Explanation & Application
When you become an owner of Good Foods you join 4,900+ members of our community in supporting this locally-owned cooperative business.
- Benefits begin with your first payment.
- We have three payment plans
- $20/ month for 10 months
- $45/ year for 5 years
- $25/ year for 10 years
- Household members may receive a shopping card.
- Your share is refundable.
- The purchase price of a share is $200.
- The $200 is a one-time investment.
You can become an owner at Customer Service or complete the owner brochure and mail it in.
Click here to download the Owner Brochure (pdf)
Owner Benefits
Good Foods owner benefits just got sweeter! Owners now get benefits at these local businesses. Just show them your owner card.
artemesia
Community Acupuncture & Wellness Center
296 Southland Drive
Lexington KY 40503
ph: 859 402-2430
http://www.artemesiaweb.com
special discounts – inquire with store
Bikram Yoga Studio of Lexington
185 Pasadena Dr
Lexington, KY 40503-2969
www.bikramyoga.com
10% off of any package
Dogtown LLC
Fun Doggy Day Care & Boarding
(859) 252-DOGS
www.dogtownlexington.com
10% off of services
Fred F. Moore Music Co.
443 S. Ashland Ave.
10% off merchandise
The Last Genuine Leather Company
460 Southland Drive
Lexington, KY 40503
(859) 253-3121
http://www.lastgenuineleather.net
10% off of items in store only
Lexington Children’s Theatre
418 West Short Street
Lexington, KY 40507
www.Lctonstage.org
discount on play tickets
Lexington Healing Arts Academy
272 Southland DriveLexington, KY 40503
859-252-5656
http://www.lexingtonhealingarts.com
10% discount on yoga classes (packages and drop-ins)The Living Arts & Science Center
362 N. Martin Luther King Blvd.
http://www.lasclex.org
$5 off membership and $5 off any adult class
The Morris Book Shop
408 Southland Drive
Lexington, KY 40503
www.morrisbookshop.com
10% off
Samara Anjelae
Samara Says Healing Center
509 Southland Drive
http://www.samarasays.com
(859) 749-8832
20% off spiritual readings, healing sessions and Reiki Workshops
Tarleton Tavern Farm
Beth Richardson
4333 Frankfort Road
Georgetown, KY 40324
502-682-3750
http://www.TarletonTavernFarm.com
10% off the price of a yearly CSA membership
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Patronage Refund
In profitable years the board may choose to issue a patronage rebate. The more you purchase, the greater the rebate.
10% Owner Discount Days
Owners receive 10% off one ONE ORDER during the quarterly 10% Owner Discount Days.
Reduced Tuition on Classes
Owners receive a discount on class fees. Our classroom is closed until our renovation is completed. Please stay tuned.
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Checks Over Amount of Purchase
Owners may receive up to $40 cash back over purchase amount.
Case Discounts Owners receive a 5% discount on special-ordered cases. |
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Join the Greater KY Credit Union
Owners are eligible to become members of the Greater KY Credit Union—a not-for-profit full service financial cooperative. For more information: 859-231-9300 or 800-432-7393.
Owner Reports
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Owner Reports keep owners up to date on Co-op news. Click here for most recent Owner Report. |
Have you moved? Changed name, phone or email?
Please let us know so we have accurate records and mailing information for you. You can update your information at the Customer Service Desk, email annm@goodfoods.coop or call 859 278-1813 ext. 244.
Rights & Responsibilities
The role of an owner of a co-op is very different from that of a member of a discount club, neighborhood association or other group. Becoming an owner of a co-op means accepting the rights and responsibilities of a business owner. If co-ops are to succeed, owners need to understand this fact and take their rights and responsibilities seriously.
Only the person who signs the original owner application form is an owner of the cooperative. Each owner may receive a shopper card for a family member, but all official business must is conducted with the owner. That means: only the owner may vote in elections (one vote per owner), patronage refund dividends will be made out to the owner and only the owner may request a share withdrawal. Owners must endorse patronage refund checks and sign for share withdrawals.
Owners are expected to be financially responsible
in dealings with the cooperative. Owners should
fulfill the obligation to fully purchase a share, within the time period allowed to avoid suspension of owner privileges.
OWNER RIGHTS
- Elect directors by voting in the annual election. Owners may vote in-store, by mail or at the annual owner meeting.
- Vote for changes in bylaw. The board of directors is responsible for periodically reviewing bylaws.
- Require the co-op to follow its bylaws.
- Review reports on financial performance at the annual meeting or in the newsletter.
- Run for the board of directors.
- Attend meetings of the board of directors (except for executive sessions). Board meetings are held the third Monday of each month from 7-9 p.m. in the Rochdale Room.
OWNER RESPONSIBILITIES
- Contribute to the co-op's capital—purchase your share in a timely manner.
- Patronize the co-op-give your business to YOUR business.
- Vote in elections and respond to surveys.
- Promote the co-op to others—tell your friends and neighbors about the co-op.
- Understand that the co-op is a business and must meet the needs of a business.
- Stay informed of what is happening at the co-op— read the owner report, e-newsletters and other mailings.
- Understand co-op principles and objectives—learn about cooperatives.
- Attend annual meetings.
- Inform the co-op of address changes and new email addresses to receive mailings and your patronage refund dividend.
- Complete on-line and in-store surveys. Your feedback is critical to your Co-op management's and Board of Directors' ability to serve you well.
If you no longer wish to be an owner:
Your owner share is fully refundable. We refund the share amount invested. Request for Termination of Ownership forms are available at the Customer Service Desk. Refunds will be made after replacement capital is provided when a new owner purchases a share. Any debt owed the co-op will be deducted from the refund.
2008 Patronage Rebate Explained
June 2009Dear Good Foods Owner,
The Good Foods Board of Directors is pleased to report that 2008 was a very successful year at our Co-op! Now it’s time to share some of this success with you through the patronage rebate, which is based on Good Foods net earnings arising from sales to owners from January 1, 2008 through December 31, 2008.
Good Foods total sales for the fiscal year ending December 31, 2008 were $9,164,186. Net income was $124,609. Sales to owners ($4,968,147) accounted for 54.2% of store sales, resulting in $67,554 available for patronage rebates. The Board's primary concern is to sustain and develop this thriving community resource. The Co-op is now starting the long-awaited expansion and aims to complete it before the end of 2009; when finished, it will extend the store into additional space adjacent to the Café and reconfigure the main store space. To invest in this project, the Board has decided to retain 80% ($54,043) of the declared patronage rebate.
The 80% retained this year will be credited to your individual owner account and will be returned to you when no longer needed for capital purposes as provided for in Section 9.4 of our Bylaws. The remaining 20% ($13,510) is now being paid out to Co-op owners who made purchases in 2008. Details of your distribution are on the patronage rebate stub. Please keep it for your records.
The patronage rebate is considered by the IRS to be a rebate on purchases of personal items, so it is not taxable income for individuals. Think of it as a deferred price reduction. If your purchases were for business purposes rather than personal use, consult your tax adviser.
Patronage rebates allocate back to our owners part of the Co-op's surplus earnings from the previous year and are calculated as a percentage of each owner's purchases (your patronage). Rebates can benefit owners in particularly profitable years, cushion co-op finances in lean years, and build owner equity investment when extra funds are needed for expansion or additional owner services. Rebates are also an important means provided by the Internal Revenue Code for member-owned cooperatives to reduce their taxable income.
Each year our Board determines how much should be returned to owners as cash and how much, if any, should be retained. By law at least 20% of the total allocation is paid out to individual owners; up to 80% can be retained as additional equity, to finance expansion and provide more owner services. When some percentage of the rebate pool is retained, you as co-op owners in effect jointly invest more money to grow your cooperative business and provide more of the services you want. Thus rebates benefit both you as individual owners and the co-op as a whole.
Your rebate is proportional to your purchases (the more you spend, the greater your rebate). This method of surplus income distribution distinguishes cooperatives from other types of corporations that distribute profit based on investment (where the more you invest, the greater your return), and is the foundation for making our Co-op a community asset whose real bottom line is service to you, the owners.
The Board of Directors is pleased to recognize the continued success of our cooperative through the distribution of this patronage rebate, one of the unique aspects of your cooperative ownership of Good Foods Co-op. Congratulations on owning such a thriving community business, and thank you for your continued support!
Claire Carpenter
Board President
board@goodfoods.coop
Patronage Rebate FAQ
Patronage Rebate -- 2008
Patronage rebates are a deferred price reduction on goods purchased. Refunds are proportional to purchases, so the more you spend, the greater your refund. Patronage rebates are not dividends of a return on investment; therefore, they are not considered taxable income.
Why did the Board retain 80% of the patronage?
Section 9.4 of our Bylaws states that “A portion of patronage rebates may be retained for the reasonable capital needs of the Co-op as determined by the Board.” Since we are expanding the store, the Board looked at the overall picture and decided to retain a portion of the patronage and use that money for the expansion.
Will I ever get the 80% of the patronage that was retained in 2006, 2007, and 2008?
YES! The board retained 80% of the 2006, 2007, and 2008 patronage rebates in preparation for the renovation. The retained portion of the patronage allows us to borrow $187,000 less from the bank for this year's expansion. The board will return the retained patronage at some future time, when they and the management team deem the Co-op's cash position and financial health strong enough for the disbursement. More than likely it will be distributed in increments over several years.
Why not keep the entire amount for the renovation? Why distribute 20%?
According to US law, at least 20% of each owner’s patronage rebate must be distributed in cash.
Can I donate my patronage rebate check back to Good Foods?
YES! Just endorse the check and drop it off at the customer service desk. The money will be donated to Good Foods Give Where You Live Program which supports local nonprofits.
How do I redeem my patronage rebate check?
You may deposit the check in your bank account, or if you choose, cash it at Good Foods.
Is there a time limit for redeeming my patronage rebate?
There is no time limit. Please cash the check as quickly as possible so we can reconcile our patronage account.
I resigned in 2008 and still received a patronage rebate. Why?
Resigned owners are entitled to receive a patronage rebate based on 2008 sales attributed to your owner number while you were an owner.
Other questions: Contact Ann Marx, Owner Services Manager, 278-1813 ext. 244 or annm@goodfoods.coop
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Board of Directors
Claire Carpenter, President
(859) 278-4966
claire@mail.uky.edu
Terri Fann, Vice President
(859) 536-6551
tfann@insightbb.com
Richard Stump, Treasurer
(859) 224-9548
richard.stump@insightbb.com
Kim Browning
(859) 296-9938
ksbrowning@windstream.net
Jim Embry
(859) 312-7024
embryjim@gmail.com
Doug Slaymaker, Secretary
(859) 381-9114
dslaym.coop@spamex.com
Andrew Stith
(859) 806-0700
addisonstith@uky.edu
Board Meetings
The Board of Directors meets the third Monday of each month in the
Community Room from 7-9 pm. Stay informed on the decisions the board
makes for the future of your business. Come see how the vision for the
future of your co-op is shaped.
2010 Board Meeting Dates
January 18
February 15
March 15
April 19
May 17
June 21
July 19
August 16
September 20
October 18
November 15
December 20
Board Meeting Synopsis
Synopsis of the 1/18/10 Board of Directors Meeting
At its January 18, 2010 meeting, the Good Foods Co-op Board of Directors:
- Reviewed a Compliance Report from the General Manager on Financial Planning and Budgeting.
- Continued to monitor the progress on the Expansion Project.
- Discussed further coordinating with DBK, the Co-op’s accounting firm, to ensure that the board will have confirmed financial figures for the owners at the Annual Owners Meeting April 25.
- Discussed with the Nominating Committee their work in finding candidates for the next openings in the Nominating Committee and the board.
- Discussed the role of the co-op in bringing about a more sustainable food system.
Synopsis of the 12/21/09 Board of Directors Meeting
At its December 21, 2009 meeting, the Good Foods Co-op Board of Directors:
- Adopted a new policy to give owners a thirty day period for input about any new proposed by-laws changes.
- Appointed Kim Browning to the board until the election next April to replace Karen Rignall who has moved away from the area.
- Continued to review the Expansion progress and the changing balance sheet.
- Considered a Nominations Committee proposal for a new evaluation form for board members finishing a term and who may run again.
Synopsis of the 11/1609 Board of Directors Meeting
At its meeting on November 16, 2009, the Good Foods Co-op Board of Directors:
- Accepted Compliance Reports from the General Manager on Financial Condition, Asset Protection, and the Expansion.
- Discussed working with the co-op’s accounting firm to be able to get information on a timely basis to make a decision about the next patronage rebate.
- Reviewed its polices on Board-General Manager Relationship and its own budget.
- Began work on a new policy to give owners more opportunity to learn about and comment on proposed bylaws changes.
- Renewed its contract with CBLD, and co-op consulting service which helps guide the board in its actions.
Synopsis of the 10/19/09 Board of Directors Meeting
At its October 19, 2009 meeting, the Good Foods Co-op Board of Directors:
- Accepted a Compliance Report from the General Manager on the Expansion Project.
- Accepted a Compliance Report from the Board President on GM-Board Relationship.
- Reviewed and made no changes to its Governance Policy on Staff Treatment.
- Further educated itself on the changes to the balance sheet in the future as a result of the expansion project.
- Accepted a Review of the co-op’s financial condition by the co-op’s accounting firm, Dulworth, Breeding, and Karns.
- Accepted an umbrella Vision Statement for its work: We envision an inclusive community dedicated to co-op values, continuous learning, and a sustainable world.
- Looked at ideas to help carry out the above statement.
- Proposed the idea of surveying the owners’ interest in a film festival of films focusing on food and sustainability.
Synopsis of the 9/21/09 Board of Directors Meeting
At its September 21, 2009 meeting, the Good Foods Co-op Board of Directors:
- Approved of reports from the General Manager on policies about Staff Treatment and the current Expansion.
- Discussed its annual agenda planning.
- Made plans for showing of films about food and sustainability after the new Rochdale Room is finished.
- Established tentative dates for the next Annual Owners Meeting and the board’s next retreat.
- Had a stimulating discussion with Angela Caporelli from the Kentucky Department of Agriculture about how the co-op can work on sustainability.
Synopsis of the 8/17/09 Board of Directors Meeting
At its August 17, 2009 meeting, the Good Foods Co-op Board of Directors:
- Accepted Compliance Reports from the General Manager on its Policies regarding Treatment of Consumers, Financial Condition and Activities, Asset Protection, and Expansions.
- Studied further the effects of the current expansion project on the co-op’s balance sheet.
- Reviewed its policies on treatment of consumers and treatment of owners, considering whether or not these needed to be revised or combined into one policy. For now, these policies will stay as they are.
- Elected board member Richard Stump as Treasurer of the board.
- Discussed further the issue of sustainability as it relates the the co-op.
Synopsis of the 7/20/09 Board of Directors Meeting
At its July 20, 2009 meeting, the Good Foods Co-op Board of Directors:
Reviewed and accepted a monthly update on the Expansion Project.
Monitored Compliance Reports from the General Manager on Treatment of Consumers and Treatment of Owners.
Educated themselves on the co-op’s balance sheet and committed to monitoring its changes through the Expansion Project.
Began a discussion about the idea of beginning the voting for new board members at the Annual Owners Meeting (AOM) instead of concluding the voting at the AOM.
Worked more on organizing its ongoing study of sustainability.
Synopsis of the 6/15/09 Board of Directors Meeting
At its June 15, 2009 meeting, the Good Foods Co-op Board of Directors:
- Accepted Compliance Reports from the General Manager on Compensation and Benefits and the expansion project.
- Formally approved a plan worked out in Executive Session on June 1 to proceed with the expansion project.
- Reviewed various attorney documents relating to the expansion project. Approved an extra expenditure for floor tile for the expansion project.
- Approved the contract for the board’s legal counsel.
- Formally adopted a major question for long-term study: “How can the co-op help grow a sustainable food system?”
- Agreed on having speakers at future meetings and other activities to further the board’s learning about sustainability.
- Rescheduled the Revisioning Task Force meeting for June 29 to follow up on work done at the May board retreat.
Synopsis of the 5/18/09 Good Foods Co-op Board Meeting
- At the May 18, 2009 meeting, the Good Foods Board of Directors:
- Monitored compliance reports from the General Manager on Expansion, Financial Condition, and Asset Protection.
- Agreed on a need for a governance policy on patronage rebates.
- Reviewed the Annual Owners Meeting.Made final plans for the Board’s retreat on May 23.
- Discussed the contract for the Board’s attorney.
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Synopsis of the 4/20/09 Good Foods Co-op Board Meeting
At the April meeting, the Board of Directors:
- Reviewed the policies on Expansion and Communication & Support to the board.
- Decided on Monica McFarlen as legal counsel to the board over a number of other well-qualified candidates.
- Approved as in compliance the General Manger’s report on the Ends Policy.
- Approved the recommendation from the General Manager to retain 80% of the patronage rebate for funding the expansion project.
- Finalized plans for the Annual Owners Meeting.
- Worked on plans for a day-long retreat on May 23 at the Terrapin Hill organic farm.
- Made plans for an orientation session for the two new members who will be elected on April 26.
Synopsis of the 3/16/09 Good Foods Coop Board Meeting
At the March meeting, the Board of Directors:
- Approved the President’s compliance report on IV (Board Process) in the Governance Policy.
- Approved the GM’s monthly update on the expansion process.
- Accepted the decision to renew the GM’s contract effective July 1.
- Accepted the decision to award the GM a bonus and raise, effective July 1.
- Accepted the GM’s compliance report on II.V (Emergency GM Succession) in the Governance Policy.
- Received, but did not discuss or accept, the GM’s compliance report on section B.1 of Ends in the Governance Policy.
- Reviewed but made no changes to II.F (Financial Planning and Budgeting) in the Governance Policy.
- Reviewed and made minor changes to II.J (Expansion) in the Governance Policy.
- Approved a proposed bylaw change to be presented to owners at the upcoming Annual Ownership Meeting.
- Worked to finalize plans for the AOM.
- Agreed to have a booth at the GFC on April 18th.
- Agreed to Marshall Kovitch’s recommendations regarding the confidentiality of contracts, pro formas, etc.
- Continued to plan for the board retreat on May 23rd.
- Agreed to a proposed format for discussion of readings.
Synopsis of the 2/16/09 Good Foods Coop Board Meeting
At the February meeting, the Board of Directors:
- Officially approved the GM’s compliance report on section II.F (Financial Planning and Budgeting) in the Governance Policy.
- Accepted the GM’s compliance report on Accomplishment of Ends in 2008 with the exception of section B1, which the GM will report on in March.
- Approved an RFP for legal counsel which they will publish in the local Fayette county law publication.
- Continued to work on their revision of the board member Code of Conduct.
- Accepted the GM’s compliance report on section II.D ((Financial Condition and Activities) in the Governance Policy.
- Accepted the GM’s compliance report on section II.D (Asset Protection) in the Governance Policy.
- Accepted the GM’s compliance report on II.J (Expansion) in the Governance Policy.
- Scheduled a special meeting at which the Board will consider the final expansion plan for Monday, March 30th at 7:30 pm.
- Finalized the agenda for the upcoming Annual Ownership Meeting (AOM), which will be included in the upcoming newsletter.
- Approved the wording for an owner survey, which the GM will set up on SurveyMonkey.
- Agreed to put out a petition in the store and send out information via email regarding upcoming legislation.
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Synopsis of the 1/19/09 Good Foods Co-op Board Meeting
At the January meeting, the Board of Directors:
- Extended the deadline for the GM’s compliance report on Ends until the February board meeting to allow for owner input.
- Reviewed again the GM’s compliance report on II.F (Financial Planning and Budgeting) in the Governance Policy , including the Business Plan for 2009 but did not officially approve it pending a revision of the Business Plan for clarity.Postponed discussion of possible revisions to II.F (Financial Planning and Budgeting) in the Governance Policy until the February board meeting.
- Revised III.D (General Manager Contract, Evaluation, and Compensation) to reflect the new compensation plan.
Agreed to post the RFP for legal counsel in several places, including the newsletter and an owner email. - Reviewed but did not revise the current board member Code of Conduct to address issues raised by staff serving on the board.
Continued planning for the Slow Food Forum the GFC will host on January 25th. - Approved the board’s February letter to owners and a response to repeated letters from a concerned owner.
- Made a minor revision to II.B (Treatment of Owners).
- Formed a Re-visioning Task Group to develop a survey and survey questions to include owners in the board’s re-visioning of the GFC Ends policy.
- Scheduled a special executive session for Thursday, February 26th at 7 pm to discuss both GM and board performance in 2008.
Synopsis of the 12/15/08 Good Foods Coop Board Meeting
At the December meeting, the Board of Directors:
- Gave their final approval to a new plan for calculating GM compensation.
- Reviewed the GM’s compliance report on II.F (Financial Planning and Budgeting) in the Governance Policy but did not approve it due to lack of documentation.
- Received a draft of the GFC’s new Business Plan Development Outline from the GM.Reviewed but made no changes to II.D (Finances) and II.E (Asset Protection) in the Governance Policy.
- Agreed to solicit expert advice in framing the current economic situation and helping develop projections for the future.
- Agreed to draft changes to III.D (Board Calendar) to bring this policy in line with the new GM compensation plan.Agreed to draft an RFP with the goal of having a lawyer “on tap” for the board should legal problems arise.
- Discussed but decided against possible changes to the bylaws to keep staff from serving on the board. The board will instead address its specific concerns with future changes to the board members’ Code of Conduct.
- Continued planning for the Slow Food Forum the GFC will host on January 25th
- Approved the board’s January letter to owners.Heard how bounced emails to the board are being addressed
- Continued its discussion of possible changes to the Ends.
- Worked to finalize the topics of discussion at the upcoming board retreat (January 10).
- Approved the GM’s compliance report on II.J (Expansion) in the Governance Policy.
Synopsis of the 11/17/088 Good Foods Coop Board Meeting
- Accepted the GM’s compliance reports on II.D (Financial Condition and Activities) and II.E (Asset Protection) in the Governance Policy, as submitted.
- Approved a minor change to II.E (Asset Protection) in the Governance Policy.
- Approved a minor change to IV. B (Cost of Governance) in the Governance Policy.
- Approved, in principle, a new plan for calculating GM compensation.
- Discussed a possible addition to the Board Member’s Code of Conduct regarding how a board member should discuss his/her dissenting opinion to owners.
- Reviewed, but made no changes to, II.C (Staff Treatment) in the Governance Policy.
- Finalized the topic for the January 10th board retreat.
- Agreed to draft an RFP (Request for Proposal) for a lawyer to have “on tap” should the board need legal advice.
- Accepted the GM’s compliance report on II.J (Expansion) in the Governance Policy as submitted, with the understanding that various financial scenarios will be addressed in the final report.
- Scheduled a panel discussion of the recent Terra Madre conference in Italy for January 25th, from 7 – 9 pm.
- Agreed to draft a letter from the board to the Salvation Army explaining why that organization is unlikely to be chosen as a recipient of “Give Where You Live” in the future.
At the November meeting, the Board of Directors:
Synopsis of the 10/20/08 Good Foods Coop Board Meeting
At the October meeting, the Board of Directors:
- Briefly discussed the issue of a potential change in the bylaws regarding employees serving on the board but made no decision except to keep it a part of their active discussion.
- Officially dissolved the Owner Linkage Task Group due to total lack of owner participation.
- Engaged in an extensive discussion about possible changes to the Ends section of the Governance Policy.
- Discussed proposed changes to section IV.B (Cost of Governance) in the Governance Policy but made no final decision.
- Accepted the GM’s revised compliance report on section II.C (Staff Treatment) in the Governance Policy, as submitted.
- Accepted the Board President’s compliance report on section III (Board – GM Relations) in the Governance Policy, as submitted.
- Approved a minor revision to section II.J (Expansion) in the Governance Policy.
- Briefly discussed the possible legal implications of the potential conflict of interest with spouses serving on the board at the same time.
Synopsis of the 9/22/08 Good Foods Coop Board Meeting
At the September meeting, the Board of Directors:
- Approved the RFP on GM compensation and asked for the GM’s final approval.
- Agreed to discuss overall owners' responses on the SurveyMonkey survey at the October board meeting.
- Continued its planning of the Annual Agenda and tentatively scheduled several owner forums for the coming year.
- Agreed to allow the GM to resurvey staff for her compliance report on II.C (Staff Treatment) to enable her to obtain more accurate results. She will present her revised report for the October board meeting.
- Reviewed, but made no changes to, Section II.D (Financial Condition and Activities) in the Governance Policy.
- Reviewed and made several changes to section II.D (Asset Protection) in the Governance Policy. They will make final approval of these changes at the October board meeting.
- Discussed possible topics for the upcoming board retreat.
- Discussed the process that the board will use to review the GM’s official expansion proposal (expected by November).
- Reviewed previous changes made to section II.B (Cost of Governance) in the Governance Policy and proposed further changes (to be approved at the October meeting.
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Synopsis of the 8/18/08 Good Foods Co-op Board Meeting
- Selected Geoff Young to fill the board seat left vacant by Jim Shahan's resignation.
- Approved a small change to the staff director policy.
- Approved an updated memo on Board Owner Linkage/General Manager relations.
- Accepted the GM's compliance report on sections II.D (Financial Condition and Activities) and II.E (Asset Protection) in the Governance Policy as submitted.
- Accepted the GM's compliance report on section II.J (Expansion) in the Governance Policy as submitted.
- Discussed how to record board members' dissenting opinions while maintaining "one voice" as mandated in the Governance Policy.
- Worked on setting its Annual Agenda for August 2008--April 2009.
- Reviewed, but made no changes to, section II.H (Compensation and Benefits) in the Governance Policy.
- Reviewed but made no changes to, section II.A (Treatment of Consumers) in the Governance Policy.
- Reviewed, but made no changes to, section II.B (Treatment of Owners) in the Governance Policy.
- Accepted the revised mandates for the New Media/Owner Linkage and Local Food Systems task groups.
- Discussed ways the GFC can assist Jim Embry in his efforts to raise funds to pay for his upcoming trip for Italy to participate in the international Terra Madre (Slow Food) conference.
At the August board meeting, the Board of Directors:
Synopsis of the 7/21/08 Good Foods Co-op Board Meeting
- Accepted the GM’s compliance report on section II.A (Treatment of Consumers) in the Governance Policy as submitted.
- Accepted the GM’s compliance report on section II.B (Treatment of Owners) in the Governance Policy with a slight change in wording and a plan for correction of a non-compliant section.
- Accepted the GM’s update on section II.J (Expansion) in the Governance Policy as submitted.
- Agreed upon talking points for the upcoming owners’ forum.
- Discussed how to coordinate the bi-monthly paper newsletters and the monthly emails from the board to better communicate with owners.
- Agreed that board communication to the GM goes through the board president, and that the GM will communicate the board’s communications with appropriate staff persons.
- Agreed to revise the mandate for the combined New Media and Owner Linkage Task Groups.
- Reviewed what they have learned about local food systems, what more they want to know and how they can share what they have learned with owners.
- Received two suggestions from the Nominating Committee of possible candidates for appointment to the board (to fill the seat created by Jim Shahan’s resignation). The seat will be filled at the August board meeting.
- Discussed the possibility of changing the bylaws to bar staff from serving on the board due to a potential conflict of interest. Agreed to talk to Marilyn Scholl (CDS) about this and resume discussion at the August meeting.
- Approved the new policy on Staff Involvement in Elections with a minor modification.
- Approved the new policy on Staff Directors.
- Approved the new policy on Staff Treatment.
- Reviewed but made no additions to the proposed staff survey.
- Approved a special board meeting on the expansion proposal, with date to be set with as much advanced notice as possible.
- Thanked Steve Kay for his excellent facilitation skills during a difficult time.
At the July meeting, the Board of Directors:
Synopsis of the 6/15/08 Good Foods Co-op Board Meeting
- Accepted the GM’s compliance report on section II.H (Compensation and Benefits) in the Governance Policy as submitted.
- Accepted the GM’s update on section II.J (Expansion) in the Governance Policy as submitted.
- Approved the GM’s special request for an expenditure over $20k for a new POS system.
- Agreed that the NomCom should fill its current vacancies by appointing members as outlined in section 4.2 in the Bylaws.
- Discussed the possibility of extending the board’s contract with CBLD to allow monthly phone chats.
- Reviewed and made extensive changes to section IV (Board Process) in the Governance Policy.
- Discussed ways to improve timely communication with owners.
- Agreed to merge the New Media and Owner Linkage Task Groups due to limited membership.
- Agreed that owners and potential owners can serve on task groups.
- Agreed to develop policy explicitly stating the board’s role in selecting store booth/email issues.
- Agreed to hold an owner forum on October 16th in conjunction with a planned event featuring Mark Winne.
- Welcomed a speaker from the Community Farm Alliance (CFA) as part of the board’s ongoing education on local food systems.
- Agreed to renumber section II.J (Expansion) of the Governance Policy to make it consistent with the rest of the policy.
- Received letters from two owners, one regarding how store booth/email issues are chosen and one with specific questions regarding the removal of Moya Hallstein from the board.
At the June meeting, the Board of Directors:
Synopsis of the 5/19/08 Good Foods Co-op Board Meeting
At the May meeting, the Board of Directors:
- Announced that Moya Hallstein has been removed from the board of directors due to conflict of interest. The board selected Jim Shahan to fill the vacant position until next year’s elections.
- Accepted the GM’s compliance report on section II.J (Expansion) in the Governance Policy as submitted.
- Accepted the GM’s compliance reports on sections II. D (Finances) and E (Assets) in the Governance Policy as submitted.
- Agreed to review and possibly change section IV (Board Process) in the Governance Policy at the June board meeting.
- Reviewed the Policy Governance model in general, and agreed to hold a board training on Policy Governance on Monday, June 9th.
- Began working on a policy which would address staff members serving on the board of directors.
- Approved the GM’s suggestion that the Board of Directors withhold 80% of the patronage rebate this year and return 20% to the owners immediately.
- Clarified some of the details regarding new task groups.
- Agreed to invite a speaker from the Community Farm Alliance (CFA) to speak at the June board meeting.
Board Governance Policies
July 2008
Table of Contents
I. Ends 2
II. Executive Limitations 3
A. Treatment of Consumers 4
B. Treatment of Owners 5
C. Staff Treatment 6
D. Financial Condition and Activities 7
E. Asset Protection 8
F. Financial Planning and Budgeting 9
G. Emergency General Manager Succession 10
H. Compensation and Benefits 11
I. Communication and Support to the Board 12
J. Expansion Policy 13
III. Board – General Manager Relationship 16
A. General Manager Job 16
B. Delegation to the General Manager 16
C. Monitoring General Manager Performance 17
D. General Manager Contract, Evaluation, and Compensation 19
IV. Board Process 20
A. Responsibility to Owners 21
B. Cost of Governance 22
C. Board Job 23
D. Governance Style 25
E. Annual Agenda Planning 26
F. President’s Role 27
G. Board Meetings 28
H. Board Members’ Code of Conduct 29
I. Policy on Self-Perpetuation 31
J. Task Groups 32
I. Ends
For
the cost of an ownership share in the Good Foods Co-op, many different
types of people in the region enjoy well-being, community, and control
of a vibrant cooperative business.
A. Well-being
1. People are knowledgeable about healthy lifestyle choices.
2. People enjoy nutritional health.
3. People have a safe food supply that meets standards based on the precautionary principle.
B. Community
1. People from diverse parts of the community are connected in meaningful ways through the Co-op.
2.
People have opportunities, individually and jointly, to support
environmental sustainability and contribute to the larger community
through the Co-op.
3. People support local farmers and producers through the Co-op.
C. Control
1. People appreciate the advantages of the cooperative form of business.
2. People have a meaningful say about the future direction of the Co-op.
3. People exercise democratic control of a cooperative business through voting.
II. Executive Limitations*
The
General Manager (GM) shall not cause or allow any practice, activities,
decisions or organizational circumstances that are unlawful, imprudent,
or in violation of commonly accepted business and professional ethics
and practices.
A. Treatment of Consumers*
With
respect to interactions with consumers, the GM shall not cause or allow
conditions, procedures, or decisions, which are unsafe, undignified,
unfair, or unnecessarily intrusive.
Further, he or she shall not:
1.
Use methods of collecting, reviewing, transmitting, or storing client
information that fail to protect against improper access to the
information elicited.
2. Fail to operate facilities with appropriate accessibility.
3. Fail to ensure that consumer concerns are responded to fairly, consistently, respectfully, and in a timely manner.
B. Treatment of Owners*
With
respect to the treatment of owners, the General Manager shall not cause
or allow actions or decisions that are unfair, unnecessarily intrusive,
that fail to provide appropriate confidentiality, or that fail to
provide timely information.
Accordingly, he or she shall not:
1. Fail to provide fair, equitable and timely processing of ownership applications.
2. Fail to ensure that current owners receive adequate and timely communications about owner events, benefits and services.
3.
Use methods of collecting, reviewing, transmitting, or storing owner
information that are inaccurate or fail to protect against improper
access to, use of, or disposal of the information elicited. Further, he
or she shall not:
a. Sell or share the ownership list
b. Disclose the identity of owner-lenders
4. Fail to ensure that owner concerns are responded to fairly, consistently, respectfully, and in a timely manner.
C. Staff Treatment*
With
respect to treatment of staff, the General Manager may not cause or
allow conditions that are unfair, undignified, unsafe, unclear, or
disorganized.
Further, he or she shall not
1. Operate without written personnel policies which:
a. Clarify rules for staff
b.
Provide clear, effective handling of grievances, as well as an appeals
process that does not leave the final decision up to the GM or Board
c. Protect against wrongful conditions such as grossly preferential treatment for personal reasons
d. Are accessible to all employees
2. Apply staff employment policies inconsistently or unfairly
3. Leave staff unacquainted with the GM’s interpretations of their protections under this policy
4.
Discriminate against any staff member for non-disruptive expressions of
dissent, or in the case of staff who are also Board or Nominating
Committee members or candidates, for positions or actions taken as
owners who are running for or serving on the Board or the Nominating
Committee.
5. Allow staff to be unsurveyed to offer annual
feedback on significant aspects of work conditions, supervisory staff
and administrative staff. The survey should assure anonymity for those
who complete it, yet allow for survey-to-survey comparison. The Board
of Directors may review the survey and provide input to assure that
monitoring needs are met, up to three months before a compliance report
on this Staff Treatment policy is due.
6. Leave staff unfamiliar with the board’s governance policies.
7. Allow staff to be untrained or unprepared to deal with emergency situation.
D. Financial Condition and Activities*
With
respect to the actual, ongoing financial condition and activities, the
General Manager shall not cause or allow the development of fiscal
jeopardy or a material deviation of actual expenditures from board
priorities established in Ends policies.
Further, he or she shall not:
1.
Expend more funds than have been received in the fiscal year to date
unless the shortfall is derived from a multiyear plan.
2. Fail to settle payroll and debts in a timely manner.
3. Fail to observe all the terms of any lease or other similar contract.
4. Allow tax payments or other government-ordered payments or filings to be overdue or inaccurately filed.
5.
Make a single capital purchase or commitment of greater than $20,000.
Splitting orders to avoid this limit is not acceptable.
6. Acquire, encumber, or dispose of real property.
E. Asset Protection*
The General Manager shall not cause or allow the assets to be unprotected, inadequately maintained, or unnecessarily risked.
Further, he or she shall not:
1.
Fail to insure against theft and casualty losses to at least 80 percent
of replacement value and against liability losses to board members,
staff or the organization itself in an amount average for comparable
organizations.
2. Subject facilities and equipment to improper wear and tear or insufficient maintenance.
3. Unnecessarily expose the organization, its board or staff to claims of liability.
4.
Make any purchase: a) wherein normally prudent protection has not been
given against conflict of interest; b) of over $1,500 without having
obtained comparative prices and quality; or c)of over $10,000 without a
stringent method of assuring the balance of long term cost and quality.
Orders shall not be split to avoid these criteria.
5. Fail to protect intellectual property, information, and files from loss or significant damage.
6. Receive, process, or disburse funds under controls that are insufficient to meet the board appointed auditor’s standards.
7. Bias or impair the independence of the board’s audit or other external monitoring or advice.
8.
Invest or hold operating capital in insecure instruments, including
uninsured checking accounts and bonds of less than AA rating, or in
non-interest bearing accounts except where necessary to facilitate ease
in operational transactions.
9. Endanger the organization’s public image or credibility, or its ability to accomplish Ends.
10. Change the organizations name or substantially alter its identity in the community.
F. Financial Planning and Budgeting*
The
General Manager shall not cause or allow financial planning for any
fiscal year or the remaining part of any fiscal year to deviate
materially from the board’s Ends priorities, risk fiscal jeopardy, or
fail to be derived from a multiyear plan of at least five years.
Further, he or she shall not plan in a manner that:
1.
Risks incurring those situations or conditions described as
unacceptable in the board’s policy “Financial Condition and Activities”.
2.
Omits credible projection of revenues and expenses, separation or
capital and operational items, cash flow, and disclosure of planning
assumptions.
3. Provides less for board expenditures during the year than is set forth in the Cost of Governance policy.
G. Emergency General Manager Succession*
In
order to protect the board from the sudden loss of General Manager
services, the GM shall not permit fewer than two other managers to be
sufficiently familiar with board and GM issues and processes to enable
either to take over with reasonable proficiency as an interim successor.
H. Compensation and Benefits*
With
respect to employment, compensation, and benefits to employees,
consultants, contract workers, and volunteers, the General Manager
shall not cause or allow jeopardy to fiscal integrity or public image.
Further, he or she shall not:
1.
Change GM’s own compensation and benefits, except as his or her
benefits are consistent with a package for all other employees.
2. Promise or imply permanent or guaranteed employment.
3.
Establish current compensation and benefits that deviate materially
from the geographic or professional market for the skills employed.
4.
Create obligations over a longer term than revenues can be safely
projected, in no event longer than one year, and in all events subject
to losses in revenue.
I. Communication and Support to the Board*
The General Manager shall not permit the board to be uninformed or unsupported in its work.
Further, he or she shall not:
1.
Fail to submit monitoring data required by the board (see policy on
Monitoring GM Performance) in a timely, accurate and understandable
fashion, directly addressing provisions of the board policies being
monitored, and including GM interpretations as well as relevant data.
2.
Fail to submit unbiased decision information required periodically by
the board or let the board be unaware of relevant trends.
3.
Let the board be unaware of any significant incidental information it
requires, including anticipated adverse media coverage, threatened or
pending lawsuits, material external and internal changes, particularly
changes in the assumptions upon which any board policy has previously
been established.
4. Fail to advise the board, if in the GM’s
opinion, the board is not in compliance with its own policies on
Board-GM Relationship and Board Process, particularly in the case of
board behavior that is detrimental to the work relationship between the
board and the GM.
5. Present information in unnecessarily
complex or lengthy form or in a form that fails to differentiate among
information of three types: monitoring, decisions preparations, and
other.
6. Fail to provide reasonable administrative support for the board’s work.
7.
Fail, when addressing official business, to deal with the board as a
whole except when a) fulfilling individual requests for information or
b) responding to officers or committees duly charged by the board.
8. Fail to report in a timely manner an actual or anticipated noncompliance with any policy of the board.
9.
Allow staff or management involvement in Board related issues as owners
to become confused with their roles as employees of the Co-op.
a.
Allow management or staff to use Co-op resources to promote or oppose
the candidacy of perspective or incumbent board members.
b. Allow
management or staff, in their role as employees or the Co-op, to
promote or oppose individual Board or Nominating Committee candidates
or sitting members.
10. Fail to support the Board in the planning and execution of the Annual Owner Meeting and Board Elections.
J. Expansion Policy*
The
General Manager shall not fail to ensure the following in planning and
implementing the cooperative’s expansion to better fulfill its mission.
1.
Planning and Research - will include sufficient, professional planning
and research on all aspects of the project including financial
assumptions, market data, and location analysis. The manager is
authorized to prudently invest up to $20,000 in planning and research.
2.
Site Selection - The co-op will not give preference to a site which
does not have the potential to attract new members, and enough
customers to successfully support its operations. More specifically:
a. Selected site will have good parking access. In addition, sites with good access to transportation are preferred.
b.
Selected site must show strong promise for being developed into a store
with a lay-out, product selection, overall ambience, and sense of
community, which will put us in a strong competitive position vis a vis
our members.
c. Selected site must have enough space for on site management office.
d. The new store will include meeting/education space as is economically feasible.
e. Project must meet all applicable zoning requirements.
f. The selected site will have the potential to develop a store which fosters a sense of community.
g. The selected site will not have any environmental liability issues, which are not resolvable within the project budget.
3. Cost – Project cost for the project will not increase debt to equity ration to above 3:5 initially and for the first year:
a. Realistic projections must show a debt to equity ratio of 2:1 within 24 months after completion of project.
b. Only licensed contractors with successful track records doing similar size and similar type of projects may be used.
c. Total project cost must be based on a budget that includes a contingency of at least 10%.
4.
Financing – Owner financing, financial institution loans, vendor
credit, equipment leasing and landlord financing will not be used in
combination other than that which is most economical in the long term
for owners including considerations of cost of financing, cost of
obtaining financing, and tax implications.
a. Financing
must be realistically projected and must be reviewed by an external
person with experience in managing a project of this scale
i. Project budget and financing plan must include a contingency of at least 10% of the total project cost.
b.
Project may not rely on an increase of member equity greater than 100%
without a detailed, realistic plan for achieving the increase.
5.
Profit and cash flow – The expansion plans may not fail to project
profitability of 1% sales for the third year, 1.5% by the fourth year
of operation, and 2% by the fifth year.
a. If expansion is a
project greater than $500,000, pro formas must be based on a
professionally-prepared market study, performed by consultants with a
track record of success in projecting natural food grocery sales.
b.
Conservative cash projections shall not fail to clearly demonstrate the
ability to pay off all finance sources as contracted.
c. Conservative projections shall not show the current ratio falling below 1:20 at any time during the project.
d. Projections must be prepared for income statement, cash flow, and balance sheet for the 5 years following the project.
6. Timing and approval – The manager may not enter into debt to finance the project without the board’s approval.
a. The manager may not enter into a lease or site purchase agreement without a commitment on financing and board approval.
b. The manager may not cause or allow construction or demolition to occur prior to closing of financing.
c. The manager may not proceed with the project without a board decision on the total project cost and sources and uses plan.
7. Capacity – The project may not exceed the co-ops capacity to operate the new store successfully.
a.
Management, marketing, operational systems, accounting, and
organization capacity must all be analyzed and enhanced to ensure they
meet the new capacity requirements.
8. Environmental
implications – The expansion project shall not fail to endeavor to
minimize the impact of our operation on the environment.
a.
Other things being equal, when choices are made that will affect
resource use (e.g. energy, land), the more resource efficient choice
will be preferred.
b. When there is a cost difference, a more environmental choice is preferred if the cost difference is less than 10%.
9.
Viability – The co-op must not fail to be responsive in product
selection, pricing, and service levels to ensure sufficient levels of
gross sales and net profit.
a. Market forces that could
affect the success of the store must be monitored and responded to.
These forces include new food stores in our trade area, formal changes
in existing food stores in our trade area, economic trends in our trade
area, and traffic patterns in immediate vicinity.
10.
Communication – The General Manager shall not fail to advise the board
of significant progress toward the expansion including quarterly
revisions of time and “sources and uses” projections, and general
updates monthly.
11. Interim Priorities – During the
planning time for relocation, the manager may not fail to maintain
profitability in the current store operations, nor fail to maintain
staff morale, nor fail to build an effective and resilient management
team.
This policy will be monitored quarterly by internal report in May, August, November, and February.
III. Board – General Manager Relationship*
A. General Manager Job
As
the board’s single official link to the Co-op operation, the General
Manager is accountable for Co-op performance and exercises all
authority delegated by the board. The General Manager shall be
responsible for performance and integration of all aspects of the
business. Consequently, the specific value of the General Manager’s job
lies in two areas:
1) Accomplishment of the board policies on Ends; and
2)
Operation of the Co-op within the boundaries of prudence and ethics
established in board policies on Executive Limitations.
B. Delegation to the General Manager
The
board focuses on general, high-level policies, and hereby delegates
lower-level policies, means and specific decisions to the GM. The GM is
authorized to establish all further policies, make all decisions, take
all actions and develop all activities that are true to the board’s
policies. The following understandings apply:
1. The board
may, by extending its policies, “un-delegate” areas of the GM’s
authority, but will respect the GM’s decisions as long as the
delegation is in effect. The board shall obtain information about and
monitor progress in areas that have been delegated.
2. The
board as a whole relates to staff only through the General Manager. The
only exception is that the board assigns tasks directly to the Board
Administrative Assistant, and contributes to his/her evaluation through
the GM.
3. Only the board, acting as a body during a board meeting, has authority over the GM.
4.
An individual board member has such authority only when specifically
delegated to that individual for a certain limited purpose by the board
as a whole.
5. A board member, officer, board committee or task group may request but not require information from the GM.
C. Monitoring General Manager Performance*
The
Board shall track General Manager performance by monitoring in such a
way as to have systematic assurance of policy compliance. Accordingly,
the Board shall carry out its monitoring in a relatively automatic way,
by way of scheduled reports to be read and studied outside of meetings;
board meetings shall focus on mentoring only when performance is
reported to be out of compliance or when a monitoring policy is up for
annual review.
1. The board shall monitor aspects of Co-op performance which it has addressed in explicit statements of policy.
2.
Since the board speaks to the GM through Ends policies and Executive
Limitations policies, monitoring methods shall be established to
observe whether Ends are being achieved and limitations are being
overstepped.
3. The board shall ask the GM to provide
preliminary statements under headings of interpretation or Operational
Meaning, Measurement, and Rationale, and data demonstrating compliance
in each area being reported. If the data are unchanged from one report
to the next, the GM shall be asked to note this with reference to the
month and year of the previous report. Board monitoring assures that
the data provided support a reasonable interpretation and actually
demonstrate compliance. If a report is out of compliance, the GM should
include an estimate of the degree of severity and any ramifications
that might be of concern. If the board finds any element of a report
out of compliance, it shall ask for follow-up reports at reasonable
intervals until the GM submits a report documenting compliance.
4. Monitoring methods include the following:
a. Internal reports – periodic reports from the GM or the President of the Board;
b.
External judges – auditors, site inspectors, or other external
assessors who will be retained to answer certain monitoring questions;
c.
Direct inspection – Directors may be assigned to monitor certain
policies; the directors involved will have only the authority to state
whether, in their opinions, the policy is being implemented;
d. Surveys of owners, shoppers, or staff; and
e. Other methods as appropriate.
5.
Each policy in “Ends” and “Executive Limitations” shall be classified
by the board according to the frequency and method of monitoring.
Reports shall be submitted by the GM during different months of the
year. The board shall bring its annual review of each policy in the
month after the compliance report is due from the GM; any changes will
be completed within 60 days of the GM’s report.
Annual Compliance Report Schedule*
I. ENDS Internal Annual: Jan.
II. GENERAL MANAGER BOUNDARIES
A. Treatment of Consumers Internal Annual: July
B. Treatment of Owners Internal Annual: July
C. Staff Treatment Internal Annual: Sept.
D. Financial Condition and Internal Qtrly: Feb, May,
Activities Aug, Nov
E. Asset Protection Internal Qtrly: Feb, May
Aug, Nov
Insurance Coverage Internal Annual: August
Audit/Review External Annual: May
F. Financial Planning and Internal Annual: Dec
Budgeting
G. Emergency GM Succession Internal Annual: March
H. Compensation and Benefits Internal Annual: June
I. Communication and Support Internal Annual: April
To the Board
J. Expansion Policy Internal Qtrly: Feb, May,
Aug, Nov
III. BOARD/GM RELATIONSHIP President Annual: Oct.
IV. BOARD PROCESS President Annual: March
D. General Manager Contract, Evaluation, and Compensation*
1.
The annual contract with the General Manager shall run from July 1
through June 30. General Manager performance shall be evaluated after
the close of the performance year.
2. In January, the board
will review the GM’s report on Ends policy compliance for the previous
year. The President shall see that a tally of GM compliance reports
relating to the previous year is compiled (including the January Ends
report).
3. In February, the board shall meet with the GM to review the past year and plan for appropriate professional development.
4.
In March of each year, the board will consider whether to renew the
annual contract with the GM, and shall notify the GM of its intent to
renew at least 60 days before the beginning of a new contract on July
1.
5. In April, the board shall determine whether to adjust
the GM’s salary. Factors that the board shall consider include any
enhanced managerial skills the GM has developed or demonstrated during
the preceding 12-month period (April 1 – March 31), changes in the cost
of living, and the employment market for general managers. The board
shall also approve any changes needed in the contract document.
6.
In early October, the board shall confer with the GM to review the
preceding 12-month period (November 1 – October 31) and brainstorm
priority policies for the upcoming year.
7. In October, the
board shall also identify ends and boundaries policies that are of
particular importance for the upcoming 12 month period of November 1 to
October 31; performance in these policy sections will be given special
attention as part of the bonus review the following year.
8.
In November, the board shall determine whether the GM shall receive a
yearly bonus, and if so, its amount. The purpose of a bonus is to
reward outstanding performance in fulfilling Ends and Boundaries
policies during the preceding 12-month period (November 1 – October
31), in particular those policies that the board had previously
identified as high priorities.
IV. Board Process*
The
board governs Good Foods Co-op in the interests of its ownership. As
trustees of the owners’ financial investment in the Co-op, the Board
has fiduciary responsibility to the owners. The Board uses a policy
governance model to accomplish its goals.
A. Responsibility to Owners*
Within
reasonable cost constraints, the board is accountable to the owners and
is committed to communication with owners which includes, but is not
limited to:
1. Seeking owners’ values on what Good Foods
Co-op should achieve and the limitations within which achievement
should be accomplished.
2. Informing owners about the board’s governance work and educating owners on their role as owners.
3. Accounting to the owners about Good Food Co-op’s accomplishment of Ends within acceptable means.
To
these ends, the board will create an annual Owner Linkage plan that
outlines how the board intends to elicit feedback from and communicate
with owners. The Owner Linkage plan will be completed for presentation
at the Annual Ownership Meeting in April of each year. Data gathered in
Owner Linkage activities will be used to inform the board’s work and
will inform future Owner Linkage activities. The board’s role includes
assuring Owner satisfaction with the overall direction of the Co-op
through systematic monitoring of the board’s effectiveness.
The
Board will respond in a timely fashion to formal communications by
owners [i.e letters, emails and comments through the suggestion box or
conversation with Board members at Owner Linkage events.] The board
will decide upon receipt of the communication whether the issue merits
time on a Board meeting agenda and/or the formation of a Task Group.
The Board will choose a member to send courteous written
acknowledgement of the communication explaining the Board’s response to
the inquiry and, if pertinent, inviting further involvement from
Owners.
B. Cost of Governance*
Because poor governance costs more than learning to govern well, the board will invest in its governance capacity.
Accordingly,
1. Board skills, methods, and supports will be sufficient to assure governing with excellence.
a.
Training and retraining will be used liberally to orient new members
and candidates for membership, as well as to maintain and increase
existing member skills and understandings.
b. Outside monitoring
assistance will be arranged so that the board can exercise confident
control over organizational performance. This includes but is not
limited to fiscal audit.
c. Outreach mechanisms will be used as needed to ensure the board’s ability to listen to owner viewpoints and values.
2.
Costs will be prudently incurred, though not at the expense of
endangering the development and maintenance of superior capability. The
board shall annually expend:
a. Between 0.05% and 0.10% of budgeted sales for training, including attendance at conferences and workshops.
b. Up to $14,000 for audit and other third-party monitoring of organizational performance.
c. Up to $2,500 for surveys, focus groups, opinion analyses, and meeting costs.
C. Board Job
While
the job of the General Manager is to achieve the Co-op’s mission in a
prudent and ethical way, the job of the Board is to make certain
contributions to the total which are unique to its trusteeship (or
fiduciary) role and necessary for proper governance and management.
Consequently the board’s job has three key parts:
1. maintaining a strong link between the cooperative and its owners
2. assuring owner satisfaction through systematic monitoring of co-op effectiveness (GM performance);
3.
governing the co-op through carefully crafted written policies. Because
one of the board’s major responsibilities is the careful crafting of
written policies to guide its own efforts and the efforts of the
General Manager, the board will continually be developing new policies
and modifying existing policies. The following procedure outlines the
steps by which new policies are developed.
a. New Executive
Limitations policies generally arise out of the concerns, ideas, or
worries of board members or others in the Co-op community.
b.
When a board member raises an issue, the facilitator will ask whether a
majority of board members share the concern. If not, the concern will
be dropped for the time being. If the concern is shared, proceed to the
next step.
c. The board will determine [or delegate a task
group to determine] whether a policy already exists to address the
concern. If not, proceed to the next step.
d. The board will determine what kind of policy is needed and where it would fit within the existing framework.
e.
The board will assign a priority to the issue or send it to the
President, who will situate the issue within a prioritized list of
issues.
f. If and when the issue rises to the top of the
prioritized list, the board or President will determine whether a more
general policy is needed before adding the new policy language. If so,
the board will institute the more general policy first and then
institute the more specific policy.
g. The board will outline the policy language needed.
h. The board will either:
i. Draft the new policy itself;
ii. Assign the drafting task to a task group; or
iii.
May ask a task group to come up with two or more possible policies,
along with a discussion of the pros and cons of each policy option.
i. The board will decide at a board meeting whether or not to approve the proposed policy.
j. The Board Administrative Assistant shall distribute the approved policy at the next board meeting.
D. Governing Style*
Distinguishing
clearly between board and management roles, the board will provide
strategic leadership rather than operational control and work to create
the future rather than spend time checking on past performance.
Encouraging a diversity of viewpoints for discussion, the board will
make decisions and speak with one voice. Continually informing itself
on the evolving interests, concerns, and needs of owners and potential
owners, the board will be pro-active rather than reactive. In this
spirit, the board shall:
1. govern the Co-op through written
policies with an emphasis on long-term results and a vision for the
Co-op’s future rather than administrative details or means.
2.
be accountable to the ownership and the larger community for competent,
conscientious and effective accomplishment of its obligations.
3. be a voice for cooperative principles in the larger community.
4. inspire the Co-op by developing and using policies in four areas:
a. Ends (what good for whom at what cost)
b. Executive Limitations (binding constraints of prudence and ethics)
c. Board-General Manager Relationship (how power is delegated and how its proper use is monitored)
d. Board Process (how the Board carries out its tasks)
5. review the governance policies at least once each year and modify them as needed.
6.
discipline itself in regard to attending board meetings, speaking with
one voice, respecting clarified roles, adhering to policy-making
principles, and staying focused on larger issues. The board will have a
self-evaluating discussion at the board meeting following the
submission of the president’s annual report.
E. Annual Agenda Planning*
To
accomplish its job with a governance style consistent with board
priorities, the board will follow an annual agenda that (a) completes a
re-exploration of Ends policies annually and (b) continually improves
board performance through board education and enriched input and
deliberation.
1. The cycle will begin at the July board
meeting so that the new board members have several months to orient
themselves with Policy Governance. The cycle will end at the Annual
Owner Meeting, which includes elections and is usually scheduled for
the last Sunday in April.
2. The cycle will start with the board’s development of its agenda for the next year.
a. Board priorities and goals for the year will be determined before the September board meeting.
b.
Consultations with selected groups in the ownership, or other methods
of gaining owner input, will be determined and arranged by the October
board meeting and held during the balance of the year.
c.
Governance education and education related to Ends determination
(presentations by experts, community leaders, or other resources, etc)
will be arranged by the November board meeting and held during the
balance of the year with the understanding that the agenda may be
revised as the board deems necessary according to emerging issues.
F. President’s Role*
The
job of the President is to ensure the integrity of the board’s process.
The role of the President is to ensure that the board behaves
consistently with the Co-op’s bylaws, its own policies, and any legal
requirements.
1. The President may interpret and apply
policies in the areas of Board-Management Relationship and Board
Process. The chairperson has no authority to interpret policies in the
areas of Ends or Executive Limitations, and does not direct or
supervise the GM.
2. The President has the primary
responsibility for tracking the board’s compliance with the
“Board-Management Relationship” policies and the “Board Process”
policies.
3. The President shall be responsible for drafting
an annual agenda for Owners Linkage; this annual agenda shall also
include schedules for co-op newsletters, months for receiving and
reviewing all compliance reports as well as reviewing GM performance,
contract, and salary (III.C and D.). The annual agenda may include
national board training opportunities and co-op conferences such as the
Consumer Cooperative Management Conference (CCMA).
4. The
President shall ensure that all reports called for in the board
policies are considered by the board in a timely manner.
5.
The President shall submit two reports each year, one on the board’s
compliance with its policies on board-management relations and one on
board process. In the month following each report, the board will have
a self-evaluating discussion to deal with any issues of non-compliance
and make changes as needed.
6. In June of each year, the
President (having just been elected in May) shall inform the Co-op’s
Finance Manager that s/he may bring matters of extreme financial
concern directly to the attention of the President.
G. Board Meetings*
Board meetings are for the single task of getting the board’s job done (C. 1, 2, and 3 above).
1.
At the end of each board meeting, the board shall identify items that
it wishes to appear on the agenda for the next meeting. The board
president shall develop a draft agenda to be included in the advance
packet for each board meeting. When developing agendas, the President
shall consider items listed at the previous board meeting as well as
the board’s annual planning calendar and items for which the GM has
previously reported non-compliance. The board itself has the final say
about its own agenda.
2. Board meeting time is devoted to
those issues which are within the board’s areas of responsibility.
Deliberation will be open, fair, and thorough, but also efficient,
timely, orderly, and kept to the point. In keeping with the board’s
commitment to the policy governance model, board meetings should
include ample time for “board members to learn together, to contemplate
and deliberate together, and to decide together.” (Carver and Carver,
2006)
3. The board has the authority to make governing
decisions only when acting as a group during board meetings. The board
shall use the following decision-making process. The board shall
attempt to reach consensus in any proposal before it. The facilitator
asks for clarifying question, concerns, amendments and objections. The
board may use consensus-building techniques such as brainstorming,
reframing the issue, taking a straw poll, breaking up into small groups
for discussion, and other techniques. After discussion, the facilitator
tests for consensus. If no board member has a major objection at that
time, the proposal is approved. If one or more members have a major
objection, the board decides by a two-thirds majority whether to call
the question. If a two-thirds majority votes to call the question, the
board proceeds to vote on the proposal. The proposal is approved if a
two-thirds majority of the board members present votes in favor of it.
4.
In the Event that the General Manager submits a cost-benefit analysis
preparatory to making a capital investment of more than $20,000, the
board shall make its assessment of consistency and reasonableness as
soon as possible thereafter, unless there is a continuing need for
confidentiality.
5. Throughout the year, the board will
attend to consent agenda items as expeditiously as possible. Minutes
reviews, compliance monitoring, acceptance of routine reports, or other
business as designated by the president shall be in the “consent”
portion of the agenda. If a board member wishes to discuss these
issues, the president must be notified by email or phone at least 48
hours before the board meeting.
6. GM monitoring will be
included on the agenda if monitoring reports show policy violations or
if the board, for any reason, chooses to debate amending its monitoring
schedule.
7. The board may engage the services of a meeting
facilitator to assist in setting and following an agenda; maintaining a
positive tone and respect for all; and encouraging constructive
criticism.
a. The facilitator serves the Board.
b. The facilitator remains neutral on all discussion and decisions about content.
c.
The facilitator may make suggestions, consistent with established
procedures, to the Board intended to make the Board meeting as
efficient and effective as possible. The Board makes the final decision
about those suggestions.
H. Board Members’ Code of Conduct*
The
board expects of itself and its members ethical and businesslike
conduct. This commitment includes proper use of authority and
appropriate decorum in group and individual behavior when acting as
board members. Immediately after election, each new board member will
be given a copy of the form below and asked to sign and date it for
Co-op records. By the January board meeting each year, every board
member shall submit a self-evaluation with a comment on each bullet
below. This report will be kept on file and accessible to the
Nominations Committee. At the January board meeting, the board will
devote a portion of the agenda to collectively assessing its work of
the past year in light of this Code of Conduct, with a focus on
strengths and areas for improvement in the coming year.
CODE OF CONDUCT for Board Members of the Good Foods Co-op
As a Co-op director, I pledge to do my best for Good Foods Co-op and will:
• Devote the time needed to fulfill the responsibilities of the position;
• Attend all regular and special board meetings and meetings of committees of which I am a member;
• Be prompt, attentive, and prepared for all board and committee meetings;
• Contribute to and encourage open, respectful, and thorough discussions by the board;
•
Attend and actively participate in the board’s training sessions and
retreats to enhance board understanding and cohesiveness;
• Consider the business of the Co-op and its owners to be confidential in nature;
•
Disclose any personal or organizational conflict of interest that I may
have or acquire, and refrain from discussing or voting on any issues
related to that conflict;
• Be honest, helpful, diligent, and
respectful in my dealings with the Co-op, with other directors, and
with the Co-op’s management, staff, and owners;
• Work for continued and increased effectiveness in the Co-op’s ability to serve its owners;
• Be a team player and agree to abide by decisions of the board, even if it is not my own personal opinion;
•
Present the agreed-upon view of the board of directors, rather than my
own, when I speak for the Co-op to employees, owners, shoppers, and the
general public;
• Refrain from asking for the special privileges as a board member and from interfering with management’s authority;
•
Work to ensure that the Co-op is controlled in a democratic fashion by
its owners and that all elections are open, fair, and encourage the
participation of all owners;
• Strive at all times to keep the owners informed of the Co-op’s status and plans, and of the board’s work, as appropriate;
•
Continually seek to learn more about the Co-op and its operations and
about my responsibilities as a board member by pursuing educational
opportunities.
As a Co-op director, I agree to abide by this
Code of Conduct. I agree that if I have violated the letter or spirit
of this agreement, the other board members may take action to remove me
from the board pursuant to the Co-op’s bylaws.
I. Policy on Self-Perpetuation*
It
is the board’s responsibility to achieve its own self-perpetuation. The
board accomplishes this through the recruitment and development of
skilled, committed, and motivated members. The overall result of
self-perpetuation is a body that provides effective leadership over
time and irrespective of individual directors.
1. The Nominations Committee shall be elected by the ownership.
a. Terms shall be for two years.
b. Five members shall be elected to the committee.
c. Terms shall be staggered such that no more than three expire in any one year.
d. The elected members may invite additional volunteer members to help if needed.
e. No one may serve on both the board and the Nominations Committee at the same time.
2. The duties of the committee are as follows:
a. Recruit candidates for the board and the nominations committee.
b.
Assure that Nominees have attended at least two meetings of the board
and one meeting of a board advisory task group before standing for
election.
c. Oversee elections.
d. Provide leadership training for candidates and/or orientation for new board members.
e. Work year-round, beginning recruitment as soon as a board election is completed.
3.
The current board president remains the president until the May
meeting, and shall prepare the agenda for the May meeting. New board
officers shall be elected at the May meeting.
4.
Orientation for all board members shall be held prior to the new board
members’ first board meeting in order to brief new members on the
governance structure of the Co-op and to create a constructive team
spirit.
5. Any board member who is also a paid employee has
the same duties and responsibilities as any other Board member and also
has the duty of ensuring segregation of staff and board
responsibilities.
a. A Board member who is also a paid employee
is responsible to the membership as a whole and does not serve as board
representative for staff.
b. If a Board member who is also a paid
employee becomes subject to written warnings or probationary status
because of inadequate performance of his or her duties at the Co-op,
the Board has the discretion to require that the board member take a
leave of absence from the Board until his or her performance improves
and is no longer subject to written warnings or probationary status.
c.
If a Board member who is also a paid employee is terminated for cause,
the Board member will resign from the Board effective the date
employment at the Co-op terminates.
J. Task Groups*
The
Board may establish task groups to assist in carrying out its
responsibilities. Task groups will be formed through voluntary
leadership by individual Board members, with guidance from the Board
President when necessary. Task Groups will convene for a predetermined
duration or until the completion of a task or study. Task Groups will
have a clearly specified mandate and will be informed of the expected
outcomes of their work. Task Groups may be comprised of the following
configurations:
1. Exclusively Board members; when the issue pertains solely to internal Board work.
2. Board members and Owners; when the topic could benefit from Owner input.
3.
Owners, potential owners, and a Board Chair; when the issue is brought
to the Board by an Owner/s and the Board determines the issue warrants
attention.
All Task Groups will be led by a Board Chair, who
will report to the Board and/or the President. Board members may
participate in Multiple Task Groups but may only chair one group at a
time.
Articles of Incorporation
The undersigned, a majority of whom are residents of the State of Vermont, for the purpose of organizing a consumers' cooperative under the provisions of the Cooperative Marketing Act, 11 V.S.A. Chapter 7, Subchapter 2, hereby subscribe to the following Articles:
I. The name of the corporation shall be Good Foods Co-op (hereinafter "the Cooperative").
II. The period of duration of the Cooperative shall be perpetual.
III. The purpose for which the Cooperative is formed is to engage in any one or more lawful mode or modes of acquiring, producing, operating, furnishing, exchanging or distributing food products and other goods and services, and to educate owners and the community about cooperative principles, nutrition, food sources and distribution for the primary and mutual benefit of its patrons as ultimate consumers. The Cooperative is organized and shall be operated exclusively on a cooperative and nonprofit basis.
IV. The initial place where the business of the Cooperative shall be located is 455-D Southland Drive, Lexington, Kentucky 40503.
V. The common shareholders of the Cooperative (hereinafter "owners") shall have the right to vote or otherwise participate in decision making in person or by alternate only (including, when authorized, by written ballot) but not by proxy or otherwise. This provision shall not be altered and shall not be subject to amendment.
VI. The aggregate number of shares which the Cooperative shall have authority to issue or reissue is one hundred thousand (100,000) shares of common stock with a par value of two hundred dollars ($200.00) per share and one hundred thousand (100,000) shares of preferred stock with a par value of one hundred dollars ($100.00) per share.
Common shares shall be issued only to persons eligible for, and admitted to, ownership in the Cooperative. They shall be entitled to no dividends or other monetary return on investment. The voting rights of such shares shall consist only of the participation rights accorded owners under these Articles and the by-laws of the Cooperative.
Preferred shares shall be nonvoting. The Board of Directors may divide and issue such shares in series and determine their designations, preferences, limitations and relative rights.
VII. The name and post office address of the resident agent of the Cooperative is Laddie Lushin, Esq., 4120 Braintree Hill Road, Braintree, Vermont 05060-8854.
VIII. The names and post office addresses of the persons who are to serve as directors of the Cooperative until the election and qualification of their successors shall be:
Elizabeth Churchill 366 Transylvania Park Lexington, KY 40508
Patricia Donohue 913 Cramer Avenue Lexington, KY 40502
Michael Fogler 722 Bishop Drive Lexington, KY 40505
Caitlin Stamps 305 Given Avenue Lexington, KY 40502
Chetan Talwalker 581 Stratford Drive, #3 Lexington, KY 40503
Jeff Watts 547 Breckinridge Street, #2 Lexington, KY 40508
Syl Yunker 2211 Stonewood Lane Lexington, KY 40509
IX. Except as otherwise provided below, the Co-op shall indemnify its directors and officers to the fullest extent permitted under the Vermont Nonprofit Corporation Act. The Cooperative shall not be required to indemnify a director or officer who was successful otherwise than on the merits in the defense of a proceeding to which the director or officer was a party because he or she was a director or officer of the Cooperative.
X. To the extent not inconsistent with the Cooperative Marketing Act, the Cooperative shall be governed by the Vermont Nonprofit Corporation Act, V.S.A., T. 11B.
XI. Except as authorized in the Vermont Nonprofit Corporation Act and subject to the restrictions in Article XII of these Articles, the Cooperative shall make no distributions.
XII. On dissolution of the Cooperative, its assets shall be distributed in the following manner and order: (i) by paying or making provision for payment of all liabilities and expenses of liquidation; (ii) by redeeming preferred and common shares on the terms and conditions set forth in the by-laws of the Cooperative and, with respect to any preferred shares, in accordance with any and all preferences, limitations, and relative rights established by the Board of Directors when such preferred shares were issued; and (iii) by distributing any remaining assets to one or more organizations that shall at the time qualify as an organization exempt from federal income taxation under section 501(a) as an organization described in section 501(c)(3) of the Internal Revenue Code. Any assets not so disposed of shall be disposed of by a court of competent jurisdiction of the county in which the principal office of the corporation is then located to one or more organizations that so qualify.
Bylaws
ARTICLE I
ORGANIZATION
Section 1.1 Name. The name of the organization is Good Foods Co-op (referred to in these bylaws as "the Co-op.")
Section 1.2 Purposes. As more fully stated in its Articles of Incorporation, the purpose of the Co-op is to operate a retail food store on a cooperative and nonprofit basis. Further purposes of the Co-op are to educate owners and the community in cooperative principles, nutrition and food sources and distribution, and to affiliate and cooperate with other consumer cooperatives.
Section 1.3 Nondiscrimination. The Co-op shall not discriminate on the basis of race, nationality, religion, age, gender, sexual orientation, political affiliation, disability or other arbitrary basis.
Section 1.4 Principal office. The initial place where the business of the Co-op shall be located shall be 455-D Southland Drive in the City of Lexington, Kentucky.
ARTICLE II
OWNERSHIP
Section 2.1 Admission. Common stock ownership in the Co-op shall be voluntary and open to any individual whose purpose in seeking ownership is to use its services and is willing to accept the responsibilities of ownership. Applicants will be admitted to ownership upon submitting required information and purchasing or subscribing to purchase one or more common shares at a price that is in accordance with the current level of investment as determined by the Board of Directors. In case of doubtful eligibility, ownership shall be subject to approval by the Board. A person so holding, or having subscribed for, one or more common shares is referred to in these bylaws as an "owner."
Section 2.2 Rights. The ultimate control of the Co-op shall be vested in the owners. Each owner shall be entitled to make purchases from the Co-op on terms generally available to owners and to receive a copy of these bylaws. Each owner who has attained the age of eighteen shall be entitled to participate in the governance of the Co-op as set forth in these bylaws. Owners may also contribute labor or services and thereby be entitled to receive discounts as determined by the Board.
Section 2.3 Responsibilities. Each owner shall keep current in payment of the share purchase requirement described in Section 2.1 above and shall notify the Co-op of any change to his or her name or address. An owner who becomes delinquent in meeting his or her share purchase obligation to an extent determined by the Board, or who fails to patronize the Co-op for a period of time determined by the Board, shall be placed in inactive status. His or her participation rights shall then be suspended. An owner in inactive status may attain good standing only by resuming payments in accordance with the terms of his/her payment plan, or in the case of an owner whose share is fully paid up, upon resumption of patronage. References herein to the rights and entitlements of owners shall be understood to refer only to owners in good standing.
Section 2.4 Access to information. Owners shall be provided reasonably adequate and timely information as to the organizational and financial affairs of the Co-op. Owners shall be provided access to the books and records of the Co-op at all reasonable times and for any proper purpose.
Section 2.5 Settlement of disputes. In any dispute between the Co-op and any of its owners or former owners which cannot be resolved through informal negotiation, it shall be the policy of the Co-op to prefer the use of mediation whereby an impartial mediator may facilitate negotiations between the parties and assist them in developing a mutually acceptable settlement. No party with a grievance against the other shall have recourse to litigation until the matter is submitted to mediation and attempted to be resolved in good faith.
Section 2.6 Nontransferability. Ownership rights and interests may not be transferred. Any attempted transfer contrary to this section shall be wholly void and shall confer no rights on the intended transferee.
Section 2.7 Termination. Ownership may be terminated voluntarily by an owner at any time upon notice to the Co-op. Ownership may be terminated involuntarily only for cause by the Board after the owner is provided fair notice of the charges and an opportunity to respond in person or in writing. Upon termination of ownership, all rights and interests in the Co-op shall cease except for rights to redemption of capital pursuant to Sections 8.4 and 9.4 of these bylaws.
ARTICLE III
MEETINGS OF OWNERS
Section 3.1 Annual meeting. An annual meeting of owners shall be held at least once each year to review the operations of the Co-op, to elect directors and to conduct such other business as may properly come before the meeting. Section 3.2 Special meetings. Special meetings of owners may be called by the Board and shall be called by the Secretary as soon as practicable upon receipt of petitions signed by fifty owners or five percent of all owners, whichever is lesser, such petitions stating the business to be brought before the meeting. Any business conducted at a special meeting other than that specified in the notice of the meeting shall be of an advisory nature only.
Section 3.3 Time and place. The date, time and place of all meetings of owners shall be determined by the Board or, in the event that the Board fails to so act, by the Secretary. Meetings shall be held at a time and place convenient to owners.
Section 3.4 Notice. Written notice of the time, place and tentative agenda of any annual meeting of owners shall be posted in the Co-op's store and mailed to each owner not less than twenty days nor more than sixty days before the date of the meeting. Written notice of the time, place and agenda of any special meeting of owners shall be posted in the Co-op's store and mailed to each owner not less than ten days nor more than sixty days before the date of the meeting. Written notice by the Co-op to its owners, if in a comprehensible form, shall be effective when mailed, if mailed postpaid and correctly addressed to the owner's address shown in the Co-op's current record of owners.
Section 3.5 Quorum. Except as otherwise provided in Section 3.7, the presence in person at the opening of the meeting of fifty owners or five percent of all owners, whichever is lesser, shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of owners.
Section 3.6 Decision making. Except as otherwise set forth in Section 3.7 of these bylaws, decisions at meetings of owners shall be by two-thirds majority vote of votes cast at the owners' meeting. Holders of
common shares shall be entitled to vote on the basis of one vote per owner.
Section 3.7 Balloting. The Board may authorize balloting by mail, in the Co-op’s store, or in person at a meeting with respect to election of directors, Nominating Committee members, and other selected issues. Ballots, together with a brief statement of the qualifications of each candidate for available director and Nominating Committee positions or the text or a full description of any other issue for decision, shall be included in the notice of the meeting to which they relate. Only official ballots approved by the Board for use at an owners’ meeting may be utilized for ballot voting. Quorum requirements shall be determined by adding together the number of owners attending at the meeting who have not voted by ballot and the number of validly executed ballots returned. When ballots are utilized, decision making shall be by two-thirds majority vote of votes cast in person or by ballot, except for the election of directors which shall be determined in accordance with Section 5.3 of these bylaws and the election of Nominating Committee members which shall be determined in accordance with Section 4.3 of these bylaws. The results of the balloting shall be reported to owners by mail and posted in the Co-op’s store.
Section 3.8 Issues submitted by owners. Notices of a meeting of owners shall include any proper issues submitted by petition of at least twenty owners. Petitions must be received at the Co-op not less than sixty-five days before the date of the meeting at which they are to be presented to a vote of owners.
Section 3.9 Alternates. The owners of the Co-op shall have the right to vote or otherwise participate in decision making at meetings of owners in person or by alternate. An owner may appoint an alternate to vote or otherwise act for him or her by signing a written alternate appointment form approved by the Secretary of the Co-op. An appointment of an alternate shall be revocable by the owner, but revocation shall not be effective until the Secretary of the Co-op has received written notice thereof. A person may not act as an alternate for more than one owner at any meeting.
ARTICLE IV
NOMINATING COMMITTEE
Section 4.1 Powers and duties. The Nominating Committee shall be an owners’ committee, elected by and reporting directly to the owners. The powers and duties of the Nominating Committee shall be to recruit candidates for the Board of Directors and the Nominating Committee, nominate the most qualified candidates while striving for a contested election, and oversee the elections process in accordance with Section 3.7 of these Bylaws. The Nominating Committee shall ensure that the nomination and election processes are carried out in a fair and timely manner and shall work year-round, beginning recruitment soon after a Board election. The Nominating Committee shall be assured a budget, approved by the Board, sufficient to carry out its duties.
Section 4.2 Numbers and qualifications. The Nominating Committee shall consist of three owners elected by the ownership who do not have any overriding conflict of interest with the Co-op. The elected committee members may appoint additional owners as needed to aid in the nominations process. No individual may serve on both the Board and the Nominating Committee at the same time.
Section 4.3 Nominations, elections, and terms. Candidates may be nominated by the Nominating Committee or by petitions signed by 5% of the ownership or 100 owners, whichever is more. Petitions must be submitted to the Nominating Committee at least sixty-five days before the date of the annual meeting. Nominating Committee members shall be elected by owners at the annual meeting by plurality of votes cast. Periodically, as may be necessary, Nominating Committee members shall be elected for one or two-year terms in order to assure that no more than two terms expire in each year. Candidates receiving the highest number of votes shall be given the longest available terms. At other times Nominating Committee members shall be elected for two-year terms. Nominating Committee members shall hold office until their successors are elected or until their offices are terminated sooner in accordance with these bylaws. If a Nominating Committee member decides to run for the Board, that member shall withdraw from the Nominating Committee before submitting a statement of candidacy.
Section 4.4 Standards of conduct. Nominating Committee members shall be responsible at all times for discharging their duties in good faith, in a manner they reasonably believe to be in the best interests of the Co-op, and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Section 4.5 Relationship with the Board. The Nominating Committee shall carry out its duties as described in these bylaws independent of the Board, however, the Nominating Committee shall periodically communicate its status to the Board. The Board shall intervene only in the event that the Nominating Committee acts contrary to legality, safety, or these co-op bylaws. The Board shall inform the ownership in a timely manner of any such action.
Section 4.6 Termination. The term of office of a Nominating Committee member may be terminated prior to its expiration in any of the following ways: (i) voluntarily by a Nominating Committee member upon notice to the Co-op; (ii) automatically upon termination of ownership in the Co-op; and (iii) by action at a meeting of owners whenever the best interests of the Co-op would thereby be served.
Section 4.7 Vacancies. In the event that the Nominating Committee is unable to perform its duties due to the loss of Nominating Committee members, the Board shall appoint owner volunteers to the Nominating Committee. The Board shall inform the ownership in a timely manner of any such action.
ARTICLE V
BOARD OF DIRECTORS
Section 5.1 Powers and duties. Except as to matters reserved to owners by law or by these bylaws, the business and affairs of the Co-op shall be directed and overseen by the Board of Directors (sometimes referred to in these bylaws as "the Board"). The powers and duties of the Board shall include, but not be limited to, overseeing the operations and finances of the Co-op and planning with respect to such functions, overseeing compliance with applicable laws and regulations, engaging one or more retail managers and monitoring and evaluating their performance, maintaining communications with owners and staff, maintaining good community relations, and assuring that the purposes of the Co-op are properly carried out.
Section 5.2 Number and qualifications. The Board shall consist of seven individuals unless a smaller number, not fewer than five, becomes necessary by reason of vacancies. All directors shall be owners and shall not have any overriding conflict of interest with the Co-op. Employees hired by, and directly accountable to, the Board shall not be eligible to serve as directors. No more than one other employee shall serve as a director at any time.
Section 5.3 Nominations, elections, and terms. Candidates may be nominated by the Nominating Committee or by petitions signed by 5% of the ownership or 100 owners, whichever is more. Petitions must be submitted to the Nominating Committee at least sixty-five days before the date of the annual meeting. Directors shall be elected by owners at the annual meeting by plurality of votes cast. Periodically, as may be necessary, directors shall be elected for specific one, two, or three year terms in order to assure that no more than three terms expire in each year. Candidates receiving the highest number of votes shall be given the longest available terms. At other times directors shall be elected for three-year terms. Directors shall hold office until their successors are elected or until their offices are terminated sooner in accordance with these bylaws.
Section 5.4 Standards of conduct. Directors shall be responsible at all times for discharging their duties in good faith, in a manner that they reasonably believe to be in the best interests of the Co-op and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Section 5.5 Contracts for profit. During her or his term of office, a director shall not be a party to a contract for profit with the Co-op differing in any way from the business relations accorded each owner or upon terms differing from those generally current among owners.
Section 5.6 Conflicts of interest. Directors shall be under an affirmative duty to disclose their actual or potential conflicts of interest in any matter under consideration by the Board, and such interest shall be made a matter of record in the minutes of the meeting. Directors having such an interest may not participate in the decision of the matter nor in deliberations leading to such decision. A transaction in which a director has an interest shall be prohibited unless the transaction is fair to the Co-op and is approved by no less than a two-thirds majority of all disinterested directors.
Section 5.7 Indemnification. In order to attract and retain qualified people to serve as directors and officers, the Co-op shall, subject to the provisions of its Articles of Incorporation, indemnify its directors and officers to the fullest extent permitted under the Vermont Nonprofit Corporation Act. Indemnification payments shall be made only in such increments and at such times as will not jeopardize the ability of the Co-op to pay its other obligations as they become due. All such payments made shall be reported in writing to owners with or before the notice of the next meeting of owners.
Section 5.8 Committees. The Board may appoint special or standing committees to advise the Board or to exercise such authority as the Board shall designate. Such committees shall include at least one director.
Section 5.9 Termination. The term of office of a director may be terminated prior to its expiration in any of the following ways: (i) voluntarily by a director upon notice to the Co-op; (ii) automatically upon termination of ownership in the Co-op; (iii) by action at a meeting of owners whenever the best interests of the Co-op would thereby be served; and (iv) for cause by the Board after the director is provided fair notice of the charges and an opportunity to respond in person or in writing. A director who is absent from two consecutive Board meetings, unless excused by the Board for good cause, may be removed by the Board for cause.
Section 5.10 Vacancies. Any vacancy among directors occurring between annual meetings may be filled by the Board until the next annual meeting of owners. If there are fewer than five remaining directors, the remaining director or directors shall appoint a sufficient number of directors to bring the total to five, and shall call a special meeting of owners as soon as is reasonably possible to fill all such vacancies, including such vacancies filled by appointment of the Board.
Section 5.11 Compensation of Directors. The Board of Directors may from time to time fix the compensation of directors. However, unless otherwise approved by the Board of Directors, an employee of the Co-op who also serves as a director shall receive no additional compensation for serving in such capacity.
ARTICLE VI
MEETINGS OF THE BOARD
Section 6.1 Meetings. The Board of Directors may determine the times and places of its regular meetings. Special meetings may be called by the President and shall be called by the Secretary upon request of any three directors. Meetings of the Board shall be held no less frequently than six times in each year.
Section 6.2 Notice. Regular meetings shall require no notice other than the resolution of the Board, it being the responsibility of absent directors to inquire as to the time of further scheduled meetings. Special meetings of the Board of Directors shall be preceded by at least two (2) days' notice of the date, time, and place of the meeting. The notice shall not be required to describe the purpose of the special meeting. Notice may be communicated in person; by telephone, telegraph, teletype, or other form of wire or wireless communication; or by mail or private carrier. Written notice, if in a comprehensible form, shall be effective at the earliest of the following: when received; five (5) days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed; on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. Oral notice shall be effective when communicated if communicated in a comprehensible manner. Notices of meetings of the Board shall also be posted in a timely manner and in a conspicuous place in the Co-op's store.
Section 6.3 Waiver of notice. Any notice of a meeting required under these bylaws may be waived in writing at any time before or after the meeting for which notice is required. The attendance of any person at a meeting shall constitute a waiver of notice of the meeting except where the person attends for the express purpose of objecting to the transaction of business because the meeting is not lawfully convened.
Section 6.4 Quorum. The presence in person of a majority of directors who are not personally interested in the subject before the board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board.
Section 6.5 Decision making. Decisions at meetings of the Board shall be made by consensus, attempting to reconcile differing points of view based upon the purposes and best interests of the Co-op. Any decision made by consensus shall be deemed to be inclusive of a vote in any required percentage. If, in the opinion of a two-thirds majority of directors present, diligent efforts have failed to produce a consensus and the issue requires immediate action, then such issue may be decided by a two-thirds majority vote of those present at a meeting.
Section 6.6 Telephone conferences. A meeting of the Board may be conducted by means of a telephone conference or other communications equipment whereby all persons participating can hear each other at the same time. Participation by such means shall constitute presence in person at such a meeting. Telephone conferences shall not be used for the purpose of excluding owners.
Section 6.7 Action without a meeting. Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting only if a written consent to the action is signed by all directors and filed with the minutes of meetings.
Section 6.8 Open meetings. Meetings of the Board and all committees shall be open to owners. Sessions of a meeting may be closed only as to personnel, legal, and real estate matters, and other issues of a particularly sensitive nature as determined by the Board at its sole discretion. Such closed session shall be for purposes of discussion only and no decisions shall be made in closed session. Owners may otherwise be excluded only for cause.
ARTICLE VII
OFFICERS
Section 7.1 Designation and qualifications. The principal officers of the Co-op shall consist of President, Vice President, Secretary, and Treasurer or Secretary-Treasurer. The Board may designate other officers or assistant officers. The President and Vice President shall be directors. Employees of the Co-op are not eligible for the offices of President, Vice President or Treasurer.
Section 7.2 Election, terms, and removal. Officers shall be elected by the Board at its first meeting following the annual meeting of owners. Officers shall serve for terms of one year or until election of their successors. Officers may be removed and replaced by the Board at any time whenever the best interests of the Co-op would thereby be served.
Section 7.3 Duties. In addition to signing or attesting to formal documents on behalf of the Co-op as authorized by the Board, officers shall have the following duties and such additional duties as are determined by the Board: (a) The President shall be responsible for assuring the orderly conduct of all meetings, coordinating the activities of the Board, and presenting an annual report to owners in accordance with section 9.3 of these bylaws; (b) The Vice President shall be responsible for performing the duties of the President in his or her absence or disability and, as requested, assisting other officers in the performance of their duties; (c) The Secretary shall be responsible for the recording and keeping of adequate minutes of all meetings of the Board and of owners, issuing notices required under these bylaws, and authenticating records of the Co-op; and (d) The Treasurer shall present financial reports on a periodic basis as determined by the Board.
Section 7.4 Compensation of Officers. The compensation of the officers of the Co-op may be fixed from time to time by the Board of Directors. However, unless otherwise approved by the Board of Directors, an employee of the Co-op who serves as an officer shall receive no additional compensation for serving in such capacity.
ARTICLE VIII
CAPITAL STOCK
Section 8.1 Issuance and terms. To evidence capital funds provided by owners, the Co-op shall issue its common stock. Common shares may be issued only to persons eligible for and admitted to ownership in the Co-op. Shares shall be entitled to no dividend or other monetary return on investment.
Section 8.2 Payment for shares. Shares shall be issued only upon full payment of their purchase or subscription price which shall not be less than the par value of the shares. Shares shall be subject to assessment for the reasonable capital needs of the Co-op, provided that the purchase price plus such assessments does not exceed the current level of investment required of new owners and provided that such assessment is approved at a meeting of owners. Failure to pay an assessment on the terms and conditions approved by the owners shall be grounds for placing such owner in inactive status as described in Section 2.3 of these bylaws.
Section 8.3 Certificates. Every holder of a fully paid share shall be entitled to receive a certificate evidencing such holding. All certificates shall be signed personally or by facsimile by the President and the Treasurer and shall be numbered and recorded in a stock register maintained by the Co-op. Each certificate shall contain a prominent notation that it is not transferable and that voting rights pertain only to ownership in the Co-op on the basis of one vote per owner. The Co-op may issue a replacement certificate for any certificate alleged to have been lost, stolen, or destroyed without requiring the giving of a bond or other security against related losses.
Section 8.4 Redemption. Upon request following termination of ownership, common shares shall be redeemed when replacement capital is provided by other new owners. Shares shall be redeemable at the lesser of their carrying value on the books of the Co-op or their net book value, less a reasonable processing fee, if any, as determined by the Board. Redemption proceeds shall be subject to offset by amounts due and payable to the Co-op by the owner. No redemption shall be made when such payment would impair the ability of the Co-op to meet its other obligations as they become due. Reapplications for ownership after full or partial redemption shall be subject to full repayment of redemption proceeds. The "carrying value" on the books of the Co-op for the common shares of each owner shall be equal to the original purchase price paid by the owner for the shares, plus additional assessments paid by the owner with respect to the shares, minus capital distributions paid to the owner with respect to the shares.
ARTICLE IX
PATRONAGE REBATES
Section 9.1 Distribution of net earnings. The realized net earnings of the Co-op, to the extent attributable to the patronage of owners, shall be received and held by the Co-op for and as the property of its owners, the basis of each owner's interest therein being as set forth in this article. Such net earnings shall be allocated and distributed among owners as patronage rebates in proportion to their patronage and in such a manner as to constitute patronage dividends within the meaning of federal income tax law. In determining and allocating such adjusted net earnings, the Co-op shall use a single allocation unit except to the extent that, subsequent to the adoption of these bylaws, it shall engage in any new and distinct line of business.
Section 9.2 Exceptions. Net earnings may be reduced by such reasonable reserves for necessary business purposes as is determined by the Board. Any allocations of such a nominal amount as not to justify the expenses of distribution may, as determined by the Board, be excluded from distribution provided that they are not then or later distributed to other owners. Owners shall retain the right to waive in whole or in part, by action at a meeting of owners, any patronage rebates to which they may be entitled.
Section 9.3 Consent of owners. By obtaining or retaining membership in the Co-op, each owner shall thereby consent to take into account, in the manner and to the extent required by Section 1385 of the Internal Revenue Code, the stated dollar amount of any qualified written notice of allocation in the taxable year in which such notice is received.
Section 9.4 Retentions. A portion of patronage rebates may be retained for the reasonable capital needs of the Co-op as determined by the Board. Such retentions shall be credited to revolving capital accounts in the names of recipient owners, shall accrue no monetary return on investment, and shall not be transferable. They may be redeemed when determined by the Board to be no longer needed for capital purposes. At that time they shall be redeemed in the order of the oldest outstanding amounts and on a pro rata basis among such amounts. Retentions may also be redeemed under compelling circumstances as determined by the Board. Retentions shall be subject at all times to being offset by amounts otherwise due and payable to the Co-op.
ARTICLE X
FISCAL MATTERS
Section 10.1 Fiscal year. The fiscal year of the Co-op shall coincide with the calendar year.
Section 10.2 Financial accountability. Financial statements of the Co-op for each fiscal year shall be audited or reviewed by an independent Certified Public Accountant selected by the Board. Such engagement may include a management review and report concerning financial management, including adherence to governing policies, adequacy of internal accounting controls, and such other matters as may be determined by the Board.
Section 10.3 Annual report. The Co-op shall prepare and submit at its annual meeting an annual report containing the name of the Co-op, its principal place of business, a general statement of its business operations during the fiscal year, the amount of capital stock paid in during the year, the number of owners at the end of the year, the total income and expenses of operations, and the amount of its assets and liabilities.
Section 10.4 Education. The Board shall ensure that programs of cooperative education and consumer information are carried on by the Co-op, and shall make adequate funds available for such programs.
Section 10.5 Insurance or Bonding. Any officer, employee or other agent of the Co-op who handles funds or securities shall be covered by adequate insurance or bonding in such amounts and on such terms as maybe determined by the Board. The costs of such insurance or bonds shall be paid by the Co-op.
ARTICLE XI
INTERPRETATION AND AMENDMENT OF BYLAWS
Section 11.1 Severability. In the event that any provision of these bylaws is determined to be invalid or unenforceable under any statute or rule of law, then such provision shall be deemed inoperative to such extent and shall be deemed modified to conform with such statute or rule of law without affecting the validity or enforceability of any other provision of these bylaws.
Section 11.2 Amendment. These bylaws may be amended or repealed only at a meeting of owners, provided that the proposed amendments are stated or fully described in the notice of the meeting at which the amendments are to be adopted.
APPENDIX:
EXPLANATION OF PATRONAGE REBATE CONSENT PROVISION
The Internal Revenue Code generally requires each person receiving a patronage rebate to include the amount of such distribution in his or her gross income in the taxable year in which it is received. Under by-law section 8.3, mere acceptance or retention of ownership in the Co-op constitutes consent to such inclusion in taxable income, including the portion of the patronage rebates that is retained by the Co-op for its capital needs.
The Co-op has been advised by legal counsel, however, that the general rule for inclusion in income of patronage rebates is subject to an exception that is applicable to consumer cooperatives. Under that exception, a patronage rebates is not required to be included in gross income if the owner's purchases from the Co-op related to "personal, living or family items." The patronage rebate would be taxable to a member only if his or her purchases related to the operation of a trade or business or other income-producing activities. In effect, the consent provision is of no significance to members of the Co-op, except as to organizational owners and except where the purchases of owners who are natural persons are for business or income-producing purposes.
Amended April 27, 2003
Amended April 25, 2004
Amended April 30, 2006
Amended April 27, 2008
Amended April 26, 2009
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