Cooperative Report

2003 Board President’s Report for the Hanover Consumer Cooperative Society, Inc.

Independent and Interdependent — Creating Our Future Together

The Co-op is committed to running a profitable and responsible business. We are financially strong and our increasing sales indicate excellent customer satisfaction. The Board of Directors has a fiduciary responsibility to guarantee the financial health of the business, and we take that responsibility very seriously. But the financial health of the organization is only the minimum baseline of Board responsibility. I’d like to articulate some of the work the Board does, above and beyond monitoring our financial performance.


In the early stages of human and organizational development, dependence is inevitable. If they are successful, people and organizations can move from dependence to independence. Independence brings various sorts of responsibility. Here are some of the ways we are trying to be responsible to our members.

Local governance and control. In this era of large conglomerates and remote management, local governance and democratic control are valuable and precious. The Co-op has almost 34,000 individual members who can elect our Board of Directors and vote to modify bylaws on a one-member-one-vote basis. This direct control of the organization provides a solid foundation for our outlook.

Transparent and responsive management. Our books are open, our Board meetings are open, and our managers have an open-door policy. Last year our customer service desks had 146,000 interactions with our members and shoppers. We responded to 1,900 requests for information related to food safety, nutrition, products, wellness, and other issues. We handled 1,300 operational comments and suggestions submitted through the suggestion box, 450 through the web site, and 550 through personal interactions. Because of our local control we view this transparency and responsibility as a benefit, not a cost. The Co-op is unlikely to attempt to “save money” by minimizing customer interaction.

Governance by policy. Our Board governs by policy. This simple statement means that the Board’s actions are predictable and considered. In the best case, policies don’t vary with the transient personalities of the individual Board members. Instead, the Board speaks with one voice and directs the General Manager with as much clarity and flexibility as possible.

Measuring results. Board presidents frequently serve for more than a single year. Often, some long-term work that one president begins is not completed during his or her tenure. Ruth Sylvester began the move to policy governance, which then was solidified and completed under Steve Maker’s leadership. Steve moved us to begin measuring more of the work we do, trying to quantify so many of the important but qualitative aspects of our organization’s value. This proved to be a challenging initiative for both the Board and Management, but we have made progress this year.

Measuring our financial health is relatively straightforward. As a $52 million organization, it may involve a lot of effort, but there are entire industries devoted to specifying the rules and regulations of reporting financial performance. By any financial standard, the Co-op is healthy and stable.

It is much more difficult to measure our Ends Policies. Our Ends define what effect we want to have in the world. It is tempting to simply translate everything into a financial measurement. I even did that above: Customer satisfaction? It must be good because sales are increasing. But our desired effect in the world goes beyond increasing sales or net savings or the patronage refund. The Co-op exists to serve its members, and our members want a diverse and complex mix of products, services, and experiences. Throughout this report, I try to quantify these qualitative aspects of the Co-op, based on information provided by our managers when they monitored our Ends policies. We don’t think we’ve captured everything, and I report here only a portion of what we’re now attempting to measure, but we’re committed to measuring our outcomes, and we expect to improve our quantitative metrics each year.


Once people or organizations have achieved a level of independence, they may choose to create interdependencies that strengthen themselves and their organizations. Some of these “second-order” interdependencies can be intricate and subtle, as in a marriage, or they might be blunt and obvious, as in a business supplier agreement. We are almost always individually and organizationally dependent on others