Saturday, February 7, 2009

Critique of Policy Governance

"Policy Governance" is a system of governing an organization that purports to allow Boards to operate more effectively, as they concentrate on the “ends” and direct the management to be responsible for the “means.” The Oneota Co-op’s governance is adapted from this model. Some suggest that our coop's strict adherence to this model may need reexamination, and may be part of the reason for the issues we are facing today.

Following is some critique of the Carver Policy Governance ® model, from the Institute on Governance

“However, the policy governance model has significant problems. Many organizations have tried to adopt it, and have had great difficulty making it work. Some say they are using the Carver model, but even a cursory review of their practices reveals that what they are actually doing is far removed from Carver principles.

Many board members and executive directors or CEOs interviewed in the research that informed the development of this web site said they found the policy governance model to be too rigid. Others indicated that they tried to adopt it but had to modify it to make it work — and when this model is modified to any degree it is no longer the Carver model.

The non-profit sector encompasses a broad spectrum of organizations at different stages in their organizational life. These organizations have different conceptions of what a board's functions need to be and also differing principles underlying the board's role.

Yet, Carver insists that the model works best when adopted in its entirety and that its failure can only be attributed to incomplete or improper implementation.

Carver’s “one best way” focuses on process and the development of a well-designed system but makes little allowances for human nature. Yet, in all organizations, leadership is essential if well-designed systems are to be made dynamic.

Carver makes high demands of the people in the system. Critics have pointed out that the model needs ideal board members to function properly, ones that truly know the organization and possess exceptional understanding of the organization's strengths and weaknesses. Board members of this calibre might be difficult to find. The time demands on board members are also high, requiring them to be briefed on internal matters and to connect with external stakeholders. Carver makes the assumption that weak members will be neutralized or got rid of and strong members will be found and retained.

Great demands are made on management, who require the necessary skills to implement the ends set by the board. Weaknesses and inadequacies on either side can not be compensated for through mutual-help and team-like activities between staff and board, since it is thought that this would result in a confusion of roles.

The Carver model requires a separation of board work and staff work, with the CEO as the official link between the two. The benefit of this approach is that roles and responsibilities are clear, as is accountability. However, the danger is that the board and staff feel disconnected from each other. With the separation of roles, board members lose their understanding of programs because of a lack of program details. Staff may be resentful or dismissive of board decisions when they perceive the board as remote and without understanding of implementation realities. The staff may also feel disempowered to contribute to the direction of the organization.

Carver neatly separates ends and means. There is extensive literature on this topic, and the conclusion of much of this literature is that this apparently simple separation cannot be maintained in practice (For example: is democracy an end or a means?). Critics also point out that insights about ends and broad strategies are to be found in all parts of an organization. To suggest that staff should be sealed off from reflection about strategy and organizational ends (because this is the board's preserve) is impractical and potentially damaging to both the organization and morale.

Four empirical studies have been published which examine, either exclusively or in part, the Policy Governance model. In a review of these studies, Alan Hough and colleagues from the Queensland University of Technology said, “On the current evidence it cannot be shown to be more effective than other approaches to board improvement. What seems to be important is that boards make some attempt to improve their performance.” (Corporate Governance Quarterly, Summer 2005 edition)”

Jan. 12 letter from Liz Rog

Dear Co-op Community,

There has been an overwhelming response to the appeal sent out on Friday regarding our Co-op. I say "regarding our Co-op," because that is exactly what it's about – it's not about Liz Rog. As the person who bears that name, I would like to share with you my understanding of the issues before us, and of our responsibilities to the Co-op that we love and need.

I have had the honor and pleasure of holding the position at the co-op that is specifically charged with, among other things, a cornerstone of our stated mission and vision: caring for community, education, outreach, and member services. It's because of that, along with the fact that I've worked at the Co-op for 25 years, that I've become one of the symbols of what we are here for. We sell good food that people need, and we must continue to do that well in order to survive; at the same time, we provide many other significant things. Our membership – indeed, our wider community as well, for we have become a valued and respected institution in NE Iowa – feels deeply connected to our mission. What a treasure! What would any organization give to have such community investment!

My situation has merely been the catalyst for wide discussion about our Co-op's meaning and its future, as we rise up to address whatever it is about this situation that makes us curious or upset. Here are the issues as I see them, listed in order of importance.

We must protect our Co-op – this irreplaceable, courageous, tenacious, living and growing organization that provides us with a vehicle for our best energies in sustainable and just food systems, ecological living, local democracy, and community building. What I'm saying here is, please don't manifest your feelings – whether they be anger, cynicism, desire to stay away from it all, or anything else – as a choice to shop less at the co-op. If we parents are upset with our children, we still love and nurture them so that they can continue to evolve into their best selves. In the same way, we must continue to nurture our dear co-op – economically and, for those who choose, philosophically as well. This is the most important thing!
For where would we be without our Co-op? Where would we find access to the foods that we want to eat, and the opportunity to vote for sustainability with our food dollars?

2. As long as our co-op is alive and well, it can continue to evolve according to our passion for its purpose. We have weathered many storms in the past and come through them with new strength and vision. This could be a golden opportunity to stretch and grow more than ever before! We may be on the verge of a brilliant transformation (along with the rest of the world), with collective wisdom to guide us far. Maybe we will reexamine and reacquaint ourselves with some of our defining systems of governance and communication; maybe we will revisit and renew our dreams; maybe we will reactivate and regenerate our membership. Member involvement is alive and well at Oneota Co-op – the things we could do with this kind of energy!
A special note here, on conversation and conflict: Who among us hasn't had the terrible experience of watching differences of opinion among otherwise friendly neighbors turn to anger and division? We've seen it so many times in our world, near and far. The energy of fear and mistrust is virulent, but we don't have to be a part of it. Can the Co-op community be a model for open engagement that is afraid of neither conversation nor conflict? Could this be the time and place when we choose, rather than closing our ears to another's view, to continue to move toward serious and civil resolution? Let's do it, and when we find ourselves falling into the destructive ways we've seen too many times, let's just start over again with a plan to be kind.

For where would we be without our Co-op? Where else could we have the opportunity to engage locally in a conversation with a group of 3,000 about how to promote democracy, respect, and lasting value?

3. Maybe I will be able to continue to work at the Co-op, and maybe not. I would love to resume my work there, both because I have things to offer, and also because it may be wise (however unconventional) for the Co-op to honor the grassroots, visceral reaction to this layoff and what it seems to represent to our membeship. If I don't continue to serve the Co-op, I am certain that I can find other meaningful work. But my desire to work there pales in comparison to the passion I feel for keeping our co-op healthy and vital. I would never have chosen to be the catalyst for the broad and essential discussions we have begun, but given the realities, I can only hope that the process we are about to enter – possibly a special meeting to address some of these issues, and who knows what after that – is the beginning of a new, active, and exciting era for our Co-op.
For where would I be without my Co-op? Whether I am on staff or an active member, I would be bereft without it. If my recent layoff and the response to it –no matter what the outcome for me – were to harm the Co-op more than it matured us, I would be ashamed and sad, and I would start to think, as some organizations do, that people shouldn't be allowed to work at the same place long enough to leave a mark.

If you are upset about anything at the Co-op, call yourself lucky to have a local co-op to care about and feel invested in. If you are upset that others are upset, just keep coming for the things you want and ignore the rest. If you want to change the world, start right here at home, with your efforts to interact peacefully with others who share many of your same ideas for a healthier world.

The co-op has an incredibly caring, intelligent, and capable staff, with hundreds of years' experience. We have a board of directors that is truly committed to wanting the best future for our Co-op, and has worked very hard to support it. It is awe-inspiring to think of our evolution thus far, and overwhelming to see your support for our values and our future. Keep it alive. Pay attention, listen, talk, act, and keep shopping co-op!

Yours in Cooperation,

Liz Rog

PS. If it's been awhile since you looked over out mission and vision/values statements, you might like to read on.


Oneota Community Co-op
Mission Statement
The Oneota Community Co-op exists to provide its members with:

· Foods produced using organic farming and distribution practices with an emphasis on supporting local and regional suppliers;
· Reasonably priced whole, bulk and minimally packaged foods and household items;
· Products and services that reflect a concern for human health and the natural environment and that promote the well being of workers and communities which produce them.

Oneota Community Co-op
This vision and values statement is a framework for the growth and development of Oneota Community Cooperative.

The Oneota Community Co-op is committed to the full integration of our mission and the cooperative principles which follow the Mission Statement. We recognize that this process will evolve by taking into account local conditions, member input, and the financial security of the cooperative.

We envision a community where producer and consumer cooperatives thrive and are viewed as an integral part of a sustainable economy. Through careful use of its capital resources, we believe that the Co-op should provide for its future needs and for an expanded leadership role in efforts to build a healthy community.

Accordingly, at the policy and operational levels, decisions of the cooperative will be considered in the context of the mission, co-op principles, and the vision described above. Specific goals include the following:

· Reaching out to support local producers and other local cooperative businesses;
· Selecting products which are responsive to members needs and consistent with the mission(in addition to organic practices this may involve other environmentally benign production methods);
· Establishing purchasing relationships which compensate producers directly where possible;
· Building support and action networks with other cooperatives;
· Educating our members and community about the purposes of the Co-op and the potential benefits which accrue to members;
· Working with local and regional organizations to promote sustainable economic activity;
· Developing a social fabric that promotes friendship, sharing and caring for the people in our community.
At Oneota Community Cooperative, we believe that cooperation is a hallmark of successful human endeavors. By expanding our efforts in these areas we can better serve the well-being of our members and the larger community.

Petition News

Birgitta Meade
provides an update on the petition effort
A few days after the petition started I took the role of compiling and verifying paper and email signatures. The petition, the first ever use by Oneota Co-op members of this bylaw provision, asks that the board call a general meeting of the membership to consider the reinstatement of Liz Rog. The bylaws require that 20% of the membership sign the petition. I have been in steady email contact with board president Steve Peterson, but he has not yet said exactly how many signatures are required. I am quite confident that there are enough signatures already. Tomorrow, Monday the 2nd, I will be meeting with Steve to merge the paper lists and the email requests sent directly to the board. I do not know if we will be able to discuss the scheduling, agenda, and organization of the meeting, but I certainly hope so.
I did not sign the petition until yesterday. My reason was that I was uncomfortable with the wording of it. I want a meeting to discuss the systemic problems with governance, management, and communication at our co-op. The layoff of Liz Rog is only one component of that. Now that I see that the board has eliminated private balloting, I feel that this petition, even with its flawed wording, is the only way for the membership to address policy issues quickly enough to stave off further economic damage to our co-op.

Birgitta prefers to be reached by telephone at 382-2866, but you can also email her at

Reflections on recent Board Meeting

Andy Johnson
reflects on the recent Board or Directors' meeting

The Co-op's board met for their January meeting on Thursday the 29th at the Senior Center starting at 5pm. I can't say how many people were present but the place was packed, all seats were taken and many, many people were standing in the back. There were numerous introductions and agenda items, but the heart of the meeting was in three main parts. I'll try to describe them briefly and fairly, and save my own reflections for the end. I hope that the Board posts all relevant documents - financial statements/presentation, Board statement, minutes, other items - on the web site in a very timely manner so that those not in attendance have a chance to peruse.

Much of the early part of the meeting was devoted to Michelle Schry - outgoing interim General Manager - presenting her comprehensive financial summary. The Co-op is not in a good situation economically, and the picture of a clearly worsening balance sheet and falling working capital is sobering. Michelle placed much emphasis on labor costs, which an outside audit from last fall and her own experience show to have been (at least until recent layoffs) very high relative to sales in the context of the co-op world. According to her numbers, we are very close to not paying our bills on time, and a number of negative consequences could spiral from there.

Then Board President Steve Peterson read a statement from the Board, which attempted to address some of the questions and concerns of members and to "make the layoffs more understandable". The statement provided responses to many posed questions, including: "Why restructure and lay off Liz"; "Are we more than our bottom-line?"; "Does the Board adequately oversee the GM?"; and "Is the Board too isolated from staff?" The statement was thoughtful and placed repeated emphasis on the 1) importance of adhering to the policy governance and 2) insisting that in the current financial crisis we direct all efforts towards running our Co-op as a business.

Eventually the meeting was opened up to a member comment period, with Barb Ettleson given the unenviable task of moderating. Passionate, thankful, intellectual, forceful, deliberative, angry, calm, philosophical ... just begin to describe the range of comments and mini-presentations that no summary can do justice. Strong counter-arguments were given to the stated financial reasoning behind Liz's layoff, with details supporting the true economic value Liz has brought to the Co-op (hundreds of thousands in volunteer organization/coordination during the new store renovation alone) and the minimal savings accomplished by letting her go, along with much history of the staff-GM struggles of the past year plus. Commendation was given to Michelle for the quality of her financials presentation, and support was voiced for the Board in its commitment to developing and adhering to their policy governance. And many, many calls were made to the Board to step back and reconsider, and to open a more structured, formal dialog with all parties to address the issues that brought us to this point and find a solution acceptable to most involved.

A few of my own thoughts on some issues raised:

· The Board continues to hold to the position that Liz was laid off for strictly financial reasons, but much of what was presented at the meeting (and that I have heard directly from other staff) indicate that is at best only part of the story. The financial situation is clearly dire, but when faced with financial crisis we shouldn’t be letting go of top talent, *especially* when the direct savings will be quite small for the foreseeable future (when we most need that talent) due to ongoing contract obligations.

· It struck me that Michelle placed some emphasis on the fact that an audit just this past fall came to the same conclusions of one roughly five years ago: that our labor costs are way too high and are threatening financial survival. But we didn’t cut our most experienced staff five years ago and we survived. I suspect that a similar audit any of the past 20 years may have made similar recommendations, yet our Co-op has survived and thrived and been profitable *because* of our people, not in spite of them – apparently until 2008, a new store, a new GM, new policy governance, and a recession.

· The Board statement honestly recognized an inadequacy of communication between the Board and staff. The solutions developed this past summer, however (a staff survey, and encouraging the staff to voice their concerns as members at Board meetings), continue to discourage open and honest staff-board communication in times when it is most important, and are wholly inadequate to address situations of staff-GM conflict in which the Co-op found itself this past year. More effective formal and structural channels of communication are sorely needed, and needed quickly.

· The Board called on membership to support their focus on the bottom line, on cutting the operation to the bare bones, and stated that the two most important things members can do are shop more at the Co-op, and help attract/welcome new customers. In times of financial crisis it seems to me there are three broad approaches: cut costs (in our case labor), increase revenue, or a combination of the two. Labor costs were already greatly reduced *prior* to Liz’s layoff. If there was anyone at the Co-op capable of bringing in new members/customers, or successfully exhorting current members to spend more, it is probably Liz Rog. If there was anyone whose layoff was more likely to negatively impact sales (through seriously upsetting very large numbers of dedicated, high-spending members) it was Liz Rog. It just wasn’t the best decision, financially or ethically.

· Which brings me to my last point. The Board’s statement included this quote: “For too long we have thought we were immune from the considerations of the business world. The Board stands here tonight to say that we no longer have the luxury to imagine we are different from the rest in this regard. The Board’s role, right now, is to be the voice that insists we run our Co-op as a business so we can fulfill our Co-op’s purpose.” Besides being unfair to past management who ran the Co-op as a successful business for over 30 years, this statement seems to suggest we can somehow set aside two-thirds of our name – Oneota *Community Cooperative* - until things improve and we can come back to revisit all that those terms mean to members. An alternative perspective might be to realize that we have only succeeded financially for over 30 years precisely *because* we were able to work together and to imagine and create community, and it was that *community* - not cutting to the “bare bones” – that pulled together and did anything and everything it took to succeed in times of crisis and great change.

In closing I should say, with as much humility as I can muster through this impersonal medium, that our current Board has taken on more challenges and been faced with more troubles than perhaps any other. I honestly can’t be sure how I would have acted had I had been serving along with them, working from their perspective and enduring their struggle – I would hope as a conscientious objector of late, but none of us can be sure. I also want to place our very local struggle in a larger context. Of course, parallels to the national political and economic scene may be reaching, and even a bit cliché-ish, but are not entirely irrelevant. If you’ve made it this far, humor me and read on, if for no other reason than to be inspired to imagine a better way.

Not too many years ago, in a time of true national financial and political crisis, our President exhorted us all to shop more. It was advice sincerely given and grounded in economic fundamentals, though lacking in moral authority and unifying power. Now our little store and our big country are again in a time of financial crisis, and our current president offers very different advice upon taking the oath of office:

“.. every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forebears, and true to our founding documents."

"Now, there are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans. Their memories are short, for they have forgotten what this country has already done, what free men and women can achieve when imagination is joined to common purpose and necessity to courage. …"

"For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break; the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate."

"Our challenges may be new, the instruments with which we meet them may be new, but those values upon which our success depends, honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old.
These things are true. They have been the quiet force of progress throughout our history."

"What is demanded then is a return to these truths. What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task. This is the price and the promise of citizenship."

Andy can be reached at , or (563)382-0537

Elections for Board of Directors

Randi Berg
comments on the ballot for the Board of Directors election,

Hello fellow concerned member-owners. Thank you to those who turned out at the senior center in a wonderful display of support for our co-op and Liz! It was an interesting board meeting, largely civil, with the chance for multiple points of view to be expressed.

A point was raised in the question period about the appearance of the ballot this year. There are two significant changes that should be noted. For the first time ever, two of the candidates are designated as "board recommended". The Board states that there is no intention in this to show preferential board support for these two candidates, but the wording still bothers me. If it bothers you too then let the board and Troy Bond know!

Second, for the first time ever, the member's name and signature are required on the ballot. It would seem to me that some people might not vote or might have their choice influenced by the fact that whoever counts the votes will have a direct look at who votes for whom. Again, balloting in the past has always been done with no way of knowing how an individual has voted - so this is a significant change in procedure.

This is a particularly important board election, so please read the candidate statements carefully. We know that two wonderful candidates, Andy Johnson and Birgitta Meade, have come out in support of a member meeting. Ben Nauman of Iowa City/Minneapolis appears to have strong feelings of opposition to any efforts to reinstate Liz, whom he has described as being almost ready for retirement anyway. I ask you, how many 47-year-olds are able to contemplate retirement? Surely not those who are on co-op wages! I promised to keep this brief and am already dangerously near to breaking that promise. All I ask is this -- remember to vote, and consider your choices carefully. If you don't like the changes in voting procedure, let the board and GM know your feelings. Enjoy the warm weather and shop at the co-op!

Randi can be reached at

Sunday, February 1, 2009

Welcome to "Our Oneota Coop"

Welcome to this forum for discussing one of our favorite local places, Oneota Community Coop. In the coming days you can look here to read some of the many letters members have sent to the board, as well as messages from board candidates Birgitta Meade and Andy Johnson.