What should transparency mean at our co-op? There’s not necessarily a simple answer to that. Transparency occurs on a spectrum. But at the moment, we’re finding out what it means in practice.
At the May meeting of the board of directors, several owner-members made a request in writing for figures on managerial salaries. That request was denied. The request was made in the context of living wage issues. In recent months, many members had been surprised to learn that starting pay for hourly workers at River Valley was barely above the state minimum.
Below is the follow-up request from a number of owners, including the owners on ItsOurCoop.org’s organizing team, other owner-members, and several owner-workers. Setting aside the original request for information, our interest right now as owners is the rationale for denying it.
We should note that Whole Foods’ practice of transparency on wages and salaries, which we cite in the letter, is internal — the information is shared among employees. But isn’t it hard to argue at a co-op that the same transparency should not be available to owners as well? As Whole Foods CEO John MacKey is quoted as saying, “If you’re trying to create a high-trust organization, an organization where people are all-for-one and one-for-all, you can’t have secrets.”
Update, 8 August: After a prompt from one owner, the board responded in writing on August 5th, without actually answering the specific questions about transparency. That text is below our letter. What do you think?
Update, 2 September: See our follow-up story, “Exploring Our Co-op’s Transparency, Round 2.”
12 July 2017
Dear board members,
At the May meeting, several owners requested financial information regarding management and staff compensation. You replied in part, in writing, as follows:
Your request for shareholder records exceeds the scope of records included in Article 2, 2.5 Access to owner information and fails to provide sufficient basis to permit disclosure of the requested information to a co-op owner.
Consistent with MA law, we consider shareholder records available by request under this article to be documents such as audited financial statements, approved board meeting minutes, and Co-op Owner Annual Meeting Minutes…. If you have a reason to need any of these records, please submit a request specifying which documents you are requesting and the specific purpose for the request and we will consider it.
However, please note the actual wording of Bylaws Article 2.5, in its entirety:
Upon written request member-owners shall be provided access to the specified books and records of the Co-op within two weeks.
There is no requirement here to “provide sufficient basis.” Transparency appears to be the intended basis, as the founders must have agreed befit a co-op.
- The 2010 policy manual, which can be found in the employee break room, does in fact cite the general manager’s salary [along with that of department heads –ed.], presumably in keeping with the “open book management” adopted by the co-op. Why has the practice since changed?
- Even Whole Foods is transparent on employee salaries all the way up to CEO level, and has been since 1986. (See businessinsider.com, “Here’s Why Whole Foods Lets Employees Look Up Each Other’s Salaries,” March 3, 2014.) How is it that our co-op is not at least as transparent as this major competitor?
- Are you suggesting that MA law overrides the transparency stipulated by the bylaws? Please share the specific MA laws you cite for withholding this information that our bylaws stipulate “shall be provided.”
Board response, August 5:
Please accept this e-mail letter as the response of the Board of Directors of the River Valley Co-op to your letter of July 12, 2017.
You have requested individual payroll records for all employees and other internal personnel related reports. While individual wages for all staff are considered private and confidential by Co-op policy, upon your request and in response to your questions, we did provide significant overall information about staff wages, Co-op wages in comparison to living wage benchmarks, as well as information about how we are well within the domestic fair trade certification standards on the wage metric for ratio comparing the entry level to highest paid management positions.
We’ve happily provided this information because we consider it important for our Co-op owners to understand how the Co-op works and the context within which it works. So, while individual employee wages are private, we value transparency with Co-op owners, including issues related to compensation for our employees and we were happy to provide that information in response to questions from Co-op owners.
Your letter suggests that you interpret the Sec. 2.5 of the bylaws to entitle you to any internal documents upon request regardless of any detrimental effects that dissemination would have on the interests of the Co-op or any individual’s rights to privacy under our policies, or the law. The Board rejects that interpretation. Section 2.5 must be interpreted in the context of Massachusetts laws relative to corporate records, which recognizes that corporations, including cooperatives, have private books, records and trade secrets.
The Board has a duty to protect the interests of the Co-op as well as ensuring transparency in providing information needed by Co-op owners to understand how the Co-op works and the context within which it is operating in the marketplace.
The Board considers the overall detailed information previously provided in response to your request and questions to meet our duty of protecting the overall interests of the Co-op and the privacy provided to individual employees by Co-op policy, as well supporting Co-op owners in gaining an understanding of employee compensation at the Co-op.
Again, the Board appreciates your interest in the operation of the Co-op and welcomes Co-op owner questions.
River Valley Co-op Board President