let's build a cooperative, step 9: convene your first board meeting

Welcome to Step 9 of my 10-part series about starting a cooperative! I'm racing through these final steps because I have a big announcement I'll be making in Step 10. Before we dig into convening our board, let's have a quick recap of the steps that have come before. In Step 1, we brought our future co-op members together for the first time. Step 2 is where we imagined what our future co-op could look like. For Step 4 we planned how we'll resolve decisions and conflict. In Step 5, we started testing how realistic our plans were. For Step 6 we wrote a business plan and determined how much funding we'll need. In Step 7, we decided which roles each member would take to start and which we still needed to fill. And finally in Step 8, we had our first Annual General Meeting (a true milestone for any co-op). And here we are, in Step 9, convening our first Board of Directors meeting. Let's go!

The table of contents:

• start the future: launching a cooperative
• start the future: building a cooperative

Building a cooperative: step by step guide

1. Collect information, clarify needs, and assemble your founding members.
2. Discuss needs and vision; coordinate organizing and business research.
3. Consolidate a clear vision.
4. Design your decision-making process.
5. Conduct a feasibility study.
6. Create a business plan.
7. Define roles.
8. Convene your first cooperative owners meeting.
9. Convene your first board meeting.
10. Begin operations!

Note: this blog post is not a substitute for legal advice. If you need legal advice, please consult... a podcaster? I don't know anymore.

not a bored meeting

I gleaned today's step from a single resource: the USDA's guide on starting a cooperative. It seems to have disappeared from the USDA's resource page. Lucky for me, it's still available on the Internet Archive! Feel free to check it out unless the Internet Archive also disappears.

The USDA's guidance consists of a single paragraph. But a lot happens at the first board of directors' meeting. Here's what they say: directors vote on officers of the board and establish committees. They also begin the work of co-op governance, deciding how to carry out the business plan. Depending on the org, they can also launch a fundraising campaign and recruit new members. As I discussed last time, some co-ops will hire a business manager to handle operations. The board can craft that hiring process and then bring them on... board? No, no, they're staff. Never mind.

How will our board guide the cooperative? Co-operatives First describes two types of boards in their helpful guide. A cooperative with a very large staff usually has a policy board. This means that the board of directors create policies but leaves the operation to staff. They usually make big-picture strategic decisions about the direction and health of the co-op. In a working board, the directors are much more hands-on. They make decisions about the co-op and then carry them out. Boards of directors start to lose effectiveness after more than 9 people. Having a smaller board can make it hard to carry out all the duties of a board. If a co-op has about this number of members, all the co-op members serve on the board.

Directors on all boards spend time reacting to the problems their organizations face. But Co-operatives First advises that board members should be forward-thinking, too. They need to ensure that funds are being spent well and prepare for our future. They need to ensure that our strategic plans align with our values and the goals of our members. They're usually the ones to draft policy or give guidance on work processes. Board members also represent the cooperative to the public. They engage the members, look for new funding sources, and tell the public how great we are.

These responsibilities are huge, especially for a consulting cooperative just starting out. We will likely not be large enough to elect our own slate of board members when we launch. Small cooperatives usually list every co-op member as a board member. Our working board may have meeting where we talk about the business, as members. We may have other meetings to discuss our long-term strategy and goals, as directors. Or we could combine these! Either way, I'd suggest a checklist of items that we need to cover, both as members and as directors. We don't want to miss anything critical while we're wearing so many hats.

nothing up my hat

Kathryn Sedo at my faves the NWCDC dives deeper into the responsibilities of being a director. Board members at many organizations get their role as directors wrong. They think they're supposed to focus on profit above all else. In a co-op, the board must first address members' needs and balance conflicting interests. Sedo writes that all board members have a "duty of loyalty" to their organization. This is especially true in a cooperative, where owners share profits with each other.

All businesses must follow rules around self-dealing. This is a type of conflict of interest. For us, that might mean individuals can't do work that would've gone to the cooperative. I've been thinking about this one a lot in the context of a consulting cooperative. For me, as one member, of a hypothetical co-op, I don't want to shut down Future Emergent (I'm accepting clients, fyi!). But if I'm a member of this cooperative, how do I decide which business gets the work?

Sedo writes that this is something the cooperative's owners can and should decide. For example, if the cooperative decides not to accept a job, a director or member could pursue it instead. But a co-op deciding not to take a job could itself be sticky. Is a job out of scope if a member has the experience we need to take it on? If we decline to work with a client because of our values as a co-op, should we allow a member to do it instead? Maybe we decline jobs that are below a certain dollar amount. Or if the job is small enough that one person can do it solo. We could decide a member could take a job themselves if they don't use co-op resources (like a shared zoom account). But then again, are those subscriptions an advantage of membership? If so, should the co-op get a cut of the profitw? What if a member also has a solo consultancy but they do work for a client of the cooperative? Are they stealing our co-op's client? What if the member worked with that client beforehand? Should members even get to do consulting work apart from the co-op? This is starting to feel like splitting hairs, but these scenarios feel very possible to me. How will we handle them?

case study: Recreational Equipment, Inc. (REI)

REI is for sure the earliest cooperative I knew about. My dad has a membership there. For years I pretended to be him to get the store credit dividend at the end of the year (thanks dad). When Jamie and I moved to Seattle we lived near the flagship store, a huge building with a climbing wall inside. During the pandemic, employees at the SoHo REI store in New York City voted to unionize. Employees had grown tired of management cutting hours. Bosses would understaff the store after holidays and kept staff wages low. REI headquarters could have lived out their values as a progressive, worker-supported cooperative. Instead, they chose not to accept the union. They hired a notorious union-busting firm. They gave raises and better benefits to every store except the ones that unionized. They also flooded stores with anti-union propaganda. That's around the time when I stopped shopping there. There are now 11 REI locations across the u.s. where staff have voted to unionize.

Union members continued to raise awareness about the need for and value of a union. After all, REI has made a name for itself by choosing its people over profits. They close every year on Black Friday, even though doing so must have some impact on their revenue. But the company fought against fair wages and improved employee safety for years. Meanwhile, their revenue last year was more than $3.5 billion.

Here's where we pick up the connection to this step. In 2025, pro-union forces asked REI to nominate two new board members. Both members were pro-union and support climate change prevention efforts. Instead, REI nominated 1 and renominated 2 board members with anti-union records. At REI, every customer has the choice to become a member, and most do. Every member votes on the nominees for the board of directors. The REI Union and activists encouraged members to "withhold" approval of these candidates. At the Annual General Meeting in May, all three nominees failed the vote to join or rejoin the board. This was a huge victory for the Union, and REI knew it. They chose not to renominate any of their board candidates and will instead find new ones.

Since the failed board election, REI leadership has gone even further. Last month, they reached an agreement with UFCW and RWDSU. These are the two unions representing REI employees at the 11 unionized stores. Both sides agree that this is progress towards recognizing the union at stores that have one.

how to cooperate

REI had more than 23 million lifetime members in 2023. That's quite a leap from the 25 members who founded the cooperative in Seattle. A board of directors is essential for a large retail cooperative like REI. A tiny consulting cooperative, by comparison might not need one—or not yet. If we were to grow, or even expand our membership much past 9 people? A board of directors might be the best way to move forward. By then, I'm happy to say we'd have plenty of thinkers on board to figure out how we do it.

Thank you for continuing to read my foray into cooperative theory. I'm super excited to tease an announcement coming in the next and last installment of this series. When we get into Step 10, I'll share my plans for making our cooperative a reality! 🤯 Until next time.