People's Food Cooperative
Ann Arbor, Michigan

Board Policies

EXECUTIVE LIMITATIONS

April 12, 1999
Last revised 11/17/04


"Traditions are not to be discarded, but built upon.  The Board is creating tomorrow's traditions with the actions it takes today.  Leadership compels us to be true to tomorrow more than to yesterday."

from Boards That Make A Difference by John Carver

 

 

POLICY TYPE:   Executive Limitations

POLICY TITLE:    L - Global Executive Constraint 

ADOPTED:   April 12, 1999

The General Manager shall not cause or allow any operational practice, activity, decision, or organizational circumstance that is either unlawful, imprudent, in violation of PFC's by-laws and Articles of Incorporation, or in violation of commonly accepted business and professional ethics.  All activity shall be for the purpose of achieving Board policies on Ends.

 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.1  Treatment of Members

   
       

ADOPTED:

April 12, 1999

revisions:

3/20/00; 3/17/03; 2/16/04; 3/15/04; 10/21/04; 12/16/04


With respect to interactions with members or customers the General Manager shall not cause or allow conditions, procedures or decisions that are unsafe, undignified or unwelcoming.

The General Manager shall not:

L.1.1

Discriminate in membership based on race, religion, color, creed, gender, political affiliation, sexual orientation, national origin, sex, age, marital status or mental or physical disability.

   

L.1.2

Fail to strive to provide exceptional value and service to our members and customers.

   

L.1.3

Select off-site space for member-invited functions which is not wheelchair accessible or cannot be made wheelchair accessible prior to the function.

   

L.1.4

Fail to maintain a current database of members.

   
 

a.

Database will include member addresses and share payment status.

     
 

b.

Database may be used for mailings of PFC newsletters, ballots, election-related materials and other appropriate PFC communications.

     
 

c.

The Board must authorize any other use of the database.

   

L.1.5

Fail to de-activate member(s) from the data base in the event the member fails to meet his or her responsibility to maintain a current address on file or is delinquent in member share payment.

   

L.1.6

Fail to refund a member's share within 90 days of membership cancellation.

   

L.1.7

Fail to ensure the privacy and security of the member database created by the cash register.

   

L.1.8

Fail to provide an annual patronage rebate, as directed by the Board, based on member purchases.

   
 

a.

The Board shall determine the amount of the rebate and the manner in which it will be returned to members.

   
   

1.

This Board action shall be:

     

1.

taken by the Board prior to the end of the fiscal year, and

     

2.

based upon PFC’s profitability and financial goals.

         
   

2.

The amount of the rebate shall be between 0 and 7 percent of a member’s purchases.

       
   

3.

A portion between 20 and 100 percent of the rebate shall be returned to members in the succeeding year.

       
   

4.

A portion between 0 and 80 percent of the rebate shall be retained for 5 years before being returned to members.

       
   

5.

Rebate payments to members shall be made in the form of checks or store credit.

   
 

b.

The GM shall ensure that each member has the opportunity, at least once annually, to request full payment of the retained portion of her/his rebate.

   
   

1.

Decisions on whether to grant such a request shall be made by the GM and/or the GM's designee(s) based on the following criteria:

     

1.

PFC’s ability to pay without disrupting operations or preventing attainment of financial goals, and

     

2.

the stated financial need of the member.

   
 

c.

Rebates shall not be paid by check for amounts smaller than the check generation and processing costs and, in no case, for amounts less than $1.00.

   

L.1.9

Fail to provide Members the opportunity to volunteer at PFC.

   
 

a.

Volunteer opportunities will have descriptions for positions or responsibilities.

     
 

b.

Training appropriate to the position will be provided.

     
 

c.

Tasks will be assigned appropriate to skill level.

L.1.10

Fail to provide to new members the opportunity to pay their shares in installments.

   
 

a.

A new Class 2 Member may pay her/his share in installments over a period not to exceed 6 months.  An administrative fee of $10 will be charged.

     
 

b.

A low-income member may pay her/his share in installments over a period not to exceed 4 years.

   

1.

Low-income eligibility shall be determined by the GM based on the following criteria: the member is currently receiving Food Stamps; Women, Infants, and Children coupons; Temporary Assistance to Needy Families benefits; and/or Supplemental Security Income.

   

2.

Low-income members shall not be charged an administrative fee for making share payments in installments.

This policy will be monitored internally by annual report from the General Manager in February addressing each of the 10 sub-policies specifically.

 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.2  Treatment of Staff

   
       

ADOPTED:

April 12, 1999

revisions:

2/16/04, 11/18/04


With respect to the treatment of staff the GM shall not cause or allow conditions that are unfair or undignified.

The General Manager shall not:

L.2.1

Discriminate in regards to hiring, promotional opportunity, or compensation based on race, religion, color, creed, gender, political affiliation, sexual orientation, national origin, sex, age, marital or parental status, or mental or physical disability.

   

L.2.2

Allow nonconformance with local, state and federal nondiscrimination laws and regulations

   

L.2.3

Fail to operate without written personnel policies that clarify personnel rules for staff, specifically hiring, firing, evaluation and layoff procedures, access to personnel files and compensation and grievance procedures.

   

L.2.4

Fail to obtain staff input on personnel policies.

   

L.2.5

Fail to encourage staff to make a long-term commitment to PFC.

   

L.2.6

Discriminate against any staff member for expressing ethical dissent.

   

L.2.7

Fail to utilize Staff input and ensure that Staff have a mechanism to be heard.

   

L.2.7.1

In seeking consensus with Staff, the General manager is not relieved of the responsibilities and limitations delineated in other of these Policies.

   

 

 

   

L.2.8

Fail to maintain privacy in employee files.  An exception to this policy may be made to process unemployment claims or prepare for a legal hearing.

   

L.2.9

Prevent staff from presenting a grievance to the Board when (1) internal procedures have been exhausted, and (2) the employee alleges that either Board policy has been violated to his or her detriment or Board policy does not adequately protect his or her human rights.

   

L.2.10

Fail to acquaint staff with their rights under this policy.

   

L.2.11

Allow staff exposure to unsafe, unhealthy or illegal conditions.

   

L.2.12

Fail to provide descriptions for positions or job responsibilities.

   

L.2.13

Fail to provide training appropriate to the position.

   

L.2.14

Fail to inform staff about opportunities to apply for open positions at PFC.

This policy will be monitored internally by direct observation and by an annual report from the GM in June addressing each point.

 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.3  Financial Planning and Budgeting

       

ADOPTED:

April 12, 1999

revisions:

2/16/04


Financial planning for any fiscal year or the remaining part of any fiscal year shall not deviate materially from the Board's Ends policies, risk financial jeopardy, or fail to be derived from a multi-year plan.

The General Manager shall not create a budget that:

L.3.1

Contains too little information to enable credible projection of revenues and expenses, separation of capital and operational items, cash flow, and disclosure of planning assumptions.

   

L.3.2

Plans the expenditure in any fiscal year of more funds than are conservatively projected in that period.

   

L.3.3

Provides less for Board prerogatives during the year than is set forth in the Cost of Governance policy.

   

L.3.4

Is not available sufficiently in advance of the November Board meeting for thorough review before the meeting.

This policy will be monitored internally by annual report from the GM to be presented at the November Board meeting.

 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.4  Financial Condition and Activities

   
       

ADOPTED:

April 12, 1999

revisions:

2/21/00; 1/15/01; 4/23/01; 1/21/02; 12/16/02; 6/16/03; 1/19/04; 3/15/04; 12/31/05

In ongoing financial conditions and activities the GM shall not cause or allow the development of fiscal jeopardy or a material deviation of actual expenditures from Board priorities established in Ends policies.

The General Manager shall not:

L.4.1

Cause indebtedness other than trade payables, without prior Board approval.

   

L.4.2

Fail to maintain a separate account for member shares.  Funds may not be dispersed from this account without Board approval.

   

L.4.3

Fail to settle payroll and debts in a timely manner.

   

L.4.4

Allow tax payments or other government-ordered payments or filings to be overdue or inaccurately filed.

   

L.4.5

Excluding trade payables, make a single purchase or commitment of greater than $15,000 without Board approval, nor fail to inform the Board at its next meeting of a purchase or commitment greater than $5000 but less than $15,000.

   

L.4.6

Dispose of fixed assets with greater than $5000 book value without Board approval, nor fail to inform the Board at its next meeting of disposal of assets with a book value greater than $2000 but less than $5000.

   

L.4.7

Fail to aggressively pursue receivables after a reasonable grace period.

   

L.4.8

Operate without pricing and expense controls consistent with achieving earnings, before interest, depreciation, taxes, and rebates of 2.75% or greater.

   

L.4.9

Fail to maintain current assets of twice current liabilities.

 

 

L.4.1 through L.4.8 will be monitored internally by annual report in February from the GM addressing each point.

L.4.9 will be monitored internally through the summary information from each Quarterly Financial Statement (see Financial Summary Templates 1 & 2 in Appendix) provided to the Board by the GM in February, May, August and November. 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.5  Emergency General Manager Succession

   
       

ADOPTED:

April 12, 1999

revisions:

2/16/04                 


To protect PFC and the Board from the disruption that could result from sudden loss of the General Manager, the General Manager shall designate and train no fewer than two management employees to be capable of managing PFC operations, complying with Ends and Executive Limitations policies, and familiar with Board and GM issues.

The General Manager shall not fail to:

L.5.1

Establish a chain of command to be used should the General Manager be unable to serve (due to planned or emergency absence).

   

L.5.2

Identify said persons to the Board as soon as they are named and require them to attend at least one Board meeting.

This policy will be monitored internally by annual report from the GM in June and by direct observation.

 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.6  Asset Protection

       

ADOPTED:

April 12, 1999

revisions:

3/18/02; 1/19/04

The General Manager shall not allow the Corporation's assets to be unprotected, inadequately maintained, or unnecessarily risked.

The General manager shall not:

L.6.1

Fail to insure against theft and casualty losses to at least 80 percent of replacement value and against liability losses to Board members, Staff, and the organization itself in an amount greater than average for comparable organizations.

   

L.6.2

Subject the store and equipment to improper wear and tear or insufficient maintenance.

   

L.6.3

Unnecessarily expose the organization, its Board, or its Staff to claims of liability.

   

L.6.4

Make any capital expenditure (1) without normal, prudent protection against conflict of interest, and (2) of over $5,000 without obtaining comparative prices.

   

L.6.5

Receive, process, or disperse funds under controls that are insufficient to meet the standards of Board-appointed auditors.

   

L.6.6

Invest or hold operating capital in insecure instruments, including uninsured checking accounts and bonds of less than AA rating, or in non-interest-bearing accounts except when necessary to facilitate operational transactions.

   

L.6.7

Endanger the organization's public image or credibility, particularly in ways that would hinder its accomplishment of the Ends policy.

   

L.6.8

Fail to maintain liability insurance coverage for Directors in the amount of at least $1,000,000 (aggregate and per occurrence).

This policy will be monitored annually by internal report from the GM in February and by independent financial review in March.

 

POLICY TYPE:   Executive Limitations

POLICY TITLE:  L.7  Compensation and Benefits

ADOPTED:   April 12, 1999 Revisions: 11/18/04

With respect to employment, compensation, and benefits to employees, consultants and contract workers, the GM shall not cause or allow jeopardy to fiscal integrity or public image. 

Accordingly, the General Manager shall not:

L.7.1

Change his or her own compensation and benefits.

   

L.7.2

Promise or imply permanent employment.

   

L.7.3

Establish current compensation and benefits that deviate materially from the Ann Arbor natural-foods market for like skill levels.

   

L.7.4

Create compensation obligations over a longer term than revenues can be safely projected, and in no event longer than one year and in all events subject to losses in revenue.

   

L.7.5

Establish or change benefit plans so as to cause unpredictable or inequitable situations, including but not limited to:

       
   

a.

incurring unfunded liabilities,

       
   

b.

providing less than a basic level of benefits to all full-time paid employees (though differential benefits to encourage longevity are not prohibited)

       
   

c.

allowing any employee to lose benefits already accrued from any forgoing plan,

       
   

d.

treating the GM differently from other management employees.

This policy will be monitored internally by annual report from the GM in June.

 

POLICY TYPE:

Executive Limitations

   
       

POLICY TITLE:

L.8  Communication and Support to the Board

   
       

ADOPTED:

April 12, 1999

revisions:

4/19/04; 12/14/05


The General Manager shall not permit the Board to be uninformed or unsupported in its work.

Accordingly, the General Manager shall not:

L.8.1

Neglect to submit monitoring data required by the Board (see policy on Monitoring Executive Performance) in a timely, accurate and understandable fashion, directly addressing provisions of the Board policies being monitored.

Reports should be self-contained, with all information needed by the Board to make a determination.  They should respond to the policy as written, including the actual policy wording, the GM’s interpretation of the wording, a statement of compliance or noncompliance, and all necessary data and argument to support the GM’s statement. Comments and suggestions are welcome and encouraged as long as these criteria are met.
   

L.8.2

Fail to advise the Board of relevant trends, anticipated adverse media coverage, and material external and internal changes, particularly changes in the assumptions upon which any Board policy was established.

   

L.8.3

Fail to advise the Board if, in the GM's opinion, the Board is not in compliance with its own policies on Governance Process and Board-GM Linkage, particularly in the case of Board behavior that is detrimental to the work relationship between the Board and the GM.

   

L.8.4

Fail to marshal for the Board as many Staff and external points of view, issues and options as needed for the Board to make fully informed choices.

   

L.8.5

Present information in unnecessarily complex or lengthy form.

   

L.8.6

Fail to provide a mechanism for official Board, officer, or committee communications.

   

L.8.7

Fail to deal with the Board as a whole except when fulfilling individual requests for information or responding to officers or committees duly charged by the Board.

   

L.8.8

Fail to report in a timely manner an actual or anticipated non-compliance with any Board policy.

   

L.8.9

Fail to supply for the consent agenda all items delegated to the GM yet required by law or contract to be Board-approved along with monitoring assurance pertaining thereto.

   

L.8.10

 

 

L.8.11

 

 

L.8.12

Fail to comply fully and in a timely manner with the Board request for a survey of the membership.

 

Fail to make every effort to raise issues requiring Board decision in a timely fashion so they can be considered in regularly scheduled Board meetings.

 

When requesting emergency between-meeting Board decisions, fail to supply all options and information necessary for careful decision making, nor fail to record and clarify responses to such requests before taking action and present a supporting document for the next regular Board meeting agenda.

This policy will be monitored annually in January through internal report by the General Manager.

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