The Co-op Food Stores

GP Global – Governance Process Commitment

Approved 4/19/00

The purpose of the Board, acting on behalf of the Co-op members, is to set strategic, long-range direction, hire the GM, and monitor organizational performance. The Board will do this by using the Policy Governance process.

GP 1 – Governing Style

Amended 6/18/03

The Board will govern with an emphasis on strategic leadership and outward vision. Accordingly,

GP 1.1: The Board will be an initiator of policy that:

• is written,
• reflects its values and perspectives about ends to be achieved and means to be avoided, and
• is focused on the long-term effects outside the organization.

GP 1.2: The Board will:

• encourage diverse viewpoints,
• make collective decisions, and
• maintain a clear distinction between Board and GM roles.
• the Board will make all significant and important decisions formally by Board vote.

GP 1.3: The Board will strive for excellence through:

• group responsibility,
• discipline, meaning regular attendance, being prepared for meetings, following policy-making principles, and respecting one another’s roles,
• Board development and orientation, and
• self-monitoring of the Board’s process and performance.

GP 2 – Board Deliverables

Approved 9/20/00
Amended 9/17/03
Amended 10/18/06

The job of the Board is to represent the Co-op members in determining and demanding appropriate organizational performance. Accordingly,

GP 2.1: The Board will maintain and cultivate the link between the organization and the ownership.

GP 2.1.1: The principal objective of the member linkage program is to assure that the Board’s ends policies are in accord with the needs and aspirations of the Cooperative’s membership.

GP 2.1.2: The Board will employ a variety of methodologies on a systematic basis to achieve member linkage.

GP 2.1.3: For the purpose of allowing the Board to make effective use of insights derived from the linkage program, the Board will create and maintain reasonably detailed records of its linkage activities.

GP 2.1.4: The Board will establish a work plan/calendar that includes specific ends-related linkage objectives.

GP 2.1.5: Prior to the Cooperative’s annual meeting each year, the Board will monitor its linkage efforts for the previous calendar year via a written report. The Board will also monitor the progress of its linkage efforts by internal written report in June of each year.

GP 2.1.6: The Board will support its member linkage program with an appropriate allocation of funds from the Board’s budget

GP 2.2: The Board will produce written governing policies that, at the broadest levels, address each category of organizational decision:

• Ends: Organizational products, effects, benefits, outcomes, recipients, and their relative worth (what good for which recipients at what cost).
• Executive Limitations: Constraints on executive authority that establish the prudence and ethics boundaries within which all executive activity and decisions must take place.
• Governance Process: Specification of how the Board conceives, carries out, and monitors its own task.
• Board-GM Linkage: How power is delegated and its proper use monitored; the GM role, authority, and accountability.

GP 2.3: The Board will produce assurance of GM performance against Ends and Executive Limitations Policies.

GP 3 – Governance Development

Approved 9/20/00
Amended 01/21/04
Amended 07/21/04

Preamble

The Board will invest in its governance capacity. Board skills, methods, and supports will be sufficient to assure governing with excellence while incurring prudent costs.

Accordingly,

GP 3.1: While the Board will always be vigilant to avoid unnecessary or irresponsible expenses, it is anticipated that the total budget for the Board will typically be in the range of one- to two-tenths of one percent of the organization’s total revenues.

GP 3.2: Training and orientation programs should be used liberally to educate new and existing Board members in the skills and knowledge necessary to discharge their responsibilities effectively.

• It is expected that within the board’s overall budget, generally one- to five-one-hundredths of one percent of the Co-op’s total revenues should be allocated to Board training, which is defined as, but not limited to, the use of third-party consultants and educators, attendance at conferences and workshops (including travel to and from such events), and an orientation program for the entire Board each year.

GP 3.3: Outside monitoring will be arranged so that the Board can exercise confident control over the organizational performance. This includes, but is not limited, to fiscal audit and legal services.

• The Board will hire independent, third-party representatives, monitors and/or auditors at rates that are consistent with prevailing market rates for such services in the Upper Valley. The costs of such services should fit within the stated guidelines for the Board’s total budget.

GP 3.4: Outreach mechanisms will be used as needed to ensure the Board’s ability to listen to member viewpoints and values.

• The costs of such mechanisms should fit within the stated guidelines for the Board’s total budget.

GP 3.5: Each year, Board members are encouraged to attend at least one board meeting of another co-op and briefly report their observations. The goals of this policy are to learn from other boards and to advance the objective of cooperation among cooperatives.

• Requests to attend another co-op’s board meeting should be made directly by the individual Hanover Board members and be scheduled at the mutual convenience of the Board member and the hosting board president.

This policy will be monitored annually in March.

GP 4 – Board Members’ Code of Conduct

Approved 12/20/00
Amended 01/21/04

The Board commits itself and its members to ethical, businesslike, and lawful conduct, including proper use of authority and appropriate decorum when acting as Board members.

Accordingly,

GP 4.1: Board members must represent unconflicted loyalty to the interests of the ownership. This accountability supersedes any conflicting loyalty such as that to advocacy or interest groups and membership on other boards or staffs. It also supersedes the personal interest of any board member acting as a consumer of the organization’s services.

GP 4.2.1: Board members must disclose and address conflicts of interest with respect to their fiduciary responsibilities to the Cooperative. A Board member has a conflict of interest within the meaning of this policy when s/he or a family member has a material financial interest in an issue or matter pending for discussion or decision by the Board and Management.

GP 4.2.1.1 For purposes of this policy, a “family member” is a Board member’s spouse, domestic partner, or child, as well as the spouse of a Board member’s child or other relative of a Board member living in the same household as the Board member.

GP 4.2.1.2 For purposes of this policy, a “material financial interest” is (1) an ownership or investment interest in an entity whose transactions, arrangements, potential transactions or potential arrangements with the Cooperative are before the Board or Management, (2) a compensation arrangement, including and employment relationship, with any such entity, (3) fiduciary duties, as a Board member or otherwise, or executive-level management authority at any such entity, or (4) direct personal participation (other than as a Board member) in a pending matter before the Board. A person who owns shares in a mutual fund does not have a “material financial interest” as to any of the fund’s holdings unless the Board or family member directs or advises the fund in connection with portfolio transactions.

GP 4.2.1.3 A staff member who becomes a Board member does not have a “material financial interest” by virtue of her or his employment relationship to the Cooperative.

GP 4.2.2 When a conflict of interest exists, a Board member must take one of two actions to address the conflict: (1) The Board member may advise the President, either in writing or at a Board meeting, that the Board member has a conflict of interest, and thereafter the Board member must absent herself or himself from all discussions and voting of the Board on any matter related to the conflict of interest. (2) The Board member may advise the Board that a conflict of interest exists and may ask the Board to waive the conflict and permit the Board member to participate in discussion and voting on the matter. In the second circumstance, the Board member may participate in discussion and voting on the matter only by affirmative vote of the other Board members present and the Board may impose such conditions on the Board member’s participation as the Board deems necessary to assure openness, competitive opportunity, access to inside information and the public perception that the Board is conducting its business fairly and ethically.

GP 4.2.3 Board members may not use their positions on the Board to obtain employment for themselves, family members, or close associates. A Board member wishing to pursue employment with the Cooperative may only do so after she or he has resigned or her or his term of office has expired.

GP 4.2.4 Upon taking office as a Board member, each Board member shall advise the President in writing as to any conflict of interest the Board member has or is likely to have during the Board member’s tenure. Thereafter, consistent with GP 4.2.2, each Board member has an affirmative obligation to disclose conflicts of interest as they arise.

GP 4.3: Board members may not attempt to exercise individual authority over the organization except as explicitly set forth in the board policies.

Board members’ interaction with the GM or with the staff must recognize the lack of authority vested in individuals except when explicitly board-authorized.

Board members’ interactions with public, press, or other entities must recognize the same limitation and the inability of any board member to speak for the board except to repeat explicitly stated board decisions.

GP 4.4: Board members will respect the confidentiality appropriate to issues of a sensitive nature.

GP 4.5: Board members must comply with all requirements of federal and state law with respect to their roles as Board members. These requirements may include but are not necessarily limited to the obligation to provide the Co-op with a copy of the Board member’s Social Security card and the obligation to execute an affidavit with respect to the Co-op’s state liquor license.

GP 4.6: In order to contribute to the Board, board members must be capable of a high standard of behavior and performance.

• They must meet the qualifications and accept the obligations specified in GP 6 (Nominating Process).
• They must be civil, courteous, and professional.
• They must communicate effectively with the rest of the Board.
• They must fulfill their commitments.

GP 5 – President’s Role

Amended 01/21/04 Amended 06/21/06

The Board President assures the integrity of the Board’s process and, secondarily, occasionally represents the Board to outside parties.

Accordingly,

GP 5.1: The job result of the President is that the Board behaves consistently with its own rules and those legitimately imposed upon it from outside the organization.

• The President will assure that meeting discussion content will be only on those issues, which according to board policy, clearly belong to the Board to decide, not the GM.
• The President will assure that deliberation will be fair, open and thorough but also timely, orderly and kept to the point.
• The President will call for a vote on all seconded motions from the floor.
• The President will assure that all decisions are voted.
• The President will assure that diverse viewpoints are allowed to be presented at Board meetings and that all Board members are free to present their views to the Board.

GP 5.2: The authority of the President consists in making decisions that fall within topics covered by board policies on Governance Process and Board-GM Linkage, except where the Board specifically delegates portions of this authority to others. The President is authorized to use any reasonable interpretation of the provisions in these policies.

• The President is empowered to set the agenda and chair board meetings, with all the commonly accepted powers of that position (for example: ruling, recognizing, etc.).
• The President has no authority to make decisions about policies created by the Board within Ends and Executive Limitations policy areas. Therefore, the President has no authority to supervise or direct the GM.
• The President may represent the board to outside parties in announcing board-stated positions and in stating decisions within the area delegated to the President.
• The President may delegate this authority but remains accountable for its use.

This policy will be monitored by annual report of the President followed by an executive session with the General Manager and without the President in November of each calendar year.

GP 6 – Board Member Nominating Process

Amended 8/21/02
Amended 04/18/07

To insure continuation of effective leadership and governance, the Board commits itself to recruiting high quality candidates for open Board positions. Accordingly, the Board will appoint a Nominating Committee, constituted according to the Bylaws. The Nominating Committee will be responsible for the following activities:

GP 6.1: Recruit and identify potential candidates for the Board of Directors and when requested by the Board, for other broad committees.

GP 6.1.1 The Nominating Committee will identify potential candidates who share the following qualifications:

• Candidates will be committed to serve the Co-op and its members.
• Candidates will be actively interested in linking to members and have a preference for long-term, strategic, and conceptual thinking.
• Candidates will be willing to learn and work within the Policy Governance model (which will be explained thoroughly in the Orientation for new board members).
• Candidates will be able to participate thoughtfully and assertively in deliberation, showing full respect for the opinions of others.
• In accordance with the Bylaws, Article VII Section 1, “Only members of the Society may serve on the Board of Directors.” The Board interprets this to mean that a non-member may be proposed for nomination, but he or she must become a member before being considered for candidacy.
• Candidates will have a Social Security card, or have begun the process of obtaining one. This is necessary because the Food Stamp program requires the Co-op to keep on file a copy of every Director’s Social Security card.
• Candidates who have been convicted of a felony will notify the chairman of the Nominating Committee as soon as possible. This disclosure is necessary due to laws governing the Co-op’s state liquor license. The Nominating Committee Chair will need to provide guidance to the candidate so he/she can begin the process of obtaining a state liquor license waiver.
• Candidates must be able to communicate by email.

GP 6.1.2 Nominating Committee members will communicate with potential candidates about the nominating process, the election process, the requirements of their service, and encourage potential candidates to attend a board meeting(s) if they have not already done so. The Nominating Committee will make clear to perspective candidates the obligations associated with board membership. Board members serve as unpaid volunteers who are expected to commit a significant amount of time per month to board activities, which include:

• Preparation for and attendance at monthly board meetings (6-8 hours per month). Meetings take place on the third Wednesday of each month from approximately 5:30 PM – 9:00 PM with dinner provided by the Co-op Catering Department.
• Participation in various working groups (e.g., committee work) during the month (2-3 hours per month);
• Participation in the planning and conduct of the Annual Meeting (a few hours plus the evening meeting each year);
• Participation in events, such as Dairy Day, Harvest Day, Voting Booth, and ballot counting. (several hours a few days each year).
• Attend annual Board “Advance” day-long session and other leadership or cooperative development training sessions (from half-day to full day sessions, usually held on weekend);
• Attend the annual CCMA conference one or two times a term (will require long distance travel and being away from home for four days time).

GP 6.1.3 Communicate with new candidates that requirements for their personal statements for the Co-op News, and provide them with any necessary support to prepare and submit this information in a timely manner.

GP 6.1.4 To insure a competitive election, the board will strive to recruit a sufficient number of applicants to provide for two more candidates then open Board positions. The chair of the Nominating Committee will present a slate of candidates at the February Board meeting, which includes why each candidate is qualified for Board membership, for Board approval.

GP 6.1.5 Schedule Board member participation to count ballots and inform candidates of the election results.

GP 6.1.6 Connect with new (first name) board members before they attend their first board meeting to confirm meeting time, Board materials they will require, forms needing to be filled out, and welcome new board members at the first meeting.

This policy will be monitored annually by direct report of the Nomination Committee to the Board at the time the Committee presents the slate of candidates for Board approval.

GP 7 – GP 7 – Monitoring Board Performance

Approved 7/16/03
Amended 4/16/05
Amended 12/20/06
Amended 06/20/07

The Board will assess and improve its own performance by annual assessment of compliance with board policies on Board Process and Board-General Manager Relationship.

GP 7.1 The Board will monitor Board Process and Board-General Manager Relationship policies annually.

GP 7.2 Responsibility for preparing and presenting a brief monitoring report with respect to Board Process and the Board-General Manager relationship will be allocated among all Board members. When applicable, suggestions for improvement will be included in the brief monitoring reports.

GP 7.3 Reports will be discussed at Board meetings to determine the voice of the Board and to take relevant action as needed.

GP 7.4 The Board will disclose self-evaluation compliance information to the membership annually.

GP 8 – The Hanover Cooperative Community Fund

Approved 5/16/01 Amended 10/20/04
Amended 4/16/03 Updated 9/8/06

The Hanover Cooperative Community Fund (HCCF) provides the Co-op with a long-term community giving solution. As a permanently endowed fund intended to grow over time, a portion of its annual return is available to be donated to qualified organizations of the Co-op’s choice.

The fund is managed by the Twin Pines Cooperative Foundation (TPCF), a California-based tax-exempt 501©3 corporation (see the Appendix for the contract). The Board guides the fund through an Advisory Committee and the GM.

GP 8.1: The HCCF Trustee Advisory Committee: The HCCF will be managed by a special committee of the Society (Bylaws: Article VII, Section 5, number 9), “The HCCF Trustee Advisory Committee.” The Committee will follow the most recent contract made with TPCF.

GP 8.1.1: Committee Composition: The HCCF Trustee Advisory committee will serve until the Board of Directors specifies otherwise.

• The Board of Directors shall elect one of the current Directors as a member of the Committee. The Board will also designate a chair of the committee who will serve in such capacity for a term of one year or until his/her successor is duly elected and qualified.
• The Chair of the Committee will select its own members, subject to the approval of the Board of Directors.
• The Committee will have a minimum of four members and a maximum of ten.
• Names of Society members who may be qualified to serve on the HCCF Trustee Advisory Committee will be provided by the Nominating Committee (Bylaws: Article VIII, Section 6).

GP 8.1.2: Donations: The HCCF Trustee Advisory Committee will annually recommend to the Board disbursements in accordance with the Ends policies and the TPCF contract.

GP 8.1.3: Conditions: The Co-op reserves the right to place restrictions or conditions on all contributions. Contributions are also subject to the conditions stated in the contract with TPCF and other Board policies, including EL 9.2.

GP 8.1.4: Acknowledgement: Wherever appropriate, the Co-op will request public acknowledgement of its contribution as well as a written acknowledgement of receipt of the contribution.

GP 8.2: Fundraising and Member Education: The Advisory Committee will

• Develop and submit for Board approval a fire-year fundraising plan.
• Assist the GM in fundraising for the HCCF.
• Assist the GM in educating members and the community about the HCCF.

GP 8.3: Transaction Account: A local bank account will be maintained by the Co-op to hold funds being collected (such as patronage refunds turned over to HCCF) temporarily prior to sending them in a lump sum to TPCF.

GP 8.4: HCCF Trustee Advisory Committee: The HCCF Trustee Advisory Committee is responsible for the contract management and fund monitoring activities of the HCCF. This committee will:

GP 8.4.1: Ensure that the most recent contract with TPCF is included in the Co-op Governance Policies handbook.

GP 8.4.2: Work in conjunction with TPCF to manage the contract so that it reflects:

• Investment policy that fits the Co-op’s goals, including the levels of return and risk
• Reasonable administration fees
• Avoidance of penalties
• Issuance of checks in a timely manner

This policy will be monitored annually by two reports:

• By direct report of the HCCF Trustee Advisory Committee. (See Appendix for monitoring report guidelines.)

GP 9 – Working with Neighboring Co-ops

Approved 4/21/04
Amended 12/20/06

The Board shall work with our neighboring co-ops to increase Board effectiveness and explore our shared Ends.

This policy will be monitored annually by report of the board president.