Four Pillars of Cooperative Governance

In the January/February 2014 issue of Cooperative Grocer magazine, we introduced the Four Pillars of Cooperative Governance as a model for the co-op sector to steer our cooperatively owned enterprises toward economic, social, and cultural success. It is the culmination of many years’ work with co-op boards of directors, seeking to answer this question: How can co-op governance ensure the success of the cooperative as an association and a business?

The Four Pillars model is not about changing systems; rather it is a new way of making sense of cooperative governance. We think it addresses current gaps in strengthening owner relationships and democratic practices that are not clearly part of other business or governance models. 

To review, the Four Pillars (see illustration) are:

Teaming: successfully working together to achieve common purpose.

Accountable Empowerment: successfully empowering people while at the same time holding them accountable for the power granted.

Strategic Leadership: successfully articulating the cooperative’s direction/purpose and setting up the organization for movement in this direction.

Democracy: successfully practicing, protecting, promoting, and perpetuating our healthy democracies.

Co-op boards are different from the boards of investor-owned corporations or nonprofits. Co-ops are organized to benefit their owners and are expected to manifest cooperative values and operate within the guidelines of the co-op principles. A model is a way of framing so that the parts and processes make sense.

In this article, we are going to focus specifically on how the model can be useful to the work of the cooperative board of directors.

Using the Four Pillars of Co-op Governance

There’s a lot to keep track of on a board, and the board’s job can feel big and complex. The Four Pillars helps boards organize their work, and the perspective it provides helps boards put things into balance. Are there areas that could be improved or strengthened? The Four Pillars can help boards identify those matters. Conversely, the Four Pillars can also be used to demonstrate to boards their areas of proficiency, giving boards a more holistic view of their productivity, so that they can devote more time to other areas that might need their attention.

Albert Einstein said that if he had an hour in which to solve a problem, he would first spend 55 minutes determining the proper questions to ask and only five minutes solving the problem. This seems like an apt analogy for productive board work. In order to most effectively use the tools of the Four Pillars, we think it’s important to understand the underpinnings of preparation and development—allowing directors to ask the critical questions—that give this model its strength.

Three important uses of the Four Pillars model are: conceptualizing the whole of the job, planning for excellence, and assessing progress. 

Conceptualization

Conceptualization is the ability to see the big picture and how the whole connects to its parts. In group work, some people are good at envisioning the big picture, while others mostly see things in their individual parts. Some people are action-oriented, eager to dive in regarding what steps to take. Others need to see the whole path before getting started. One of the benefits of the Four Pillars model is that it helps boards get a full view of how each segment is connected to the co-op’s goals, therefore better utilizing the abilities of the whole group.

People think and learn in different ways, and the Four Pillars model also allows for greater diversity of people and their approaches to the thinking process—something that is highly sought after in dynamic boardrooms—because the co-op’s vision can be so easily connected to the Four Pillars. If the board’s overall goal is the success of the co-op, and directors understand well their role in contributing to it, then board work adds a great deal to the organization’s ability to put its values into action.

Planning

Where do you want your board to be next year? A better question may be: What will take your board’s work to the next level? If you want to excel at governance, then having a plan for how to achieve it is a good starting point. A plan will give your board a focus for its chosen intentional actions.

Planning is not just starting with a blank piece of paper and brainstorming what’s next. It’s certainly possible to plan that way, but a more efficient approach is to understand your current situation and build upon it. For example, within the Four Pillars, boards evaluating their democracy pillar might begin by asking what they need to do to understand and articulate the democratic nature of the co-op. Let’s say a board concludes it needs more member-owner engagement, and one piece of that is for the board to change its approach to the co-op’s annual meeting, with the goal of building shared alignment and creating greater transparency. Planning with the Four Pillars as a foundation will help boards consolidate what they know, what they can do, and develop a plan to carry it out.

Assessment

Assessment is the baseline for any strategic work, and it is closely tied to planning. Almost all good planning processes begin with some kind of assessment. What are we good at? What could be improved? Assessment is a critical part of improvement and is a necessary tool for developing plans. In order to move forward, we need to know what knowledge, capacity, and skills we have in order to fill in the gaps and get the critical tools and support we need.

The Four Pillars framework was created to give co-ops a constructive model for assessing themselves. The importance and practical usefulness of this aspect of the Four Pillars cannot be overstated.

Tools of the Four Pillars

After we understand the organizational expediency of the Four Pillars, how is it put into practice? What follows is an overview of how different tools developed by the CDS Consulting Co-op work synergistically—so that boards can gain greater insight, via their own process, for how to strengthen the Four Pillars within their own co-ops.

Shown above is a blank Four Pillars role worksheet, which can be used to describe the board’s responsibilities, processes, skills, and needed resources for each pillar in the cooperative governance framework. On the next page, within each pillar we identify the board’s roles and responsibilities, the processes to utilize to fulfill those responsibilities, skills and characteristics needed in directors, and tools and resources to assist in meeting the responsibilities carrying out the work of that pillar. 

We start with Teaming, because being able to work together effectively enables the rest of the work. With good communication and board process, successful and accountable empowerment is then possible. With adequate teaming and accountable empowerment, the board has the ability to become strategic leaders and to help the co-op demonstrate robust democracy. The pillars are all interlinked on a foundation of the cooperative principles and values.

We’ve filled in this worksheet in an attempt to assist boards with using the Four Pillars to improve their work. As an orientation to this worksheet, following are comments on the first column, the board’s pillar of Teaming. 

As it shows, if a board wants to improve its responsibility of perpetuating board excellence, it could focus on the processes of orientation and training. That might lead a board to develop its communication skills using servant leadership resources. Or if a board wants to develop its responsibilities in strategic leadership, it might use the processes of education and building wisdom using the tool of safe strategic conversation to increase its skill of foresight. To further explore the possibilities see, the full worksheet found with this article. 

The board development team at CDS Consulting Co-op will be further exploring uses of the Four Pillars over the next year in its monthly newsletter, Connections. (Sign up at http://tinyurl.com/ldq27kj.) Additionally, the CDS Consulting Co-op is creating an assessment tool for each of the Four Pillars areas, in order to give boards a good way to evaluate
where in the Four Pillars they are strong and which areas need more attention. 

The Four Pillars assessment tool has multiple uses—it could be used as preparation for the annual board retreat, establishing better board communication and coaching, used as a scan for board-leadership development, or newly formed groups could use it to evaluate their skills and increase awareness of teaming expectations. The tool can be used by the board chair, the whole board, or even the whole co-op as a way to gauge the co-op’s “health” or “balance.”

Boards moving forward

Boards often think of strategy from the operational point of view—how things are carried out—rather than from a stewardship or governance viewpoint. The Four Pillars model is a visual touchstone for how a concrete focus on critical responsibilities within each particular pillar touches all stakeholders, from the board to the co-op’s management and staff and the owners. Each point on the pillar recognizes a place for their participation in the process. Each group is dependent upon the others to contribute to the co-op’s vision and plays a part in its success. 

Co-ops are already doing a lot of this important work, often without even recognizing or naming it. We have already seen how co-op governance has been transformed by focusing on accountable empowerment and establishing better relationships with our constituencies. By applying intention and focus to these actions, our co-ops can achieve so much more. 

As George E. P. Box said, “All models are wrong, but some are useful.” We know that governance can seem more complicated than the simple elegance of the Four Pillars in the model. But we think the Four Pillars will be useful for cooperative leaders as they work together effectively, rooted in the cooperative principles and values, on behalf of the member-owners and while empowering management, to provide strategic leadership for the success of the cooperative. 

By planning their development and governance based on the strengths of cooperative business practices, what co-ops achieve could be beyond our former dreams. Globally, this positive framework has been expressed in the International Cooperative Alliance “Blueprint for a Cooperative Decade,” which intends to take the cooperative way of doing business to a new level by 2020; see: http://ica.coop/en/blueprint-co-op-decade.

As our cooperatives look to extend the values of cooperation to more and more communities through growth and service, we think co-ops should be at the forefront of owner participation and economic democracy. The remainder of this cooperative decade promises to be exciting, as co-ops begin to realize more of their potential as democratic, participatory organizations. We are all connected through the values of cooperation—and that is the beauty and the power of the Four Pillars of Cooperative Governance model. 

Thanks to Patricia Cumbie for assistance with this article.