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: Peter Betts, Richard Schramm
Staff: Terry Appleby, Eugenia Braasch, Tony White
Guests: There were no guests.

Welcome and Introductory Remarks
Donald Kreis called the meeting to order at 5:24 p.m. He read a passage from p. 311, Boards That Make a Difference, by John Carver, about excellence in the boardroom; the Board held a “check-in” comment time.

Agenda Review & Changes
Discussion of a revision to the Ends Global policy was postponed to the November meeting.
Discussion of member linkage was postponed to the November meeting.
The possibility of adding an agenda item about amending the Board budget FY 2009 was raised. The issue was whether the annual audit expense should be allocated to the Board budget or the Co-op operating budget. This topic was not included in the meeting agenda.

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 – in process)
2. Propose revisions to Co-op Ends Policies, reflecting Michael Shuman’s recommendations. (Don – October meeting; deferred to the November meeting)
3. Make arrangements for appreciation dinner for Bob Hayes, Board members, and Senior management team in January 2009. (Genie – November meeting)
4. Draft a revised B-GM5 policy. (Diane – October meeting)
5. Propose a revision to GP 4.5 policy. (Don)
6. Prepare a report on CVNC activities. (Don and Terry – October meeting)
7. Negotiate and draft a formal agreement with Dartmouth College regarding the Co-op records, which will include a Deed of Gift of Archival materials. Provide Board members with a copy of the final agreement. (Terry – in process)
8. Identify new data measures to track EL 3.7 Good Will. (Terry)
9. Outline a process for complying with policy GP 7.4. (Nominating Committee)
10. Develop a standard set of coding categories to facilitate expense tracking. (Genie, Mark Langlois)
October Monitoring Reports
EL2 Financial Condition and Performance (Terry)
EL7 Communication and Counsel to the Board (Terry)
B-GM 3 Delegation to the GM (Mike, reassigned to Diane – postponed to November)
B-GM 4 Monitoring GM Performance (Richard – postponed to November)

Co-op Stories
Co-op stories were not told this month.

Approval of September 17, 2008 Minutes
MOTION: Kay Litten moved to accept the September 17, 2008 minutes as written.
Margaret Drye seconded the motion.
VOTED: To accept the September 17, 2008 minutes as written. 7 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.

Executive Session to discuss a personnel issue
The meeting broke for Executive Session at 5:41 p.m.
The meeting resumed at 6:05 p.m.

The meeting broke for dinner at 6:05 p.m.
The meeting resumed at 6:35 p.m.

Policy Monitoring
EL 2 Financial Condition and Performance monitoring report
MOTION: Ed Howes moved to accept, with acknowledgement of non-compliance, the EL 2 monitoring report.
Kay Litten seconded the motion.
VOTED: To accept, with acknowledgement of non-compliance, the EL 2 monitoring report. 7 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.
The Board believed that the GM’s interpretation of the policy was reasonable, that there was adequate data provided to demonstrate the report’s assertions, and that an acceptable plan is in place for the future.
The GM reported non-compliance in consolidated earnings during the first two quarters for the year (48% under budget). He reported that costs associated with the closure of the Lyme Road market and fuel surcharges have significantly impacted the bottom line. On the revenue side, the employee benefit of a 20% discount on specific products has generated increased employee purchases, which in turn has positively impacted margins and sales. The GM said that while sales projections haven’t been met, the Co-op is not in financial jeopardy; but patronage refunds and staff bonuses would likely be affected. The plan is to keep staff informed about their contributions to the bottom line through open book management; it is anticipated that the financial condition will improve with the opening of the new Lyme Road market in November, coupled with holiday shopping. A Board member asked to discuss the Park Street gas/service station as part of the strategic planning for the next three to five years during the December board meeting.

EL 7 Communication and Counsel to the Board monitoring report
MOTION: Mike Yacavone moved to accept with acknowledgement of non-compliance, the EL 7 monitoring report.
Tricia Groff seconded the motion.
VOTED: To accept with acknowledgement of non-compliance, the EL 7 monitoring report.
7 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.
The Board expressed contrasting views regarding the GM’s report of non-compliance in EL7.1 and EL7.2. One member proposed revisions to EL 7 (see discussion under Policy Revisions), while another noted that the GM kept Board members well informed about Co-op operations at each monthly meeting through verbal reports.

New Policy
EL 12 Board Logistical Support
MOTION: Diane MacDonald moved to adopt the EL12 policy.
Ed Howes seconded the motion.
VOTED: To adopt the EL 12 policy.
7 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.

The policy reads:
EL12 – Board Logistical Support
The General Manager will not allow the Board to have inadequate logistical support.
Accordingly, the GM will not:
EL 12.1: Provide the Board with insufficient staff administration to support governance activities and Board communication.
EL 12.2: Allow the Board to be without a workable mechanism for official board, officer or committee communications.
EL 12.3: Allow Board Members to be without an updated copy of the Policy Register and the Bylaws.
EL 12.4: Provide inadequate information and notice to members concerning Board actions, meetings, activities and events.
This policy shall be monitored annually.

Policy Revisions
B-GM 2, B-GM 4.4, B-GM 5, Appendix 8
MOTION: Diane MacDonald moved to: Modify portions or all of B-GM2, B-GM 4.4, B-GM 5, Appendix 8.
VOTED: To modify portions or all of B-GM2, B-GM 4.4, B-GM 5, Appendix 8.
7 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.

The changes are as follows:
B-GM 2 policy: The GM is the Board’s only link to operational achievement and conduct of the cooperative, so that all authority and accountability of staff, as far as the Board is concerned, are considered the authority and accountability of the GM. The only exception is the Board Administrator, whose role is providing assistance directly to the Board as distinct from the operation of the cooperative.
Accordingly,
B-GM 2.1: The only employees who will receive instructions from the Board are the Board Administrator and is the GM.
B-GM 2.2: The Board will refrain from evaluating, either formally or informally, any staff other than the GM and the Board Administrator.

B-GM 4.4 policy delete bullet reading: The Board Administrator is responsible for keeping the Policy Governance monitoring schedule and giving people advance notice of upcoming monitoring report dates.

B-GM 5 policy delete the entire policy: The Board Administrator

Appendix 8 delete the entire: Board Administrator Job Description

EL 7 Communication and Counsel to the Board
MOTION: Mike Yacavone moved to accept, with revisions, the revised EL7 policy.
Kay Litten seconded the motion.
VOTED: To moved to accept, with revisions, the revised EL7 policy.
7 in favor, 0 opposed, 0 abstained, 2 absent.
The motion passed unanimously.

The policy revisions are as follows (existing policy listed first to be deleted, revised changes in bold type):
The GM will not fail to keep the Board informed of information relevant to the Board’s responsibilities. Accordingly,
The General Manager shall not cause or allow the Board to be uninformed or unsupported in its work.
Accordingly, the GM will not
EL 7.1 The GM shall not fail to inform the Board of relevant trends, public events of the organization, or internal and external changes which affect the previous assumptions of the Board.
EL 7.1 Submit monitoring data that is untimely, inaccurate, or hard to understand.
EL 7.1.1 The GM shall not fail to provide the Board with a written report at least every two months describing the extent to which such trends, events, and changes have occurred.
EL 7.2 The GM shall not fail to inform the Board of significant problems that require the GM’s attention with respect to members, services, staff, and the community.
EL 7.2 Fail to report, or report in an untimely manner, any actual or anticipated noncompliance with any policy of the Board.
EL 7.3 The GM shall not fail to inform the Board no later than the next meeting when a violation of Board policy is discovered.
EL 7.3 Allow the Board to be unaware of relevant trends, public events of the Cooperative, or internal and external changes that
EL 7.3.1 If the GM deems it necessary to violate Board policy, s/he shall not fail to inform the President immediately.
EL 7.3.1 affect the assumptions upon which Board policy has previously been [submitted, discussed or] adopted,
EL 7.3.2 are reasonably likely to cause the Board to consider changes to the policy register,
EL 7.3.3 concern which employees report directly to the general manager or the job responsibilities of such employees,
EL 7.3.4 arise out of contact with, or actions by, government instrumentalities or other institutions that have significant impact on the affairs of the cooperative,
EL 7.3.5 affect any current or planned capital projects, or
EL 7.3.6 involve matters that members, government authorities or the general public would reasonably expect the Board to be aware of.
EL 7.4 The GM shall not fail to provide to the Board timely, accurate, and understandable monitoring data required by Board policy.
EL 7.4 Withold his/her opinion if the GM believes the Board is not in compliance with its own policies on Governance Process and Board-Management Delegation, particularly in the case of Board conduct that is detrimental to the work relationship between the Board and the GM.
EL 7.5 Deal with the Board in a way that favors or privileges certain Board members over others except when (a) fulfilling individual requests for information or (b) responding to officers or committees duly charged by the Board.
EL 7.6 Fail to supply for the Board’s agenda all decisions delegated to the GM yet required by law, regulation, or contract to be Board-approved.
EL.7.7 Fail to supply direct evidence to the Board on a timely basis that the Cooperative is in compliance with all obligations that may trigger the personal legal liability of Board members.

This policy will be monitored annually be internal report of the GM to the Board.

The policy revisions are based on a CDS policy template. The GM noted that for many years, prior to the implementation of policy governance, he routinely provided monthly reports to the Board about the status of the Co-op operation. The Board indicated to him a few years ago that operational news was not part of their purview, so he stopped submitting regular reports for the Board packet, but was willing to resume the practice. The Board expressed a desire for the GM to provide the Board with feedback regarding the governance process, particularly if the Board is not acting in accord with its policies. A Board member noted that the GM is managing a major business and wondered if it was putting undue expectations on the GM to assess Board performance as well.

Discussion: Nominating Committee
The Nominating Committee held its second meeting on October 9th. The committee agreed to use assessment materials developed by Ann Hoyt (Univ. Wisconsin) and CDS, in order to understand what attributes are needed to create a balanced slate of candidates. They asked Board members to complete a set of surveys designed to assess the strengths and weaknesses of each board member and determine how board members work with one another. An independent evaluator from Dartmouth College has been retained to analyze and summarize the survey results while also ensuring confidentially. The process is intended to be a learning exercise, individually and collectively. It is anticipated that this feedback will also provide information about future training topics. There are four potential external candidates at this time plus incumbents. The Board President expressed the desire for more meaningful opportunities to engage with members prior to the election next spring. The Board will hold a discussion about member linkage goals and strategies at its November meeting.

Discussion: Connecticut Valley Neighboring Coops (CVNC)
Don Kreis, Kay Litten, and Terry Appleby will represent the Hanover Co-op at the next CVNC meeting on Nov. 1st. The Board agreed to read two scenarios about the New England regional economy in 2020 developed by the CVNC, to envision different potential outcomes, and anticipate strategic and policy directions. A board member expressed concern regarding the political orientation of one of the scenarios; this concern was noted, with the comment that such tension was good as it could spur involvement and participation.

Executive Session to discuss 2007-2008 GM evaluation
The meeting broke for Executive Session at 8:50 p.m.
The meeting resumed at [time] p.m.

Meeting Review
There was no meeting review discussion.

Meeting Adjournment
The meeting was adjourned at: [time] p.m.

Respectfully submitted,

Eugenia F. Braasch Peter R. Betts
Board Administrator 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 – November meeting)
3. Make arrangements for appreciation dinner for Bob Hayes, Board members, Senior management team. (Genie – November meeting)
4. Propose a revision to GP 4.5 policy. (Don)
5. Negotiate and draft a formal agreement with Dartmouth College regarding the Co-op records, which will include a Deed of Gift of Archival materials. Provide Board members with a copy of the final agreement. (Terry)
6. Identify new data measures to track EL 3.7 Good Will. (Terry)
7. Outline a process for complying with policy GP 7.4. (Nominating Committee)
8. Develop a standard set of coding categories to facilitate expense tracking. (Genie, Mark Langlois – FY 2009)
9. Complete surveys re. Board member skills. (Nominating Committee – November meeting)
10. Discuss and plan member linkage efforts. (GP 2.1 Board Deliverables) (Board – November meeting)
11. Discuss Co-op Service Station as part of 3-5 yr. Strategic plan. (Board – December meeting)

November Monitoring Reports
EL 7 Communication and Counsel to the Board (Terry)
EL 8 Access to Products (Terry)
EL 10 Appropriate Architecture and Design (Terry)
B-GM 3 Delegation to the GM (Diane)
B-GM 4 Monitoring GM Performance (Richard)
GP 5 President’s Role (Don)