Board of Directors Meeting Minutes: March 2020 |

Brattleboro Food Co-op Board of Directors

2 Main Street, Room 130, Brattleboro, VT

Monday, March 2, 2020

Directors Present: Mary Bené, Judy Fink, Denise Glover, Grace Koch, Skye Morse, Beth Neher, Tamara Stenn, Jerelyn Wilson. Staff, Shareholders and Others Present: General Manager Sabine Rhyne; Board Administrator Sarah Brennan; Staff/Shareholders Mark Adams, Sheila Adams (UFCW steward)

The meeting was called to order by President Jerelyn Wilson at 5:17 pm.

Meeting Opening: Board members and guests introduced themselves and shared a benefit of being on the Board they would tell a shareholder. Highlights: feeling connected and grounded in a community, observing the care with which people communicate with one another, participating in the inner workings of an organization and its successes and triumphs, working with a mature organization adapting over time, a chance for personal growth. “Being on the Board helps me get out of bed in the morning.”
Agenda Review: No changes were proposed.
Approval of Minutes: Mary moved to accept the minutes of the February 3, 2020 meeting; Judy seconded. The motion to accept the minutes with minor edits passed unanimously.
Shareholder Input and Board Tabling:
1. Board tabling comments: no substantial discussion.
2. The Board reviewed January’s feedback statistics, much in line with previous months’ feedback. Going forward, the Board would appreciate seeing trends or comparisons over time. Sabine noted that NCG has asked us what we are doing that is causing our approval rates to be going up. We believe this is because Jon is sharing feedback with managers and responding to each comment received (when contact info is available).
GM Report Discussion highlights:
1. Diversity, Equity, and Inclusion (DEI): Sabine provided additional detail on upcoming staff training, to be conducted by LaDonna Redmond. It will consist of 8, 45-minute sessions. The April slots are set but March is proving to be a scheduling challenge. Sabine hopes to retain LaDonna for a discussion of “White Fragility” among the management team. Lost River Racial Justice Group has reached out to offer support in facilitating the March book group discussions devoted to it. Jerelyn is hoping that Board members participate in those discussions, after which she intends to engage with the material within a regular Board meeting.
2. Union Contract Negotiations: We have a federal mediator assigned to us for Interest Based Bargaining (if we do it) in advance of negotiations.
3. New HR manager: So far, so good! Sabine is excited about her.
4. Sales: Last week we experienced a significant jump in sales prompted by fears of impending quarantines due to the coronavirus (Covid-19).
5. What is “Forecast compared to budget update”?: the forecast is based on an algorithm that currently projects that we’ll fall short by the end of the quarter.
6. Direct Labor: This measures what percent of our sales go directly to hours that were worked, as opposed to sick/vacation/personal time or holidays. Why do we look at sales/labor/cash, but not cost of goods? The first three are the main drivers for our business. While cost of goods is obviously critical, there is a time lag to pull that information together, which is why it isn’t measured/ reported on as frequently.
7. Telling a story through the numbers: “Sales per labor hour being above our budget tells me that we are selling more stuff per labor hour than we had thought we might, but if we look at labor as a percentage of sales, those labor hours are costing us more.” (Skye)
8. - Senior vs Elder: Elders currently receive 8% off 7 days/week; Seniors (a now-defunct category that was rolled into Elders last fall) used to get 10% off, 2 days a week. With an aging population, we expect that demographic to increase in number.
  - FFA (Food for All): Anyone receiving government benefits is eligible. We have an agreement with Groundworks to vouch for those earning too much to qualify. We should explore partnering with other organizations (such as Senior Solutions) as well, as we do not want to be the gatekeepers.
  - Patronage Dividends: How they’re calculated: It is the Board’s prerogative to declare there will be a patronage dividend if we have a profit. The Co-op would retain 80% of the dividend for internal use. The remaining 20% would be disbursed to shareholders in proportion to their spending, regardless of their age or whether or not they are working members. Note: there is no tax benefit to the Co-op from the Co-op discounts. By contrast, patronage dividends disbursed to shareholders are exempt from taxation.
  - Voluntarily giving up discounts: Anyone can do this at any time; this has always been the case. Just talk to Shareholder Services.
  - Perception of Exclusivity: As always, we need to focus on price sensitivity issues and be mindful of our reputation as an expensive place to shop. As we deal with that and shift that reputation, changes to the discounts lose some of the intensity. Working on price sensitivity is also tied to our intention to be more mindful about the effects of racism and inclusion.
  - Trends in discounts: Employee discounts have gone up and down over time. The recent pre-order arrangement for staff (cost plus 10%) is a very good deal. Working member discounts have been trending downward for years: people have less time and are choosing not to work. And many have transitioned to Elder status.
  - Product Mix: Sabine notes that we have been bringing in more conventional products, the “cleanest” (such as local conventional produce), to bring in lower-priced items. For instance, we’ll be shrinking the natural food cereal section (removing those with stagnant sales) and bringing in more conventional products to be more welcoming to more types of shoppers.
  - Anticipated pushback: “I don’t have an illusion that this will be smooth. I know we’ll have pushback and some people who will choose not to shop here and there will be some sales impact. The savings numbers we give are conservative because of that.” – Sabine.
  - Other Comments: One board member was surprised that Sabine was not recommending that the discounts be removed entirely. Another said, “To me, it’s a 3 point reduction from 8% to 5% and that seems pretty modest. It’s a minority of your discount. But when we talk about the discount going down, and adding conventional items to the product mix, it starts to feel like an erosion. Does this represent “cheapening the brand”? I want to hear ‘the discount is being reduced AND we’re building something else.’ I want it to be offset by something good.” Sabine noted that offering more conventional items could mean that we’re more accessible to more people. “We’ve never been an all-pure, all-organic store. We are a community grocery store and we reflect what people want to find here. We have a broad base in our co-op.”
  - Timeline: This is Sabine’s first draft of proposed changes. She will be seeking input internally – in particular, from Shareholder Services staff. She will present a revised proposal next month. The May/June FFT will announce the changes, which will go into effect with the new fiscal year.
  - Co-op landscape presentation: Sabine’s presentation covered the basic nuts and bolts of the NFCA, NCG, AGNE, and others.Discount Proposal. The proposed changes: Elder and Working Shareholder discounts would go from 8% to 5%. FFA would remain the same at 10%. No word on employee discounts yet. Elder discounts would be sunset after five years. By then we’d be more consistently profitable, and could soften the blow by moving to patronage dividend. Discussion highlights:

Exploratory Conversation: Jerelyn reminded us that Ends are about outcomes: the reasons why we exist. The Board split into three groups and addressed either “Because of all that we do, Brattleboro will have….” OR “If the Co-op didn’t exist, what would be missing for shareholders and the community?” The Ends Task Force will work with the resulting notes to develop next steps.
Board Perpetuation: Upcoming monitoring
1. : Jerelyn called Board members’ attention to the policies being monitored at the April meeting. There was no substantial discussion of them.
2. Policy and Bylaws: Did not meet because Jerelyn was under the weather. She is shooting for a few longer work sessions to tackle their work.
3. Board Member Recruitment: Did not formally meet but met with Mark Adams, and plans to meet with Tristan Roberts. Both will be submitting a statement of interest and both will have attended a meeting. Mary also approached someone she’d seen at the annual meeting who might be interested.
4. Shareholder Engagement: The Board engaged in some wordsmithing of the draft charter. The final version reads as follows:
  The BFC Board acts on behalf of its shareholders, ensuring that the Co-op is a well-run responsive organization that reflects the values and needs of its shareholders. To build and strengthen this relationship, trust and communication between the Board and Co-op shareholders is necessary. The Board’s Shareholder Engagement Committee (SEC) makes recommendations on how the Board can deepen relationships with shareholders to build greater communication, satisfaction and trust. The Charter will be updated on a yearly basis to include specific initiatives the SEC and/or the Board recognizes as pivotal and time-sensitive.
  1. Specifically, the SEC will:
    1. Explore opportunities to educate shareholders about Board activities – to encourage transparency and help shareholders understand the Board’s role in governance.
    2. Support the GM’s efforts in welcoming all shareholders to the Co-op, and explore opportunities to address the needs of a diverse community.
    3. Identify and bring to the Board themes and top priorities in planning special events (e.g., 45^thAnniversary) and the Annual Meeting.
  2. Skye moved, and Beth seconded, to approve the draft charter as stated above. After additional wordsmithing, and agreeing that the existing motion would include these edits, the motion carried unanimously.
  3. Ends Task Force: See Beth if you have questions about their minutes. Beth encouraged all to read the Basic Principles of Policy Governance, linked to in the packet [and subsequently uploaded to the Board’s website].
  4. Reminders: March tabling: Jerelyn and Tamara. May tabling: Mary and Judy. FFT: April: Beth –Already submitted. May: Skye – perhaps something on discounts. Jerelyn encouraged each board member to meet with Sabine individually or in pairs to share their perspective and experience about the discounts and proposed changes to them. She stated that Board members need to be strong in their ability to articulate a rationale that they can get behind.
Open Board Seat: In anticipation of going into Executive Session, Jerelyn asked if anyone had questions for Mark Adams. He will turn in a candidate statement to Sarah.
Meeting Outcomes: Board members shared what they would tell a shareholder about this meeting.
Executive Session: At 8:08 pm, Beth moved and Judy seconded to go into Executive Session for the purpose of discussing how to handle the vacant Board seat. Sabine was the only non-Board member present during Executive Session. At 8:22 pm, Beth moved and Tamara seconded to come out of Executive Session.