From the Board President
By Steve Maker

Cooperatives in
Modern Society

In 1936, the Hanover Co-op was created to fill an obvious need: good food at fair prices. The cooperative business structure helped to ensure, among other things, that the needs of the co-op member-owners were served.

Sixty-five years later, other stores offer many of the products we do, at prices that appear similar. What now is the value of the Hanover Co-op? In fact, what is the value of the cooperative business model in our society at large?

Let’s start by asking whom the organizational structure is designed to benefit. A shareholder-owned corporation must work to maximize shareholder value or return on invested capital. A co-op, on the other hand, is legally bound to act in the interest of its members, who are the owners. This difference makes a difference!

Many businesses are excellent community citizens, of course, but that is a choice made by the individual business. Some businesses may find that maximizing their return is not compatible with community involvement. Co-ops, on the other hand, have a concern for community built into their structure and practices. It is a part of who they are.

Co-ops also incorporate a strong educational effort aimed at making their members more informed consumers. Our Co-op, for instance, informs us about healthy eating and nutrition as well as a wide variety of other relevant issues.

I’ve only picked out a few of the significant differences between businesses run under the cooperative model and the corporate model, but the synergy among those differences creates a type of business that makes different choices as a matter of course.

On the larger scale, decisions about business directions are made differently. In a member-owned business, the members vote on major decisions. For instance, the opening of the Lebanon store was not suggested in order to increase profits, but to ease the crowding at the Hanover store and provide better service to our members. The members voted on whether or not to open that store, because it was such a significant step for the Co-op. More recently, the land in Norwich was sold to the Dresden school district. The Co-op had turned down many offers over the years for commercial use of that land, because those uses were not felt to be in the interest of the community. Instead, the land remains under community control through the school district.

The Co-op has long had a community giving program. Other stores have community programs, too, but ours springs from the fact that our owners are community members, and this is another way to serve their interests. It’s not an optional program that can be terminated if corporate direction changes. In fact, we are now working to put it on a much more secure footing through the establishment of the Hanover Cooperative Community Fund, with the aim of increasing the benefit to the community while reducing the cost to the members and shoppers.

A tremendous strength of co-ops is their ability to make decisions based on the question "Is this in the best interest of our members?" This can simplify potential conflicts between the desire to maximize return and the desire to serve customers and community.

The Cooperative Principles set cooperatives apart from the more common corporate businesses. While any business may choose to behave in accordance with one or more of those principles, co-op principals are built into the structure and traditions of a cooperative, they are shared with other cooperatives, and the business is evaluated on these multiple bottom lines.

A community that is home to one or more co-ops is very likely to benefit from them. By acting in the interests of their members, cooperatives continue to be important contributors to our communities and society.

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