The Co-op Food Stores of New Hampshire and Vermont

Present: Margaret Drye, Tricia Groff, Ed Howes, Donald Kreis, Kay Litten, Diane MacDonald, Mike Yacavone
Absent: Richard Schramm
Staff: Terry Appleby, Eugenia Braasch, Rosemary Fifield, Roy Raven, Tony White
Guests: Mark Goehring (CDS), Phyllis Fox (HCCS member)

Welcome and Introductory Remarks
Donald Kreis called the meeting to order at 5:34 p.m. Introductions were made around the table.

Agenda Review & Changes
The agenda was rearranged to add an opportunity for Ms. Fox to speak to the Board at the beginning of the meeting.
A memo from the Co-op CFO regarding FY 2009 forecasts was distributed along with a year to date Board expense report.

Co-op Stories
Don Kreis recently received an anonymous letter from a Co-op employee. He has spoken with Terry Appleby about the correspondence and will forward the letter to the rest of the Board.

Co-op Member Concern
Phyllis Fox, Co-op member since 1982 and owner of Fox Hollow Farm (a mustard company), spoke about her desire to resolve issues regarding her participation in food demos in the Co-op stores. Board members thanked her for coming to the meeting, yet informed her that it is Co-op policy to avoid becoming involved at the operational level. She was assured that her concerns would be best addressed by talking with Co-op staff. Terry Appleby and Tony White offered to meet with her.

Approval of February 18, 2008 Minutes
MOTION: Kay Litten moved to accept the February 18, 2008 minutes as written.
Ed Howes seconded the motion.
VOTED: To accept the February 18, 2008 minutes as written.
7 in favor, 0 opposed, 0 abstained, 1 absent.
The motion passed.

Approval of February 24, 2008 Minutes
MOTION: Kay Litten moved to accept the February 24, 2008 minutes as written.
Ed Howes seconded the motion.
VOTED: To accept the February 24, 2008 minutes as written.
7 in favor, 0 opposed, 0 abstained, 1 absent.
The motion passed.

Prior Month Action Items Review
1. Propose a process for addressing Hanover Co-op capitalization planning next steps. (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. 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. Discuss the proposal for changing the fiscal year (April meeting).

Discussion: Patronage Refund Letter
Co-op President Don Kreis received feedback on his draft patronage refund letter. The consensus was to incorporate suggested changes and proceed with distribution of the letter.

The meeting broke for dinner at 6:10 p.m.
The meeting resumed at 6:50 p.m.

Policy Monitoring
Ends Global Monitoring Report
MOTION: Ed Howes moved to accept the Ends Global monitoring report. Tricia Groff seconded the motion.
VOTED: To accept the Ends Global monitoring report.
7 in favor, 0 opposed, 0 abstained, 1 absent.
The motion passed.

The Board was impressed with the progress made towards implementing the Co-op’s Global Ends during 2008. There was a brief discussion about the scope of benefits extended to the Co-op community through operational practices; it isn’t possible at this time to quantify the cost/benefits of these myriad decisions. It was noted that efforts to support the local economy were reflected in higher levels of sales for locally grown food during 2008. The Board also talked about the ongoing HCCS involvement and leadership in the development of the Neighboring Food Cooperative Association. This activity is building closer relationships in the region with other food co-ops, to each organization’s mutual benefit.

The GM’s interpretation of ‘the greater good’ was explored. While no one questioned the reasonableness of the interpretation, a variety of opinions were expressed about the examples that the GM used in the monitoring report to illustrate his interpretation. CDS consultant Mark Goehring commented that the seven sub-policies itemized as elements of the overall Ends policy serve to elucidate ‘greater good’. The monitoring report depicted both the overall organizational culture of the Co-op, and, through the summaries of sub-policy activities, provides specific evidence about outcomes. It continues to be challenging to measure change for this policy; the GM said that a goal is to transition from using anecdotal evidence, based on activities, towards identifying quantifiable metrics for the Global Ends.

The monitoring report appendix submitted by sustainability coordinator, Emily Neuman, received high praise. A brief discussion ensued about the Co-op energy audit / consumption and incentives to decrease the need to provide shopping bags to customers.
The President of the Co-op said that, given the Co-op’s policy governance model, acceptance of this monitoring report by the Board indicates a positive assessment of GM performance.

Discussion: Policy Development B-GM 6 Annual Audit
The Co-op CFO briefed the Board regarding the circumstances that contributed to the delay in the audit preparation this year. He pointed out that four highly unusual factors created a situation that has never occurred during his tenure at the Co-op: (1) a leap year, (2) staff who were not in the office due to illness, (3) the new Co-op Community Market construction project, and (4) retaining an independent expert who consulted on that project’s accounting. He recommended that (1) the audit engagement letter be signed earlier, in October, well in advance of beginning the audit, and (2) communication be structured into the engagement letter to take place at specific intervals between the Co-op staff, Board, and auditors, to assess progress and possibly revise expectations regarding the audit schedule.
The Board briefly discussed the topic of how frequently to issue an RFP for audit services, in order to ensure that the Co-op reviews its audit options on a regular schedule. A three to five year time frame was mentioned as a best practice. Considerations regarding whether to use a local firm, knowledgeable in NH tax code, versus a firm known nationally for its work with cooperatives, were offered as possible elements of an RFP.
The decision was made to draft an audit committee charter, similar in scope to the nominating committee description. The CDS consultant will assist with this activity.

Allen and Nan King Award
Dr. William E. Boyle Jr. was selected as the recipient of the Allen and Nan King Award for 2008. Dr. Boyle is a pediatrician at the Dartmouth Hitchcock Medical Center and professor at Dartmouth Medical School, who also served as the Town of Hanover’s health officer and a board member of Hanover’s water works. He will receive the award at the Co-op Annual Meeting on April 4, 2009.

Discussion: Annual Meeting
Preparations for the annual meeting and the associated Co-op Expo are proceeding on track. The business meeting will begin at 10:30 a.m. The agenda includes: welcome remarks by President Don Kreis, a vote whether to accept the Annual Meeting minutes 2008, presentation of the Allen and Nan King Award to Dr. Boyle, introduction of Board Candidates, and a member open forum.

Discussion: Board Compensation
The Board talked about whether to raise the issue of board compensation with members at the 2009 Annual Meeting. The decision was made not to do so, given the current economic downturn, and the sacrifices that Co-op employees are being asked to make. The CDS is preparing a field guide on the topic of board compensation that will be available in May, and the sense was to become informed about best practices at other Co-ops and seek member input about this topic during the next year.

Discussion: Nominating Committee
The Nominating Committee chair distributed a list of questions, that might be posed to Board candidates during the upcoming Community Access TV interviews, to Board members for their review and comment. The final list will be distributed to the candidates on March 20th, filming will take place during the week of March 23rd, and the resulting program will be aired during the April voting period.

Discussion: Board Retreat
The Board tentatively scheduled the date of their retreat for Saturday, September 26, 2009. This date will be confirmed at the first meeting of the 74th Board of Directors in May.

Meeting Review
The meeting schedule was adhered to; planning for future meetings was emphasized.

Meeting Adjournment
MOTION: Kay Litten moved to adjourn the meeting at 9:30 p.m. Michael Yacavone seconded the motion.
VOTED: To adjourn the meeting.
7 in favor, 0 opposed, 0 abstained, 1 absent.
The motion passed.

Respectfully submitted,

Eugenia F. Braasch Kay G. Litten
Board Administrator Secretary

Action Items:
1. Propose a process for addressing Hanover Co-op capitalization planning next steps. (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, 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. Discuss the proposal for changing the fiscal year at the April meeting, with management response. (Terry)
10. Develop an audit committee charter. (Kay, Diane, Margaret, Mark Goehring)

April Monitoring Reports
EL 2 Financial Condition and Performance (Terry)
GP 2 Board Deliverables (Margaret, Kay, Diane)
GP 3 Governance Development (Diane)

May Monitoring Reports
GP Global – Governance Process Commitment
GP 1 – Governing Style
GP 7 Monitoring Board Performance (Kay)