Why do co-op
boards sometimes

By Jean Freeman, President
Jean Freeman & Associates, LLC

Editor’s note: The author is a Fairfax, Va.-based consultant who
has experience working with cooperatives and nonprofits on
governance and other issues.

f you’ve ever served on a board of directors or worked for a cooperative with a board of directors, you have probably noticed there are times when board members tend to move away from the lofty role of oversight and into the operational side of the organization. It happens. But why?

I believe one key reason is that the generous volunteers who agree to serve on a co-op board often come from successfully managing a farm or other business. These board candidates are often identified because of their success in business. They may have gone to school to learn how to operate a business and they have likely spent years honing those management skills.

But very few of us ever get any formal education in the art of governance. Even when someone is elected or appointed to a board, he or she is not likely to receive adequate training in board governance. Most of us have learned good governance through trial and error, and reading the occasional book on the topic.

A board member’s “comfort zone” usually lies within the world of operations and administration. A friend of mine who has served on a cooperative board for a few years, recently said: “Ask me to discuss the merits of purchasing a new digital copier and I can weigh in pretty quickly. But if you expect me to engage in a meaningful discussion about changing the organization’s mission, I’ll have to get outside of my comfort zone and think strategically. I certainly can’t rely on my past experiences. It’s tough work!”

Another reason board members micromanage could be that governance requires, by its very nature, a long-range focus. Operational issues are frequently resolved quickly and results can be realized right away.

But strategic issues can only be realized over time. Most strategic plans are designed to be measured over two, three or more years. There just isn’t the immediate gratification we desire.

There are two extremes every board must avoid becoming: (1) The Rubber Stamp Board and (2) The Managing Board. If a CEO is unsure of his or her actions and frequently brings operational issues to the board table for affirmation, the board might find itself “forced” into managing. The opposite can occur when a CEO moves beyond management and begins to direct the organization, taking on the role of the board. At this point, some boards — unsure of their own role — begin to put their stamp of approval on whatever is brought to the table by the CEO. Obviously, neither of these extremes is going to be in the best interest of the co-op.

A board is micromanaging if it: These are just a few examples. Do any of them sound familiar?

So, what can go wrong if the co-op board engages in micromanaging, or managing at all?

One pitfall is that board members will use up valuable time and energy on management and not have enough left to do the critical job of governing. In terms of time, if your board meets for three hours each month, that’s a total of 36 hours for the entire year. If even a few hours are misspent, there aren’t many left to do the lofty work a co-op board must do for its members.

A CEO who recognizes this kind of overstepping should discuss it with the board chair in hopes that, together, a solution will be found. If you are a board member and some of this sounds familiar, it’s time to bring the topic of board/staff roles to the table. It is helpful if board and staff are regularly reminded of their roles and how to effectively communicate with one another.

March/April Table of Contents