The role of the ag retailer has always been one of trusted partner to customers, helping them navigate changing technology, products and consumer preferences, in addition to many more factors. As our industry is rapidly evolving, one way we keep up is by utilizing the power of the cooperative system to guide best practices for governance models.
“Change is constant,” said Charlie Johnson, Board Chairman of Central Farm Services (CFS), an ag retail co-op serving Minnesota and Iowa, “Whether you’re talking about the markets or the weather — day to day, week to week — in agriculture we deal with change all the time.”
CFS CEO Merlyn Kruger agreed: “There is no status quo anymore. If you’re at ‘status quo,’ you’re going backwards. Producers need to stay ahead, so we do, too.”
The constant need for change is one reason CFS collaborated with Land O’Lakes Member Relations Ag, in partnership with the Land O’Lakes Governance team, to develop and co-facilitate a 2.5-hour virtual session with their board, focused on refreshing their approach to representation. It’s the first module of a new serial program called Governing for Excellence.
“For a long time, our team had been thinking about creating a workshop to answer common questions about governance and representation, for instance, do we have the right number of board members? Do we represent our member-owners appropriately? Do we represent our business diversity?” said Gene Traxler. Traxler and Naomi Mangold represented Land O’Lakes Member Relations Ag in the initiative.
Traxler added, “When we learned CFS was looking for support around this topic, we teamed up to develop the Governing for Excellence representation module. CFS was kind enough to let us label it a pilot.”
And so, the module was born as a way to set a standard of excellence for the future of ag retail, starting with board representation. But it wouldn’t be a one-size-fits-all approach. It would be fully informed by CFS’ business, their footprint and their board members’ sentiments and beliefs.
“We conducted a survey of the board members in advance and worked closely with Charlie and Merlyn to develop the questions. The survey was definitely key to success, as it gave us the ability to tailor the module,” said Traxler, “We actually got to discuss the anonymous survey responses as a group, which gave everyone a chance to speak their opinion and listen to everyone else.”
Another tool the Member Relations Ag team used to tailor the session was a mapping software. Using the software, the team mocked up different redistricting scenarios for CFS, based on their sales or equity, so their board could visualize and discuss the potential for each scenario. The Member Relations Ag team worked to ensure the session included industry-wide best practices — even some examples from successful cooperatives in other industries.
“Land O’Lakes had the ability to bring us more benchmarking data,” said Johnson, “They had done a tremendous amount of homework.”
The Governing for Excellence representation module examines experimental representation mapping and examples like this one from an electric cooperative.
Since participating in the module, CFS has made changes, including redistricting to help balance their representation across their footprint. Another effect of the conversation was less quantitative, but every bit as important: bringing their board closer together to discuss challenging issues and usher their co-op into the ever-changing future.
“It’s not an easy conversation to start,” said Johnson, “We touched a lot of people’s hot spots with the subject of board representation, but we did well with the guidance. It was emotional — and multi-directional. Sometimes that’s what it takes to bring people together.”
Overall, CFS reports a positive experience with module 1 and is looking forward to module 2, on the topics of selection and succession.
“Governing for Excellence has been a success for us. Ag Member Relations have the people who understand the ag business and know how a board of directors should function. [Member Relations Ag representatives] Gene and Naomi all have years of experience in ag and in cooperatives,” Kruger said, “And they were willing to take the time to understand us, our board and where we wanted to end up. That’s what lent itself to a productive session and helped give us good guidance and direction.”
Traxler added, “We’re excited about what this could mean to other co-ops evaluating their governance. This is not a simple process. That’s why we are here to help navigate the process.”
If your co-op has questions about board representation, or general questions about how co-op governance practices can help or hinder in a changing industry, reach out to your Member Relations Ag representative or email email@example.com and ask about the Governing for Excellence program.