the motion.
VOTED: To accept the resolution as written.
5 in favor, 0 opposed, 1 abstained, 2 absent.
The motion passed.
The Co-op’s accounting firm, Tyler, Simms and St. Sauveur, P.C., prepared the resolution, which pertains to a restatement of the prototype retirement plan. The Co-op Board was advised to approve the resolution verbatim.
Approval of November 19, 2008 Minutes
MOTION: Ed Howes moved to accept the November 19, 2008 minutes as written.
Richard Schramm seconded the motion.
VOTED: To accept the November 19, 2008 minutes as written.
5 in favor, 0 opposed, 1 abstained, 2 absent.
The motion passed.
Policy Monitoring
GP 9 Working with Neighboring Co-ops monitoring report
MOTION: Michael Yacavone moved to accept the GP 9 monitoring report.
Kay Litten seconded the motion.
VOTED: To accept the GP 9 monitoring report.
6 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.
Don Kreis noted that Board members and General Managers participate in this effort, with greater involvement on the part of the GMs. Terry Appleby attended the Neighboring Food Co-op Association meeting in northern Vermont last week.
EL 7 Communication and Counsel to the Board
The Board discussed the negative sales trend during the month of November. Customers are becoming more discerning about their purchases and this change in buying pattern is expected to last for at least the next few months. Category management is used to adjust the product promotions, in order to serve Co-op member needs.
The opening of the Lyme Road market in early December was celebrated and characterized as a “home run”. The building “looks superb” and there is an extensive product line offered in this smaller scale store. Community feeling is positive; many customers and Co-op staff have commented that they are really glad to see each other again.
The meeting broke for dinner at 6:25 p.m.
The meeting resumed at 7:00 p.m.
Discussion: Cooperation in Italy
Erbin Crowell, (Cooperative Fund of New England), presented an informative overview of the cooperative movement and his recent trip to the Emilia-Romagna region of Italy, where there are more cooperatives per capita than anywhere else in the world.
Crowell outlined the key success factors as:
clear co-op identity, effective co-op organizations, strong government support and legislative engagement (with laws supporting cooperatives), co-op investment fueling further co-op development, support for innovation through
‘co-opreneurship’, as well as high level policy focus on the co-operative economy.
There are very few large conventional corporations in this part of Italy; cooperatives and small/medium-sized businesses predominate. This orientation toward smaller enterprises seems to be culturally embedded. There is also a high level of worker solidarity, with coordinated hiring practices between co-ops in the event of layoffs. It is in the co-op’s interest for the majority of workers to be co-op members. The social divide between the wealthy and poor in the Emilia-Romagna region of Italy is the smallest in Europe.
Following the talk, the Board reflected on opportunities for expanded cooperation in the Upper Valley region, the “local first” efforts, and the neighboring food cooperative association. There was consensus that it is important to nurture these within-sector and cross-sector efforts. Crowell recommended that the Hanover Co-op continue to promote the cooperative difference and document the positive economic impacts of cooperative ventures.
Policy Monitoring
EL 1 Planning monitoring report
MOTION: Richard Schramm moved to accept the EL 1 monitoring report.
Margaret Drye seconded the motion.
VOTED: To accept the EL 1 monitoring report.
6 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.
The Board characterized the EL 1 monitoring report, the associated Strategic Plan, 2009 Business Plan, and Budget as a rich set of planning documents. They further asserted that such high-quality reports demonstrate the GM’s thorough knowledge of the business.
Discussion centered on the rapidly changing global economic crisis and the ability to make credible projections, given the current economic instability. The GM acknowledged that the economic conditions of the past 3-4 months are unprecedented, yet maintained that despite these uncertainties, practices are in place at the Co-op that guide decision-making. Managers use analytical tools on a daily basis that help them to understand buying patterns, assess the business, and make adjustments. In addition, the management team regularly holds preparedness discussions. The GM reported that the customer count is very stable and steady, yet buying patterns are in flux and the product mix is shifting. He said that while it is impossible to predict the year-end margins, he anticipates that business will drop off, particularly in January.
A board member observed that it also seems that while the actual financial status for many Co-op members may not have significantly shifted at this time, their feeling of security seems to have dramatically changed. The GM agreed, saying that customers are resisting impulse purchases. Thus, grocery food margins are not projected to increase in the coming year. Staple items, such as bread and milk, are being closely monitored. Bulk foods are the strongest growth area. Gasoline margins are also expected to rise during 2009.
A recommendation was made to create a policy that addresses contingency planning (in the event of employment declines and layoffs in the Upper Valley). The management team has discussed the possibility of a dramatic, 25% drop in overall sales. The open-book approach is designed to assist managers with these challenges. The workplace culture is also a critical ingredient, stressing the importance of each employee’s contribution to the Co-op’s success. While the depth of the challenge is large, the Board expressed confidence in the GM and Co-op employees, and encouraged the GM to continue to provide regular updates.
Succession planning was raised as an additional area of future concern, in anticipation of Terry’s eventual retirement. The Board raised the possibility of entering into an employment contract with the GM, as well as identifying the leadership qualities that it seeks in a future GM.
Nominating Committee
The Nominating Committee thanked the Board for participating in the self-monitoring and peer review survey process. Individual survey results were mailed confidentially to each Board member on December 17th. Mike Yacavone made a presentation, explaining how to interpret the results, and distributed two handouts at the meeting. The goals are to understand how individuals contribute to overall Board effectiveness and identify potential areas for future Board training and development. Additionally, it is anticipated that this effort will help with the development of a slate of candidates for the 2009 election. The expectation is that over time, this sort of data collection and analysis will become an integral part of building and maintaining an effective Board.
Meeting Review
A Board member commented that when agenda changes are under consideration, an assessment should be made about the implications for other topic priorities, discussion length and depth.
The guest presentation was characterized as educational and thought-provoking. The topic could help to inform long-range planning and might possibly be an appropriate annual meeting theme.
The Board appreciated the strong, forward-looking reports presented by the GM.
Meeting Adjournment
The meeting was adjourned at 9:25 p.m.
Respectfully submitted,
Eugenia F. Braasch Kay G. Litten
Board Administrator Board Secretary
Action Items:
1. Propose a process for addressing Hanover Co-op capitalization planning next steps. Write a point-counterpoint article about “Members Capitalizing the Co-op” for the Co-op News. (Don, Terry)
2. Propose revisions to Co-op Ends Policies, reflecting Michael Shuman’s recommendations. (Don – January)
3. Make arrangements for appreciation dinner for Bob Hayes, Board members, Senior management team. (Genie – spring)
4. Propose a revision to GP 4.5 policy. (Don)
5. Identify new data measures to track EL 3.7 Good Will. (Terry)
6. Outline a process for complying with policy GP 7.4. (Nominating Committee)
7. Discuss and plan member linkage efforts. (GP 2.1 Board Deliverables) (Board)
8. Discuss Co-op Service Station as part of 3-5 yr. Strategic plan. (Board)
9. Identify and solicit candidates for the Board vacancy. (Nominating Committee)
10. Shift the Ends Global monitoring report to March on the policy monitoring calendar.
January Monitoring Reports
EL7 Communication and Counsel to the Board (Terry)
B-GM Global (Ed)
