Decades of research finds that strong governance is essential for cooperatives to thrive. It is correlated with performance, essential for addressing members’ needs, and fundamental to the cooperative DNA. Yet cooperatives have lacked the robust data needed to benchmark, reflect on, and improve their governance practices.
In response to this unmet need, the UW Center for Cooperatives launched the Cooperative Governance Research Initiative (CGRI) in 2021 with generous seed funding from the Cooperative Development Foundation. Its purpose is to generate robust, longitudinal data that empowers cooperatives across sectors to reflect upon and improve their governance structures, processes, and culture.
Key Takeaways from the CGRI 2021 Report
The first CGRI survey yielded enthusiastic responses from 500 cooperatives, capturing substantial diversity in terms of industry, type, size, age, and location, and creating a baseline for the range and frequency of cooperative governance practices. Targeted follow-up interviews generated additional insights.
- On the whole, participating cooperatives believe it is important for members to see their faces reflected in the board and that diversity, in multiple dimensions, is a key component of building an effective board. For many, increasing board diversity in terms of age, gender, ethnic, and racial composition is an ongoing journey and priority in the next three years.
- Cooperative boards face real dilemmas as they strive to balance representation and expertise. Thinking more carefully about practices related to contested elections, term limits, and board recruitment could help many cooperatives both preserve institutional knowledge and welcome new perspectives.
- Developing a culture of lifelong learning is critical for long-term organizational success. Expanding board education and evaluations provide many opportunities for cooperatives to foster a culture of learning and growth through more deliberate reflection and ongoing multidimensional training.
- The commonly held belief that the board develops strategy and management carries it out is increasingly being challenged. Our findings offer insights that could help reframe how we think and talk about the role of the board versus management.
- The CEO plays an important role in a cooperative’s governance system—they provide vision and institutional knowledge, engage with members, and support the board’s functioning in myriad ways. Overall, cooperatives with CEOs who value the cooperative model and engage with the board as a worthy partner are more likely to have healthy governance systems.
- COVID-19 and changing social norms have created unique challenges for building a thriving culture on cooperative boards. Despite these challenges, cooperative boards are finding ways to connect and strengthen their social ties by focusing on essential interpersonal dynamics and activities that cultivate and sustain them.
- The form and content of member participation varies across sectors, but most member concerns are connected to the fundamental question of whether the cooperative’s goods and services, financial decisions, and overarching strategy align with member needs, desires, and values.
Sample Findings
The 2021 CGRI survey focused on the following research question: What is the scope and prevalence of specific governance practices across the cooperative community related to board composition and qualifications; board nominations and elections; board training, education, and development; board meetings and decision-making practices; board compensation; the CEO; member participation; and board culture. Below are some examples of the types of findings you in our report.
Board Composition: Board Tenure
Director tenure is one measure of board experience that can have big implications for how cooperatives balance member voice, representation, and expertise. This graph shows how directors are distributed by years of service.
Board Nominations & Elections: Contested Elections
Overall, 59% of participating cooperatives have not had a contested election in the past three years. The graph shows that breakdown by cooperative type.
Training, Education, & Development: Board Evaluations
A board evaluation is a formal process that assesses the board’s health and performance. Done well, it provides an opportunity for directors to reflect on their personal contributions in the board room and identify areas that need improvement.
Board Meetings & Decision-Making Practices: Meeting Agendas
A well-crafted agenda and skilled facilitation are two essential ingredients for effective meetings. It is most common for the board chair and CEO of participating cooperatives to jointly set board agendas.
Board Compensation: Average Total Compensation
Among participating cooperatives that provide board compensation, the most common types are per meeting payments contingent upon attendance and fixed annual, quarterly, or monthly payments. The least common is an hourly rate.
Board Culture: Healthy Dissent
Participating cooperatives that say their board discussions allow for healthy dissent also say their board does a better job building social and interpersonal dynamics that support governance effectiveness.
