Adam Schwartz, founder and principal of The Cooperative Way.
Adam Schwartz, founder and principal of The Cooperative Way. (Photo courtesy Adam Schwartz)

Electric cooperative folks understand what it means to be in a 24/7 business. While individuals do get time off, the business never closes, never stops offering the vital services our members rely on.

When Federated Rural Electric Insurance Exchange introduced its “Culture of Safety” program about a decade ago, it was an effort to emphasize that the 24/7 mentality applies to safety issues. No co-op can ever check the box and say, “We completed our safety program.” It’s a permanent, ongoing concern. And if we lose focus, we slip backwards.

I think it’s time we emphasize that the same level of intensity applies to our governance practices.

As I look at the electric cooperative industry today, I see unprecedented churn and change in nearly every facet of our business. It goes without saying that in such circumstances, the organization needs to adapt and evolve to meet the challenges.

This is no less true when it comes to governance.

Fortunately, every NRECA and CFC voting member now has access to an excellent conversation starter on the topic: the recently released Electric Cooperative Governance Task Force Report.

This thoughtful, comprehensive document addresses numerous details of co-op governance and offers observations and comments intended to spur discussion and, if needed, action. Topics include director qualifications, nominations, elections, compensation, board composition, meetings, and member access to information.

The task force, which I was honored to present to, was composed of 20 individuals from across the country. Directors, CEOs, and other leaders from distribution, G&T, and statewide organizations all had a seat at the table. The report was released in February and is available on cooperative.com.

I’ve seen many reports, analyses, and, in my opinion, criticisms of co-op governance over the years. I can tell you, this study is a refreshing, thorough, and honest look at the modern governance issues we all face. It goes to great lengths to avoid mandating any one governance method, dictating any best practices, or setting industry standards. It acknowledges that electric co-ops may agree or disagree with the task force, but it emphasizes that our industry and our membership are changing, and our governance practices must keep pace with those changes.

One example I thought of while reading the report: When cooperatives were first founded, and the consumer base for most co-ops was limited and local, it made perfect sense to require members to vote in person at annual meetings. Now, with larger territories, busy members, and the availability of mailed or electronic ballots, such a practice might seem old-fashioned or, worse, could be seen as an attempt to limit participation.

There are dozens and dozens of other board functions that this report will help you identify and analyze. In the end, the question for each is a simple one: “What change, if any, is in the best interest of the co-op and it members?”

When a co-op manages its governance well, it becomes second nature, like safety and reliability.

If governance gets off track, the consequences can be costly in terms of time, money, lost opportunity, and damaged reputations.

The good news is most governance failures are avoidable. Humans cause them, and humans can prevent them.

Adam Schwartz (@AdamCooperative) is the founder of The Cooperative Way, a consulting firm that helps co-ops succeed. He is an author, consultant, educator, speaker, and member-owner of the CDS Consulting Co-op. You can email him at aschwartz@thecooperativeway.coop.

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