The Co-op Food Stores

MINUTES

May 21, 2008

Present: Donald Kreis (Chair), Peter Betts, Margaret Drye, Tricia Groff, Ed Howes, Kay Litten,
Diane MacDonald, Mike Yacavone

Absent: Richard Schramm (attendance via telephone conference call for the officer election process only)

Staff: Terry Appleby, Eugenia Braasch, Rosemary Fifield, Tony White

Guests: Mark Goehring (CDS consultant), Janet St. Germain (HCCS member), Rose Marie Klee (Wheatsville
Co-op, Austin, Texas)

Welcome and Introductory Remarks

Don Kreis called the meeting to order at 5:33 p.m.

Agenda Review & Changes

The decision was made to postpone the Board Budget Process discussion to the June meeting.

Prior Month Action Items Review

1. Write a point-counterpoint article about “Members Capitalizing the Co-op” for the Co-op News. (Richard,
Mike, Rosemary- in process)
2. Plan a Board retreat to take place on August 23, 2008. Draft a proposal for the retreat topic. Reserve the DOC
House. (Don, Mark, Genie – completed)
3. Approve the proposal for HCCF recipients. (Bob Hayes and HCCF committee members – completed)
4. The proposed by-laws changes will be put to vote at the Annual Meeting. (Don – completed)
5. 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 – pending)
6. Contract with a legal firm to conduct a comprehensive review of the by-laws. (Margaret, Don – pending)
7. Proceed with the Annual Meeting planning. (Kay, Diane, Margaret, Rosemary, Genie, Allan – completed)
8. Proceed with the Business Roundtable breakfast planning. (Richard, Genie, Allan – completed)
9. Consider the issue of minutes transparency and style and make a recommendation. (Peter, Richard – to do)
10. Complete the King Award process: certificates, gifts, donations to non-profits. (Genie – completed)
11. Propose a process for addressing Hanover Co-op capitalization planning next steps. (Don, Terry, Genie – to do)
12. Distribute the Ends Global Monitoring report to the membership and general public. (Terry, Genie, Allan,
Rosemary – completed)
13. Propose amendments to GP 2. (Kay and Margaret – June meeting)
14. Propose a process for board budget preparation. (Richard and Diane – June meeting)
15. Prepare new board member orientation materials and identify mentors. (Genie – completed)
16. Distribute CDS 2008 webinar program details (Genie – completed)
17. Complete the Board election process. (Rosemary, board members – completed)


18. Prepare GP Global and GP 1 monitoring reports. (Margaret and Diane – completed)
19. Prepare EL 2 monitoring report. (Terry – completed)
20. Prepare EL 7 monitoring report. (Terry – not completed)

Co-op Stories

Ed Howes described a recent article in the Co-op Business Journal about the grassroots effort to change the member
/ board composition and prevent Ace Hardware cooperative from de-mutualizing.

Approval of April 16, 2008 Minutes

MOTION: Ed Howes moved to accept the April 16, 2008 minutes.
Peter Betts seconded the motion.

VOTED: To accept the April 16, 2008 minutes: 8 in favor, 0 opposed, 1 abstained, 0 absent.
The motion passed.

Election of Board Officers

The Board elected the following people to serve as officers during the upcoming year.

MOTION: Michael Yacavone moved to elect Donald Kreis as President of the Board of Directors.

Peter Betts seconded the motion.

VOTED: To elect Donald Kreis as President of the Board of Directors.

9 in favor, 0 opposed, 0 abstained, 0 absent. The motion passed unanimously.

MOTION: Diane MacDonald moved to elect Margaret Drye as Vice President of the Board of Directors.

Kay Litten seconded the motion.

VOTED: To elect Margaret Drye as Vice President of the Board of Directors.

9 in favor, 0 opposed, 0 abstained, 0 absent. The motion passed unanimously.

MOTION: Kay Litten moved to elect Richard Schramm as Treasurer of the Board of Directors.

Margaret Drye seconded the motion.

VOTED: To elect Ricahrd Schramm as Treasurer of the Board of Directors.

9 in favor, 0 opposed, 0 abstained, 0 absent. The motion passed unanimously.

MOTION: Ed Howes moved to elect Peter Betts as Secretary of the Board of Directors.

Margaret Drye seconded the motion.

VOTED: To elect Peter Betts as Secretary of the Board of Directors.

9 in favor, 0 opposed, 0 abstained, 0 absent. The motion passed unanimously.

Expectations about Board leadership and Board process were discussed. Concerns were expressed primarily with
regard to the Board ‘speaking with one voice’ and member linkage. Currently, the operating definition of ‘speaking
with one voice’ is interpreted and practiced in a variety of ways by Board members. Different points of view also
emerged about the degree to which Board members believe that they need to adhere to the policy governance
practices as outlined by Carver. Some people expressed the desire for a process that presents a unified, planned,
approved interface between the Board and its constituency. Others held the view that this is too restrictive and that
the Board President, in particular (as lead spokesperson), ought to have the latitude to present personal perspectives
about controversial topics, offer fresh points of view, and generate responses from the Co-op membership. There
was concern that this practice at the Board level sets a tone and personality for the Co-op organization that doesn’t
reflect its operating standards and culture. The Board recognized that there are adequate, established communication
channels currently in use between Board members and Co-op members / community. However, there is not a clearly
delineated process in place for contributing information and perspectives to the web site. The point was also made


that policy decisions are made through consensus and that the Board ‘speaks with one voice’ through its policy
development and revision process. A request was made for the sense of the Board about clarification of the meaning
of ‘speaking with one voice’; no vote was taken nor any steps regarding policy development outlined.

The meeting broke for dinner at 6:30 p.m.

The meeting resumed at 7:00 p.m.

Policy Monitoring

Approval of GP Global Monitoring

MOTION: Peter Betts moved to accept Margaret Drye’s and Diane MacDonald’s monitoring report as in
compliance with GP Global.

Diane MacDonald seconded the motion.

VOTED: To accept Margaret Drye’s and Diane MacDonald’s report as in compliance with GP Global.

8 in favor, 0 opposed, 0 abstained, 1 absent. The motion passed unanimously.

The authors of the monitoring report noted that this policy needs some revision in order to “fit” with the specific
policies under its umbrella. They plan to offer a revision of the policy for Board consideration at the July meeting.

Approval of GP 1 Governance Development

MOTION: Kay Litten moved to accept Margaret Drye’s and Diane MacDonald’s monitoring report as in
compliance with GP 1.

Donald Kreis seconded the motion.

VOTED: To accept Margaret Drye’s and Diane MacDonald’s monitoring report as in compliance with GP 1.

8 in favor, 0 opposed, 0 abstained, 1 absent. The motion passed unanimously.

The Board agreed that during the past year they have conducted their activities according to the policy, and excelled
in their meeting attendance record, voting process, assessment, and transparency of decision-making.

Approval of EL 2 Monitoring Fiscal Performance

MOTION: Margaret Drye moved to accept Terry Appleby’s report as in compliance with EL 2.

Peter Betts seconded the motion.

VOTED: To accept Terry Appleby’s monitoring report as in compliance with EL 2.

8 in favor, 0 opposed, 0 abstained, 1 absent. The motion passed unanimously.

The Board discussed the benchmark ‘line of inflation’ and ‘line of jeopardy’, which the GM uses as a measure of the
Co-op’s financial status. If growth falls below these lines, the question was raised about the strategies that would be
used to respond to the situation. The GM told the Board that the Co-op has a plan to improve margins through
category management, shifting sales and margin outcomes through changes in product mix rather than merely
raising prices. The Board asked the GM to revise the ratios chart.

Priorities for the Upcoming Year and Board Retreat

The Board agreed to use the August retreat as its time for in-depth discussion about strategic priorities and long-term
Ends goals. They thanked CDS consultant Mark Goehring for his assistance with planning and facilitating the
upcoming meeting. The sense of the group was to continue efforts to engage members, to support local economy
initiatives, to consider the sociological influences of people’s food choices, and to better understand what drives the
bioregional agricultural community. The Board also intends to continue to promote cooperation at local, regional
and national levels. Sustainability initiatives are another high priority area.


The GM expressed his desire for clearly articulated Board priority expectations / policies regarding the operational
responses for its strategic plan; he mentioned the cautionary example of the New England Co-op Board which
transitioned from a thriving to a bankrupt organization in their attempt to simultaneously address multiple strategic
objectives. Mark Goehring agreed that the August retreat process will involve discussion of the long term strategic
possibilities and distillation of these into specific, narrower objectives for the medium term time frame (3-5 years).

A proposed strategic topic and questioning process was outlined for “What is the social good of the Co-op?” “What
would we lose if the Co-op was sold to Hannafords?” Input would be gathered through letters received on the topic,
additional perspectives would be considered through review of reports about corporate responsibility, and interviews
with former board members.

Each Board member agreed to complete the retreat worksheet and compile reading materials about topics of highest
personal importance. The worksheets and background reading will then be compiled and re-distributed to the retreat
group in the July meeting packet. The expectation is that a mechanism will be outlined for effective member
linkage, with goals and themes for upcoming membership annual meetings as one facet of this initiative. A comment
was made that it is a positive change for the Board to be planning ahead in this way.

Annual Meeting and Business Breakfast

While the Board felt that the annual meeting was successful, they acknowledged that Co-op member participation
continued to be low. During its assessment of the meeting, Board members offered suggestions for future program
refinements: change the evening format from Sunday to Saturday (Sunday thought to be a difficult day), offer light
refreshments appropriate to the time of day (the dessert buffet, while delicious, seemed inappropriate for the 5:30
p.m. event time), simplify the program agenda (it proved difficult to balance the need to provide ample opportunity
for member / Board dialogue and to present the featured speaker on schedule as advertised), facilitate dialogue
(between all Board members and the audience), use a setting that encourages member / board exchange of ideas
(while Hanover High School is conveniently located near the South Park Street Co-op store, the theater-style
auditorium and lighting created a feeling of distance and separation). The meeting staffing requirements and
associated costs were higher due to the two entrances at the high school facility and the overtime rates charged on
Sunday. Despite these concerns, the event linked well thematically with the Board’s Ends goals through the
selection of Michael Shuman as keynote speaker and the Board agreed to plan future annual meetings with this type
of program content objective in mind.

The Board was very pleased with the turnout for the business breakfast held the following day, featuring the same
keynote speaker, Michael Shuman; the audience was eager to attend and program evaluation feedback indicated that
this is a highly relevant topic in the Upper Valley. No discussion took place regarding next steps.

Hanover Cooperative Community Fund

Approval of HCCF Recipients

MOTION: Ed Howes moved to accept the HCCF committee recommendations for recipients of the available funds.

Diane MacDonald seconded the motion.

VOTED: To accept the HCCF committee recommendations for recipients of the available funds.

8 in favor, 0 opposed, 0 abstained, 1 absent. The motion passed unanimously.

The Board was encouraged to donate their Co-op refund checks to this fund, as a leadership gift gesture.

The current practice of asking members to sign their refund checks over to the HCCF was discussed and endorsed as
an excellent way in which to bring this charitable activity to the attention of the membership and encouraging them
to take action. Particular appreciation was expressed for Lebanon Store Manager Bob Hayes’ excellent leadership of
this committee over many years.


Executive Session

An executive session to discuss a real estate dispute was convened at 8:50 and ended at 9:30 p.m.

Meeting Review

There was no meeting review.

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

Respectfully submitted,

Eugenia F. Braasch Peter R. Betts

Board Administrator Secretary

Action Items:

1. Write a point-counterpoint article about “Members Capitalizing the Co-op” for the Co-op News. (Richard,
Mike, Rosemary)

2. 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 – pending)
3. Contract with a legal firm to conduct a comprehensive review of the by-laws. (Margaret, Don – pending)
4. Consider the issue of minutes transparency and style and make recommendations. (Peter, Richard)
5. Propose a process for addressing Hanover Co-op capitalization planning next steps. (Don, Terry, Genie)
6. Propose a process for Board budget preparation. (Richard and Diane)
7. Produce new Co-op Bylaws pamphlets incorporating the By-laws changes. (Genie, Allan)
8. Revise the Co-op financial ratios chart. (Terry, Roy)
9. Retreat planning: complete worksheet, compile, distribute to participants. (Board, Management Team, Genie)
10. Write Board biography briefs for use on the Co-op web page. (Margaret, Don, Kay, Diane)
11. Propose amendments to GP 2. (Kay and Margaret)
12. Revise GP Global Policy. (Margaret and Diane)
13. Propose revisions to Co-op Ends Policies, reflecting Michael Shuman’s recommendations. (Don)

June 18 Monitoring Reports

B-GM 1 Unity of Control. (Mike Yacavone)

B-GM 5 Board Administrator (Peter Betts)

GP 6 Nominating Process (Richard Schramm)