The Co-op Food Stores

Present: Don Kreis (Chair), Peter Betts, Margaret Drye, Ed Howes, Kay Litten, Diane MacDonald, Richard Schramm, Mike Yacavone
Absent: Ann MacDonald
Staff: Terry Appleby, Eugenia Braasch
Guests: Mark Goehring, Cory Martin

Welcome and Introductory Remarks

Don Kreis called the meeting to order at 5:34 p.m. and introduced the guest, Cory Martin.

Agenda Review & Changes

There were no changes to the agenda.

Prior Month Action Items Review

• Distribute an article about B-GM monitoring to the Board. (Mark Goehring – completed)
• Attend the CVNC meeting on 1.26.08. (Terry, Don, and Mike)
• Distribute Michael Shuman’s book Small-Mart Revolution to all Board members. (Genie – completed)
• Read M. Shuman’s book, Small-Mart Revolution. (All Board Members)
• Invite M. Shuman to speak at the Co-op’s Annual Meeting in April. (Richard, Mike, Don – completed)
• Write articles about the local economy topic for the Co-op News. (Terry and Don – completed)
• The proposed by-laws changes will be publicized through the Co-op News March issue. (Genie)
• The proposed by-laws changes will be put to vote at the Annual Meeting. (Don)
• Clarify the specific expectations for services from CBLD and sign the CBLD agreement. (Don)
• B-GM-Global – Board-GM Flow of Authority. (Diane – completed)
• EL 7 Communication and Counsel to the Board; by acceptance of the GM’s report. (Terry)
• By-laws committee, Article V, sections 2a and 4. Discussion to be continued via conference call. (Margaret, Diane, Peter, Mike, Genie, Mark – completed)

Co-op Stories

The following people shared stories about Co-op-related experiences:
Richard Schramm, Peter Betts, Mike Yacavone, Don Kreis, Kay Litten

Approval of December 19, 2007 Minutes

MOTION: Ed Howes moved to accept the December 19, 2007 minutes as written.
Mike Yacavone seconded the motion.

VOTED: To accept the December 19, 2007 minutes as written: 8 in favor, 0 opposed, 0 abstained, 1 absent.

The motion passed unanimously.

The Board discussed the lack of personal attributions in the December minutes. Despite this content and stylistic change, the December minutes accurately described the agenda topics, the range of discussion, and documented deliberation and care on the part of the Board. The CDS also recommends this approach. The Board approved the new minutes format.

Annual Audit Update

The Executive Committee and Board Administrator held a pre-engagement meeting with the Co-op auditors to see if the Co-op Governing body had any particular concerns. The Co-op’s financial status is sound, so there was not a lengthy discussion. In 2007, the Board review of the GM’s interpretations of the financial policies was a positive step. One important aspect of the audit task is to ensure that the Board’s fiscal oversight via policies is adequate, rather than review of specific budget materials. The auditors have now embarked on the audit, which is due to be completed in February 2008.

Policy Monitoring

Approval of B-GM Global Monitoring

MOTION: Peter Betts moved to accept the report written by Diane MacDonald as in compliance with B-GM Global.

Margaret Drye seconded the motion.

VOTED: To accept the report as in compliance with B-GM Global: 8 in favor, 0 opposed, 0 abstained, 1 absent.

The motion passed unanimously.

Initially, when the Co-op Board adopted the Policy Governance approach, this policy was crafted to express a clear delineation between policy and operational responsibilities and accountabilities. The Board recognized that this is now a top-level policy, intended to serve as a summary of affirmations expressed in sub-level policies. The question was raised regarding whether the sub-level policies are comprehensive, whether there is anything left unsaid, in order to satisfy this top-level policy. Nobody raised a concern about any omissions. Monitoring the sub-level policies is important, in that the Board can assess the GM’s interpretation, review data, and ascertain whether expectations have been met. If each of the incremental sub-level policy monitoring reviews are completed and accepted as in compliance, then the Global monitoring should express the composite of those outcomes.

The meeting broke for dinner at 6:01p.m.

The meeting resumed at 6:40 p.m.

Project Update

Co-op Community Market on Lyme Road
Planning is proceeding for the new market facility. The next steps are: a Town of Hanover Planning Board hearing (anticipate approval of the project), obtaining a guaranteed maximum price, putting the plans out for bid to general contractors, and bringing a financial proposal for the project before the Board at its March meeting. A recent “pre-meeting” with key members of the Planning Board staff resulted in positive comments and commendations for the ways in which this project design fits within the Town of Hanover Master Plan. The transition from the “gas station/convenience food stop facility” to “residential small scale ‘green’ market without fuel pumps” is anticipated to generate some negative response from the Co-op members who currently depend on this gasoline source. But those consumers will need to find a different fuel supplier when the facility undergoes its transformation, and it is unpredictable whether they would return to the renovated market even if it did offer fuel sales. The expanded product mix at the market is being planned to serve the needs of the local residents in this growing sector of Hanover.

The Board explored the topic of financing Co-op projects and a potential policy requirement of applying for Co-op Bank funds. After considering whether a policy was needed to guide the GM regarding borrowing practices, it was agreed that such a policy is currently in place with regard to financial goals, and since the GM already considers these criteria, it is appropriate for the GM to develop the project’s financing package without further input from the Board.

Bylaws
Continuing its on-going efforts, the Board reviewed the proposed text for the Co-op News, which outlines the following recommendations for by-laws changes:

Article VII Section 3 Responsibilities of Directors and Disqualification of Directors.
Article IV Section 1 Fiscal Period.
Article V Section 2a Division of Net Savings.
Article V Section 4 Manner of Distribution of Patronage Refunds.
Article VIII Section 6 Nominating Committee.

There were no comments made in regard to Article VII Section 3.

The Board decided to repeal the proposed amended bylaws from its December 19, 2007 meeting and further amended the bylaws per the advice of legal counsel: Article IV Section 1 Fiscal Period and Article VIII Section 6 Nominating Committee.

MOTION: Richard Schramm moved to accept Article IV Section 1 as amended.

Mike Yacavone seconded the motion.

VOTED: To accept the proposed amended bylaw, Article IV Section l: 8 in favor, 0 opposed, 0 abstained, 1 absent.

The motion passed unanimously.

MOTION: Margaret Drye moved to accept Article VIII Section 6 as amended.

Mike Yacavone seconded the motion.

VOTED: To accept the proposed amended bylaw, Article VIII Section 6: 7 in favor, 1 opposed, 0 abstained, 1 absent.

The motion passed.

The Board decided not to propose amendments to Article V Sections 2a and 4, following a lengthy discussion about the legal counsel pertaining to these potential amendments and the need for additional review and input from the Co-op’s accounting firm regarding the tax consequences to the members. As a result of their decisions, the Board agreed to move ahead with presenting the following text in the Co-op News which describes the proposed amendments for the membership to consider in advance of the April 27, 1008 Annual Meeting:

Amendments Proposed for Co-op Bylaws!

The Co-op’s Board of Directors is proposing three amendments to our Bylaws for member approval. Members will vote on each amendment individually.

On the following pages, you will find the text of the proposed amendments preceded by the rationale for each change. The rationale for each change is given in italics. Proposed deletions are indicated by items with a line through them (deletions); proposed additions are underlined (additions). Only the sections of the Bylaws text relevant to the proposed revisions are included here.

Co-op members will vote, by ballot, on these proposed changes to the Bylaws during the thirty-day voting period commencing on April X, 2008. Ballots will be mailed to all members in the Annual Report and will also be available in the food stores for pick-up. See page x for more details on the voting procedure.

1. The proposed change provides a practical, whole number solution for a nine-person Board.

ARTICLE VII Board of Directors

SECTION 3. Responsibilities of the Directors and Disqualification of Directors.
If, in the opinion of a majority of the full Board, there is a reasonable demonstration that any Director is not properly discharging his or her responsibilities to the Society, that Director may be removed by a vote of three-quarters two-thirds of the full Board.

2. The Hanover Co-op operates on a calendar year, the common practice in the industry. This proposed change would allow flexibility for a different fiscal year, but doesn’t compel it.

Article IV Capital

Section 1. Fiscal Period.

The business period of the Society shall be a 52 or 53 week fiscal year with the starting date determined by the Board of Directors. beginning at the end of the prior fiscal year, and ending at midnight on the Saturday nearest December 31st.

3. The Nominating Committee is the only standing committee of the Board. Thus, if additional committees are created, the Board determines the purpose of the committee and designates the chair, who shall select the additional members of such committees, subject to the approval of the Board of Directors. This change complies with the associated committee statement described in Article VII Section 5 # 9, Board of Directors Duties.

Article VIII Duties of Officers, Committees and General Manager

Section 6. Nominating Committee.

The Nominating Committee Board shall also provide the various other committees Chairs of the Society with the names of members who may be qualified to serve on their committees.

By-laws Committee Action Items:

After the annual audit, ask Tyler Simms to review proposed amendments to Article V Sections 2a and 4.

Contract with a legal firm to conduct a comprehensive review of the bylaws.

Nominating Committee Candidate Status
The slate of candidates is not finalized yet. Four or five people have expressed interest in running for the three open positions on the Board. The nominating committee has articulated its criteria for Board endorsement on the slate to these people. In particular, the committee wants to be sure that candidates understand the nature of policy governance, as it is a different sort of task than many people experience with typical Board service and utilizes different skills, and also the expectation for serving a full three-year term. The issue of the small candidate pool was discussed. It was also noted that, since the Co-op News is produced and mailed bi-monthly, its deadline for announcing the candidate slate falls well in advance of the actual election. This publication process seems to be driving the nominating process in a way that doesn’t promote member action. The committee is considering a special membership mailing dedicated to the task of the nominating process — writing a letter in order to highlight the opportunity for service, describing the desired skill sets, in order to possibly recruit a larger pool of candidates in the future.

Nominating Committee Action Items: Complete the slate by the February meeting.

February 22, 2008: Deadline for Candidate statements and photographs to the Co-op News Editor.

King Award
After the announcement of the King Award in the Winter 2008 Co-op News, only a few proposals have been received. Board members were encouraged to publicize this award and possibly submit proposals themselves. The Board talked about how to evaluate the various nominees and the possibility of establishing some criteria for making this award, for example, balancing the professional activities of the people over a period of time (i.e., one year, a farmer, another year, a teacher, another year, a business person, etc.), and/or featuring a person whose works exemplify Board goals. No specifics were decided on. The recipient will be selected at the March meeting.

Annual Meeting: April 27, 2008
Expectations/Outcomes: One goal is to attract a broader mix and a larger group of Co-op members to this meeting than have attended in recent years. Another goal is to inform the membership about the Board’s self-education topic about the role of the Co-op in the local economy. Co-op members will attend an evening program consisting of lecture presentations and have opportunities for questions and answers. They will become informed about (1) the status of the Co-op organization, and (2) “How Local Businesses are beating the Global Competition” and (3) “How the Co-op could advance the sort of transformation that author Michael Shuman describes in his book The Small-mart Revolution”.

Co-op Business Meeting Agenda: to be determined. An election will be held where members will be asked to vote for three Board directors, either from a slate of candidates presented by the Board or possibly from petition candidates.

Program Theme: How Local Businesses are beating the Global Competition

Speaker: Michael H. Shuman, author of The Small-mart Revolution.

Proposed programs:

Sunday, April 27th: Co-op Annual Meeting for members with dessert & drinks offered via the Co-op commissary.

Monday, April 28th: Breakfast Roundtable Discussion for Upper Valley leaders from the business, non-profit, and regional/community planning sectors with Shuman as keynote speaker.

Monday, April 28th: possible Shuman lecture with Q & A at Dartmouth College for undergraduates.

Event Locations: to be decided. The Hanover High School facilities are being considered.

ther venues in Hanover and Norwich are also under consideration.

Partner Organizations: to be decided.

The Annual Meeting planning is underway with coordination and leadership from two Board committees: the Annual Meeting group (logistics) and the Local Economy task force (program). Michael Shuman has agreed to speak; the details of his actual program participation are under negotiation. As outlined above, the Board is seeking to draw a larger sector of the membership this year through a presentation by a nationally recognized speaker and through expanded programmatic offerings. The goals to increase and generate broader-based attendance at the Annual Meeting and educate the Co-op membership about Shuman’s ideas were enthusiastically supported by the Board and GM. But there were significant differences of opinion about how to proceed with the planning and execution of the proposed events. The GM noted that the Annual Meeting is a regular event, so the budget, publicity, and staffing are parts of the existing operational cycle. The additional program expectations present unanticipated costs and staffing requirements to an organization whose staff is already operating at capacity, with a major building project underway. The GM asked the Board to clearly articulate, via policy, their expectations for the transition from Board study and discussion about the Local Economy topic to operational parameters.

Annual Meeting Action Items:

February 15th: Annual Report Deadline.
Continue to plan the programs: Annual Meeting, Business Breakfast Roundtable
Complete negotiation with Michael Shuman regarding his speaking engagement(s).
Decide whether to partner with other Upper Valley organizations.
Proceed to explore and reserve the locations for the meetings.
The GM will meet with the appropriate staff regarding the expanded programmatic tasks and will explore realignment of priorities.
Identify and generate the invitation list(s).
Contact the Co-op commissary to order the dessert and beverage menu.
Organize the publicity.

Board Action Items (tasks still pending from the prior month’s list are also included here)
· Attend the CVNC meeting on 1.26.08. (Terry, Don, and Mike)
· Read M. Shuman’s book, Small-Mart Revolution. (All Board Members)
· The proposed by-laws changes will be publicized through the Co-op News March issue. (Genie, Rosemary)
· The proposed by-laws changes will be put to vote at the Annual Meeting. (Don)
· Clarify the specific expectations for services from CBLD and sign the CBLD agreement. (Don)
· Add to the task list on the Member Services/Board Calendar: Check whether a second regular meeting has taken place during the year and if not, formally cancel such a meeting at the December Board meeting. (Genie)
· EL 2 Financial Condition and Performance: quarterly GM report to the Board. (Terry)
· EL 7 Communication and Counsel to the Board: by acceptance of the GM’s report. (Terry)
· After the audit is completed, ask Tyler Simms to review the proposed by-laws changes (Article V Sections 2a and 4) that were discussed, but not brought before the membership this year. The Co-op Board is seeking advice about the tax implications of the potential changes to the membership. (Margaret, Don)
· Contract with a legal firm to conduct a comprehensive review of the by-laws. (Margaret, Don)
· Complete the nominating slate to present for Board consideration at the February 20, 2008 meeting. (Richard)
· February 22, 2008: Submit Candidate statements and photographs to the Co-op News Editor. (Genie)
· Proceed with the Annual Meeting planning. (Kay, Diane, Margaret)
· Proceed with the Business Roundtable breakfast planning. (Don, Mike, Richard)
· February 15th: Annual Report Deadline. (Terry, Don)
· Complete negotiation with Michael Shuman regarding his speaking engagement(s). (Don)
· Decide whether to partner with other Upper Valley organizations for the Shuman visit. (Don, Mike, Richard)
· Proceed to explore and reserve the locations for the Annual Meetings (Genie)
· Meet with the appropriate staff regarding the expanded programmatic tasks for Annual Meeting and explore realignment of priorities. (Terry, Rosemary, Allan, Genie)
· Identify and generate the invitation list(s) for the Business Breakfast Roundtable. (Richard)
· Contact the Co-op commissary to plan & order the Annual Meeting desert and beverage menu. (Rosemary, Genie)
· Provide the Annual Meeting publicity. (Allan)

The meeting was adjourned at 9:35 p.m.

Respectfully submitted,

Eugenia F. Braasch Peter R. Betts
Board Administrator Secretary