Struggle over Solidarity in North Carolina

Solidarity co-ops -- sometimes referred to by the more clunky title of "multi-stakeholder co-ops" -- are the wave of the future.  A solidarity co-op is simply a cooperative with more than one class of member-owners.  A great example is the emerging Maine Farm and Sea Cooperative, which has three distinct classes of member-owners (workers, producers and consumers) and was created for the purpose of competing for contracts to provide food service at campuses of the University of Maine System.

But the solidarity concept appears to have hit a bump in the road in North Carolina.

The Durham Co-op Market, a cooperative grocer whose doors have only been open since March 2015, modeled its bylaws after the Weaver Street Co-op, the venerable cooperative grocer from Carboro, North Carolina that has long been a solidarity cooperative co-owned by a class of consumer-owners and a class of worker-owners.  The Board of the Durham Co-op had plans to ask the membership at the Co-op's November 8 annual meeting to revise the co-op's Articles of Organization to eliminate the worker-owner class.

A local news web site, Bull City Rising, published a story that was critical of the proposal and the board's stated rationale, which is that joint worker-consumer ownership is "not considered a best practice among co-op grocery stores."  The Board then withdrew the proposal but, according to another news account (this one from the publication Indy Week), it's far from dead.  According to the Indy Week story, "board members say they'll bring it back for discussion at some point down the road, following conversations with the co-op's employees and owners."

This particular solidarity model is not one that contemplates truly joint control.  The two North Carolina co-ops are not required to divide the surplus equally between the worker and consumer member classes, and in each instance the Board is constituted in a fashion that assures the consumer-members will control the majority.  Specifically, the workers can elect a maximum of two Board members, the consumers elect six and the entire Board can appoint up to five non-elected members.

Both news accounts attribute the advice to end worker-ownership, on the ground that it is not a best practice, to the CDS Consulting Co-op (CDSCC), which is a national group of affiliated consultants who (among other things) provide governance advice to co-op boards through its CBLD (Cooperative Board Leadership Development) program.  Commonly but erroneously referred to as "CDS," the CDSCC traces its roots to Cooperative Development Services -- the actual CDS -- a nonprofit based in St. Paul, Minnesota.

There's a celebrity angle here, at least if you are a public radio fan.  The Board president at the Durham Co-op Market is none other than Frank Stasio, formerly a familiar voice as an NPR newscaster and host who now works as an on-air personality at the NPR affiliate WUNC. 

In this instance, the journalist is at the heart of the story.  The Indy Week story attributes to Stasio the claims that joint worker-consumer ownership is "untenable," that ditching joint ownership was recommended by the CDSCC, and that the proposal is related to the board's decision at the suggestion of the CDSCC to use the Policy Goverance model.  Indy Week further attributed to Stasio the idea that Policy Governance involves "delegating management of daily operations to [the co-op's] general manager rather than an overly meddlesome board of directors" and that "[i]ssues will arise if the board micromanages such an organization -- and having workers on the board will lead to more interference."

Stasio is also in something of a public disagreement with the Weaver Street Co-op about whether the folks at Weaver Street would similarly like to end many years of joint ownership.  According to Indy Week, Stasio said "Weaver Street Market leaders have personally acknowledged to him the difficulty of navigating the inevitable clashes and conflicts of interest that accompany such a model."  However, the story added that"Weaver Street officials declined to confirm or deny Stasio's comments" and Curt Brinkmeyer, chair of the Weaver Street board of directors and himself a worker-owner at that co-op, called worker-ownership "an essential and valuable part" of the Weaver Street co-op.

The he-said-she-said component of the story is something the journalists and local bloggers can sort out.  The underlying issue, however, deserves further attention in the cooperative community.

Is joint worker-consumer ownership inconsistent with Policy Governance?  Absolutely not.  A persistent myth about the governance model invented by Atlanta consultant and author John Carver is that there exists a certain realm of information and authority -- dubbed "operations" -- that is off-limits to the board.  In reality, nothing is off-limits to a Policy Governance board.  It's true that the model points boards in the direction of vesting as much discretion as possible in their co-ops' professional managers, but it also counsels boards that they should sharply limit such discretion in appropriate circumstances while precisely defining the results that boards expect of their management.  Moreover, the idea that employees on a co-op's board is prescription for management interference is belied by the existence of a growing and vibrant worker co-op sector -- co-ops whose boards are constituted 100 percent by employees.