THE IMPERFECTIONS THAT DEFINE US

Navigating the complexities of food co-op governance

by Jon Steinman, Author, Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants

Food co-op news and newsletters don’t often delve deeply into the systemic challenges food co-ops face internally, and for good reason. There’s a whole lot else to celebrate, and people and products to showcase in your co-op’s communications. But behind every product, every decision, are systems and people, and as an owner of your grocery store, it’s important to be reminded (or introduced) to some of what goes on behind the scenes.

For me, I’m fresh off delivering a webinar on the 125-year history and evolution of grocery stores and food co-ops, and “wow” — packing that much history into a one-hour webinar really illuminates how the challenges of today are so often residual effects of earlier times. While the evolution and adaptations of these systems are commendable, we mustn’t ignore their imperfections, and we should also consider whether these embedded challenges, which can so often lead to disagreement or conflict, might be the essential ingredients of a democratic institution made up of highly opinionated – ahem – “passionate” individuals!

Take the origin story of many of the 1970s-era food co-ops that have defined the sector. What began as informal gatherings of idealistic eaters and changemakers, evolved into what are today multi-million dollar operations, some with hundreds of staff. Food co-ops would go on to become essential and formidable community institutions while also reshaping local and global food systems. While many internal operational and governance systems have evolved and adapted over this time — namely the shift from a reliance on volunteer labor to organizational structures of paid staff and management teams – other systems and cultural norms have not, or may not have adequately evolved to meet the moment as best they can. This, of course, is all up for debate and inquiry, but the fact remains: all food co-ops have inherited both the known and the unknown, for better or worse.

This is an assessment of these imperfections, as well as the quirks and curiosities that seem essential to ensuring food co-ops preserve their democratic foundations.

This assessment doesn’t attempt to propose any solutions or pass judgment. Rather, I’ve tried my best to be matter-of-fact. In this way, perhaps these reflections might reveal just how amazing it is that there are people in our communities who willingly, and mostly voluntarily, choose to navigate these imperfections. Perhaps this might also amplify our shared appreciation for the General Managers/CEOs who are the conduit through which food co-op members and their boards engage with the store’s operations. They too have the monumental task of running a low-margin, highly competitive grocery store, with all of its own imperfections and hard-working, passionate staff.

I should note, that this is a general assessment not specific to any one co-op, nor should it suggest any of these challenges are taking place at your own food co-op.

Seven Often Unspoken Challenges at Food Co-op Boards

Retail food co-op boards of directors have faced a variety of challenges throughout their histories, particularly when it comes to their relationships among each other, with the General Manager (or CEO), and with member-owners. Some challenges are similar to those at other businesses and organizations, particularly those that are mission-driven, but some are entirely unique to food co-ops.

1. Governance and Decision-Making Structure

• Conflicts over governance style: Many co-ops operate with a democratic, member-driven model, which can sometimes lead to disagreements about the level of involvement that members and the board should have in day-to-day decisions. For example, board members might clash over whether to prioritize member input on operational matters, or focus on efficiency and long-term strategic goals. While Policy Governance seeks to clarify these roles, these conflicts often reappear.

• Board turnover and inconsistency: Volunteer or elected boards often experience high turnover, which can lead to instability and a lack of continuity in leadership and legacy. This inconsistency can affect the co-op’s ability to make long-term plans or maintain a cohesive vision.

• Board training and competence: As co-ops grow, boards sometimes struggle to find directors with the expertise needed to navigate complex business and financial issues. Without adequate training, board members may struggle with strategic planning, financial oversight, and balancing member interests with business realities.

• The limits of volunteers and the fiduciary conundrum: The role of board directors in food co-ops presents a unique challenge, as these individuals are often volunteers*, balancing their commitment to the cooperative with the significant fiduciary responsibility that comes with overseeing the business. While they are not compensated financially, their duty to act in the best interests of the co-op, ensuring its long-term sustainability, legal compliance, and ethical practices, demands careful attention and decision-making. This blend of voluntary service and serious financial oversight can seem paradoxical.

(* Some food co-ops offer small stipends or store credit to directors.)

2. Balancing Member Interests with Financial Sustainability

• Tension between community values and business needs: Food co-ops are often founded on principles of community engagement, sustainability, and social justice, but maintaining these values while ensuring the financial success of the co-op can be difficult. Whereas many of these matters are negotiated operationally among management and staff, board members engaged in the co-op’s strategic planning may also become conflicted about how much to prioritize lower prices or ethical sourcing versus the co-op’s bottom line.

3. Internal Power Dynamics and Communication Issues

• Power struggles: Boards of directors in food co-ops can sometimes face internal power struggles. These conflicts can slow down decision-making and create a tense board environment.

• Ineffective communication: A lack of effective communication, or different styles of communication between board members, or with the General Manager, can lead to misunderstandings or feelings of disenfranchisement. If board members aren’t on the same page, they may also struggle to communicate a unified vision to the co-op's membership.

4. External Pressures

• Competition from large grocery chains: In recent years, many food co-ops have faced increasing competition from mainstream grocery stores, especially as larger chains have embraced organic or local products. Some boards have had difficulty figuring out how to maintain their unique identity and community-based ethos while competing with these larger, more established players.

• Economic downturns and market pressures: Food co-ops are often highly sensitive to economic shifts because their revenue depends on members’ and customers’ discretionary spending. In conjunction with the General Manager, board members may face tough decisions on how to respond to downturns in the economy or consider growth without losing the co-op’s core values.

5. Maintaining Membership Engagement and Retention

• Member apathy: As co-ops grow, it can be difficult to maintain the active engagement of members. Board members might struggle with how to keep members involved, both in terms of voting and in other aspects like volunteering* or serving on committees* (*if applicable). Member apathy can also affect the perceived legitimacy of the board’s decisions.

• Member education: A common challenge for boards is ensuring that members are well-informed about the co-op’s financial position, governance structure, and strategic direction. Mediums of communication have also become more diverse and fragmented in the dominant culture. Without a strong understanding of all that’s happening at their co-op, members may be less likely to participate in important decisions should they arise, or may be misinformed on systemic and cultural issues.

6. Cultural and Ideological Divisions

• Ideological disagreements: Co-ops are often a place for people with strong social and political convictions, which can lead to tensions between board members with differing views. Issues such as environmental sustainability, ethical trade, or the role of food sovereignty can lead to debates that make it difficult for the board to reach consensus on the direction of the co-op.

• Inclusive decision-making: Ensuring that all members feel represented on the board—especially historically marginalized groups—can be challenging, particularly when the board’s composition is not reflective of the composition of the communities it serves. This can lead to a lack of diversity in decision-making, causing some members to feel excluded from the co-op's governance.

7. Financial and Operational Viability

• Access to capital and funding: Food co-ops often struggle to secure financing because they are typically small entities with limited access to traditional forms of capital. This can slow down a food co-op’s desire to grow or renew while the grocery market continues to rapidly evolve.

• Growth vs. maintaining the community focus: As food co-ops expand, they may face the challenge of maintaining their community-oriented, local identity while scaling up to meet greater demand. Balancing this growth with a focus on member engagement and the co-op's mission can create tension between directors and the broader membership base.

As the above list helps highlight, historic and present-day challenges experienced by food co-op boards of directors often revolve around governance, communication, and balancing member interests with business realities. These struggles, while complex and sometimes daunting, also reflect the core values of co-ops: democracy, community, and sustainability. In this way, it seems appropriate that these challenges and struggles be celebrated as an inherent characteristic of what makes food co-ops different. Without question, they also help lay out areas for where all food co-op stakeholders, including member-owners, can extend support, understanding, and appreciation.

At the heart of every co-op is a community of people who care deeply about creating something better — a more equitable, sustainable, and inclusive food system. By acknowledging these challenges and supporting one another, we strengthen the foundation of our co-ops, ensuring they continue to thrive for generations to come.

Jon Steinman is the author of Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants (New Society Publishers). He’s an owner-customer and past board director and President of the Kootenay Co-op in Nelson, British Columbia. www.grocerystory.coop

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