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  • Writer's pictureD. Maurice Kreis

Gripes from a Congentitally Cranky Cooperator

I'm sticking with the sentiment that has been attributed, perhaps apocryphally, to Emeritus Professor Clyde Stickney of the Dartmouth College Tuck School of Business: that, with apologies to Dartmouth, the most important institution in and around the college town on the Connecticut River is actually the Hanover Consumer Cooperative Society. I'm talking about the customer-owned grocery and auto repair empire commonly referred to as The Co-op.

In that spirit, I have two new gripes about The Co-op.

The first has to do with the fact that 'tis the season to begin the process of seeking election to The Co-op's twelve-member Board of Directors. If you are a member-owner of The Co-op, there is no more rewarding and consequential public service opportunity within a hundred miles of Hanover. I'm testifying from personal experience, having served for eleven years on the Board, including three as president.

The Board's nominating committee is seeking candidates and has established February 1 as the application deadline. Five of the twelve seats on the board are up for election this year, which makes this an unusually consequential opportunity to determine the future of this 85-year-old community bulwark and economic engine.

So how is the Board promoting this opportunity? By publishing a list of its "top ten reasons" to run election, the first and last of which is that Board members receive the 20-percent discount The Co-op provides to its 400 employees. Personally, I can't think of a worse reason to pursue such an opportunity.

I speak with some authority on this question. For most of The Co-op's 85 years, service on the Board was entirely volunteer proposition and there was no compensation beyond a free dinner at meetings and the opportunity to attend the annual conference of food co-ops. This began to seem a bit ridiculous during my time on the Board given that The Co-op is not a charitable nonprofit but a business (albeit one blessedly lacking in outside, profit-seeking shareholders). So I and my colleagues voted to provide directors with a modest per-meeting stipend.

It was at that point that The Co-op's director of education -- ironically, since retired and now herself a Board member -- began mobilizing the members, who sent so many complaints to the Board that it backed off the decision. And there the matter sat for several years because The Co-op's elected members were no more inclined to vote themselves a raise (albeit one from zero) than politicians are.

Fast forward to 2013 when I was about to leave the Board. Knowing that I would not be benefiting, and thus could not be accused of voting myself a raise, I moved at one of my last meetiings to instruct management to make the employee discount available to Board members. Once I had the gonads to do that, and thus take responsibility for the initiative, the rest of the Board readily assented. Bottom line: I'm responsible for what the Board is currently touting as the first and last of the ten reasons to seek election.

Full disclosure: I briefly reprised my Board tenure in 2017 and 2018, so I did eventually enjoy about 14 months of the 20 percent discount. But there are so many better reasons to seek election. The Co-op is the very embodiment of corporate social responsibility (a label so many investor-owned businesses have cynically usurped) and as a democratically controlled enterprise it is a shining example of empowerment. The grocery business is fascinating and Board service is a free education in how it all works. Directors serving on nonprofit Boards confront the stressful task of fundraising; The Co-op's directors govern an organization with a reasonably reliable revenue stream.

Motive matters. Since roughly 2014, the Board of The Co-op and to some degree The Co-op itself have been riven by internal discord and controversy. With the decision last year to appoint the capable and savvy Paul Guidone to be The Co-op's CEO on a permanent basis, it's possible The Co-op is now again on an even keel. Regardless of who was right and who was wrong as the controversies roiled, surely we can all agree that the Board needs high-minded, service-oriented and thoughtful people -- not people in quest of money.

Here's my second gripe. In a recent post on The Co-op's web page, Paul Guidone wrote about some of the cooperative's plans for 2021. "Few food cooperatives in the United States are in a position to commit to public and government work as ours is," he noted. "This is the reality of financing local and national advocacy in a low-margin business like grocery selling."

Nevertheless, Paul reported that The Co-op will continue with advocacy efforts in 2021 -- work that will focus on "strengthening alliances; supporting housing, transportation, and local food production; and advocating for cooperative businesses at the regional and national level."

Advocacy is indeed an important activity for any cooperative that has the resources to do it, either singly or in combination with other co-ops. But in my respectful opinion The Co-op has its priorities backwards. Housing, transportation and local food production are all key public policy questions, but in each realm there are other organizations with the experience and direct involvement to speak with authority and impact. Hardly anyone -- and, indeed, often no one -- is working to promote co-ops and the cooperative economy in either Concord or Montpelier.

It is a shame that co-ops are so perennially invisible in the two state capitals. As I have been saying for years, co-ops are a unique form of doing business and their purposes are fully congruent with the policy agendae of governors and legislators who seek to retain wealth in-state while using private sector initiative to strengthen the economy and promote justice. State bureaucrats in both New Hampshire and Vermont are typically clueless about what co-ops do, how they differ from investor-owned businesses, and why they deserve distinctive treatment in areas like securities law, labor law, and taxation.

Eliminating that cosmic cluelessness should be the focus of any state-level advocacy efforts by the Hanover Consumer Cooperative Society. Secondarily, particularly on the New Hampshire side of the river, The Co-op should focus on reaching out to the state's biggest co-op sector -- credit unions -- because, right now, the behavior and business strategies of the credit unions of the Granite State are indistinguishable from those of investor-owned community banks. (That's much less true in Vermont, thanks in no small part to the work of the Vermont State Employees' Credit Union.) A cross-sectoral alliance of cooperatives, one that could make its influence felt in both New Hampshire and Vermont, would be a powerful force for social change and economic justice indeed.

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