Could democratic governance have saved MEC from bankruptcy?

Sad news about Mountain Equipment Co-op: It has gone bankrupt, and has been sold to private for-profit investors:

mec.ca/en/explore/mec-to-be-acquired

If only MEC's board has been more responsive to members' critiques about its lack of democracy, maybe this disaster could have been prevented.

From my 2012 paper We Want Our Co-ops Back:

"Co-ops that grow large (e.g. over 10,000 members) often tend to become less democratic. Voter turnout falls, and boards become less accountable to members. Boards may create bylaws and rules that shift power from members to boards. Directors may become more allied with a co-op's senior staff than with the members."

"... if democratic reform includes a voter information system that gives voting members insight into which director candidates would better serve the co-op and thus its members, the result will be improved performance of the co-op."

MEC Election: Why I'm voting for Steve Jones

We Mountain Equipment Co-op members are voting from now through May 23 to elect 3 directors. I'm voting for Steve Jones because he pushes strongly to restore democratic member control, which the incumbent board has been undermining for several years now – see:

• theglobeandmail.com/report-on-business/mec-governance-changes-sparks-dissent-among-long-time-loyalists/article26852082
  
  
• votermedia.blogspot.ca/2015/03/mec-ramps-up-suppression-of-member.html
  

I'm also voting for:
- Tamara Paton: "I want MEC – and our Board – to feel less corporate and more co-operative."; and
- Robert Henderson: "I’m a nature lover with 6 years of board experience in large stakeholder-driven organizations."

Vote now through May 23: https://elections.mec.ca/vote/

MEC Election: Why I'm voting for Steve Jones

We Mountain Equipment Co-op members are voting from now through May 25 to elect 3 directors. I'm voting for Steve Jones because he pushes strongly to restore democratic member control, which the incumbent board has been undermining for several years now – see:

• theglobeandmail.com/report-on-business/mec-governance-changes-sparks-dissent-among-long-time-loyalists/article26852082
  
  
• theglobeandmail.com/report-on-business/mountain-equipment-co-op-eases-board-applicant-rules/article32383675
  
  
• votermedia.blogspot.ca/2015/03/mec-ramps-up-suppression-of-member.html
  

I'm also voting for:
- Patricia Eagar, the only female candidate not recommended by the incumbent board; and
- Bob Brent, who advocates change in the election system.

Vote now through May 25: elections.mec.ca/vote/#candidates/13

@MEC ramps up suppression of member #democracy

Is Mountain Equipment "Co-op" still a co-op?

Co-ops are democratic organizations controlled by their members (see fundamental principles of co-ops). Look at the evidence that MEC has become an undemocratic organization controlled by its entrenched board:

In 2012, the board persuaded unsuspecting MEC members to give it the power to disqualify any member from running in board elections. Supposedly this was to improve the quality of candidates, but that excuse can easily be used to eliminate candidates that challenge the board.

In 2013, the board used that power to prevent former MEC board member Anders Ourom from running. It's notable that in 2015, when Anders did not put his name forward to run, board experience is now considered sufficient to qualify: "...the minimum qualifications (experience sitting on a board or ...)".

In 2014, 27 MEC members wanted to run in the board election. The board blocked 2 of them, and the board chair claimed that this power increased the board's accountability to members (on page 2 of the minutes).

This year, 23 MEC members wanted to run, and the board blocked 7 of them.

As the notoriously corrupt Boss Tweed used to say: “I don't care who does the electing, so long as I get to do the nominating.”

With such a censored ballot, it's no wonder that MEC's voter turnout remains below 1/10 of 1%. Russell Brand was right on target in this video: “It's not that I'm not voting out of apathy. I'm not voting out of absolute indifference and weariness and exhaustion from the lies, treachery, deceit of the political class”.

Of course, Russell was talking about UK national politics. But don't look to MEC for democratic governance.

@MEC pretends to be a #democracy -- AGM report

Mountain Equipment Cooperative announced its director election results at the 2014 Annual General Meeting yesterday (April 24). While claiming to be improving the election process, the incumbent board now exercises great control over who gets elected. Not only do they put their candidate recommendations on the ballot, but they also prevent some candidates from being on the ballot at all.

For this year's election to fill 4 director seats, the board recommended these 8 candidates:

Ellen Pekeles
Dale Mills
Gord Howe
Doug Brownridge
Daniel Blanche
Tamara Paton
Jonathan Gallo
Bill Gibson

They also allowed onto the ballot these 6 candidates, whom they did not recommend:

Jake Burlet
Pat Maher
Stephanie Bird
Bob Brent
Alex Beaskow
Tom Webb

These 4 were announced at the AGM as having been elected:

Ellen Pekeles
Tamara Paton
Jonathan Gallo
Daniel Blanche

As you can see, only "recommended" candidates were elected. I've documented elsewhere how boards can and do use on-ballot recommendations to ensure that the only candidates who get elected are those that do not challenge the incumbent board. This reduces the board's accountability to members, which opens the door to corruption.

The board chair claimed at the AGM that these recent election rule changes are "good governance" recommended by "experts". The "expert" he cited is often hired and paid by boards, and often gives advice to increase boards' power. I emphasized the obvious self-serving bias in a letter to FICOM, the regulator for B.C. credit unions: It is natural for directors and their payees to say: "To improve governance, we should give more power to directors."

But the MEC board has gone much further than the credit unions I wrote to FICOM about. As we saw last year, they used their new power to prevent a highly qualified candidate from even getting onto the ballot. So we only get to choose among candidates who don't rock their boat.

I thank Melissa Fong for sharing this quote from Noam Chomsky in a recent tweet:

"The smart way to keep people passive and obedient is to strictly limit the spectrum of opinion, but allow very lively debate within that spectrum."

One of the fundamental principles of co-ops is: "Co-operatives are democratic organizations controlled by their members". Which raises the question:

Is MEC a co-op?

Will #FICOMBC support @Vancity Credit Union board entrenchment? #democracy

Today I submitted this letter to the B.C. Financial Institutions Commission (FICOM), with my comments on their draft Governance Guideline for Credit Unions. Main points:

Accountability requires competition in board elections.
=> So boards should not be able to disqualify competitors based on subjective assessments.

Lack of accountability opens the door to corruption.
=> Only competitive elections can prevent favouritism in the use of members' funds.

Board control of information can bias elections.
=> Boards should not be allowed to put their recommendations on board election ballots.
=> Without that, Vancity members would have elected Lisa Barrett instead of Allen Garr.

Please don't let the foxes design the hen house.
=> The public interest should take precedence over lobbying by credit union insiders.

Will next week's B.C. election have any effect on FICOM's final Governance Guideline? Just asking...

@MEC slides from #democracy to #oligarchy -- AGM report

Mountain Equipment Corporation Cooperative held its 2013 Annual General Meeting on April 25. Unfortunately, the outreach efforts of us 600 MEC Members for a Democratic Co-op were not enough to counter the MEC board's control of information flowing to members. The board's resolution on rule changes passed by a vote of 91% to 9%. For an overview of how the vote was biased, see my article in the Vancouver Observer: "We want our co-ops back"

So in addition to last year's new power to reject director candidates from standing for election, the board can now reject any member resolution for any reason, without submitting it to member vote. The new rule changes reduce the board's accountability to members in several other ways detailed in my March 14 blog post.

Many members were shocked to see how quickly the board took advantage of its new power by rejecting 2013 director election nominee Anders Ourom. His qualifications include:

• MEC Director (1981-1986, 1988-1992)
• MEC Board Chair (1989-1991)
• President, Climbers' Access Society of B.C. (1995-2004)
• Lawyer, Advising Societies and Co-operatives (1995 - present)
• Legal Advisor, MEC Rules Revision Projects (1997-1998, 2001-2002)

Apparently the board decided that MEC members needed to be benevolently protected from having the option to vote for Anders this year. In the AGM's Reports Q&A section, I stepped up to the mike and asked this question:

Stand up for member #democracy: attend AGMs @MEC @Coast_Capital @Vancity

You can help reclaim member democracy by attending these upcoming Annual General Meetings:

Mountain Equipment Co-op (MEC):

Thursday, April 25, 2013
Doors open at 5:30pm
Meeting at 6:00pm
Roundhouse Community Arts & Recreation Centre
181 Roundhouse Mews, Vancouver
Please bring your MEC membership card or 2 pieces of ID

Coast Capital Savings Credit Union:

Tuesday, April 30, 2013
Registration and light refreshments from 4:30pm to 5pm
Meeting begins at 5pm
Executive Airport Plaza Hotel & Conference Centre
7311 Westminster Highway, Richmond, BC

Vancity Credit Union:

Tuesday, May 7, 2013
Registration at 6pm
Meeting at 7pm
Italian Cultural Centre, 3075 Slocan Street, Vancouver

(Vancity director election voting ends April 26. Here's why I'm voting for Williams, Barrett & Yaron.)

Reclaiming member democracy in co-ops and credit unions can be a first step toward making our elected leaders accountable to voters in corporations and democracies too -- see recent Vancouver Observer article "We want out co-ops back."

Co-op #democracy reform movement growing @MEC @Coast_Capital @Vancity

Co-op members are waking up to reclaim their democratic rights.

Mountain Equipment Co-op:

Over 400 500 members of MEC have now signed an open letter "The C is for Cooperative, Not Corporation", protesting the MEC board's misleading labelling of a resolution that would transfer control of director nominations and member resolutions to the board. Members can vote on it until March 28, at mec.ca/election. I recently posted this analysis with voting recommendations -- please vote NO on the board's Resolution #1.

Coast Capital:

In a similar push-back, 438 members of Coast Capital Savings Credit Union (a financial co-op) have signed a petition demanding a vote to reverse a 2007 rule change that allowed their directors to decide their own pay, which has grown rapidly since then -- see the member-organized website Coast Capital Compensation Watch. Members can vote on the resolution from now through April 16, on paper ballots by mail or online at www.coastcapitalsavings.com > Log in > Account Services > Online Voting. (Please vote YES.)

Technology Credit Union:

Last year, the board of California's Tech CU proposed converting it into a mutual savings bank, a move that has been criticized (e.g. here) as enriching directors at members' expense. Fortunately, a campaign to alert members to the downside resulted in their defeating the proposal by a 77% vote.

Vancity Credit Union:

In April 2012, the Vancity board of directors elections were criticized for being undemocratic -- see especially the article's comments. Although other candidates can run for election, the board's recommended candidates are listed first on the ballot, in bold, with the word "recommended" -- my analysis here.

Vancity's 2013 board election is next month.

We Want Our Co-ops Back!:

Last year I wrote a report proposing reforms for these democratic deficits, and emailed it to the boards of MEC and Vancity. But judging from our resulting correspondence, they seem unwilling to restore accountability to members.

So more members are getting concerned about the trend, and seeking to reverse it. Last week I published an article in the Vancouver Observer, citing the decline in accountability of elected leaders as a major cause of the 2008 financial crisis. Co-ops can become the starting point for a democratic reform movement that can eventually empower us to also reclaim our corporations and our governments.

We are organizing -- please email me (mark[at]votermedia.org) to join us in re-establishing Co-op Principle #2 -- Democratic Member Control:

"Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership."

@MEC director election endorsements: David, David & David

Members are voting in the Mountain Equipment Co-op board of directors election until March 28, at mec.ca/election. Here's how I plan to vote and why:

Board of Directors (vote for up to 3):

1. David Goldsmith
2. David Wartman
3. David Wexler

Reasons:

Published today in Vancouver Observer: We want our co-ops back @MEC @Coast_Capital

Today (2013-03-18) the Vancouver Observer news website published my opinion piece "We want our co-ops back".

It describes how the boards of Mountain Equipment Co-op and Coast Capital Savings have been changing the rules in ways that shift power from members to boards. This undermines the accountability of elected leaders to voters -- the same trend that caused our 2008 financial crisis.

But we can reverse the trend -- see how in the Vancouver Observer article.

[BTW the above linked article is a 2-page overview, partly based on my 24-page in-depth report with the same title but capitalized: "We Want Our Co-ops Back". Sorry for any confusion but I love that title!]

@MEC Vote NO on Mountain Equipment Co-op Resolution #1

Time is running out for us MEC members to defend our democratic rights by rejecting the Board's proposed Resolution #1. To understand what's at stake, look at what happened last year:

@MEC @Vancity #CIRA boards unwilling to restore accountability to members

Last year, I studied the trend toward violating the second fundamental principle of co-operatives -- democratic member control -- as co-ops become large. As examples, I focused on three organizations: Mountain Equipment Co-op (MEC), Vancity Credit Union, and the Canadian Internet Registration Authority. (CIRA, which manages the .ca domain, is not formally a co-op but faces similar issues of accountability.)

I wrote a detailed exposé of how these organizations' boards have been changing the rules in ways that shift power to themselves by reducing their accountability to members, while maintaining a facade of democracy -- see We Want Our Co-ops Back at votermedia.org/publications. Last September I announced the first draft on this blog and on Twitter, and emailed it to all three boards, inviting feedback. Here I'll report how they have responded so far.

To make it easier for them to give at least a partial response in the near term, in December I suggested that they focus on just two practical reform questions:

1. Do you plan to create a year-round online member forum?
2. Do you plan to create a competition for informing members, in which members vote to allocate award funds?
For both these questions: If so, when? If not, why not?

Mountain Equipment Co-op (MEC):

We Want Our Co-ops Back @MEC @Vancity #CIRA

Today I released the first draft of my paper We Want Our Co-ops Back, along with a spreadsheet Co-op Democracy Scorecard. From the paper:

We can reform all our large voter organizations, including democracies and corporations, by starting with reforming our co-ops (including financial co-ops such as credit unions). Most large institutions lack effective democratic control by voters. Even though citizens of democracies can vote, corporate shareowners can vote, and co-op members can vote, those voting rights are ineffective if voters lack the information, insight and nomination rights necessary to elect the best leaders. This paper outlines how we can better implement the fundamental co-op principle of democratic member control, even when co-ops grow very large. Later we can apply these ideas to our democracies and corporations.

This paper proposes rules to improve the democratic accountability of co-op leaders to members, organized in nine topic sections. To contrast these proposals with existing rules, I cite examples from three Canadian organizations where I am a member: Mountain Equipment Co-op (MEC), Vancity Credit Union, and the Canadian Internet Registration Authority (CIRA).

I welcome your comments!

Mountain Equipment Co-op AGM: Democracy slipping away @MEC

Democracy took another hit at Mountain Equipment Co-op's Annual General Meeting yesterday. Intentionally or not, MEC's board has deceived MEC members into voting for a resolution that shifts power from the members to the board. This is bad governance, harmful to the members, and harmful to MEC.

The board proposed a Special Resolution, and approved the following description of it in the election booklet mailed to every member:

"Specifically, the changes would place responsibility on the Committee for identifying and presenting a qualified, diverse ballot of candidates to the membership each year. In essence, the changes result in:

• Better communicating board skill and knowledge needs so we can clearly identify qualified candidates and inform members of the same;
• Ensuring we present a qualified and balanced election ballot each year so members have a positive voting experience;"

[full text here]

Whether by intention or by accident, the above language is deceptive. It does not make clear what power we members would give up if we approve the resolution. Most MEC voters wouldn't have taken the time to click through the two levels on MEC's website to read the actual text of the resolution. Those few of us who did found this passage:

How I plan to vote in the Mountain Equipment Co-op election #MECelxn

[For 2013 MEC election endorsements see this 2013-03-18 post.]

[Post edited 2012-03-19 thru 2012-03-27 to reflect new info received.]

Breaking news 2012-03-21: Candidate Morrie Schneiderman has signed the Open Letter opposing the Special Resolution -- check it out at www.democraticcoop.ca! So I changed my voting plans below:

Summary:

I plan to vote for Drew Anderson, Mike Wearing, and Blair Hammond Morrie Schneiderman.

(I think Morrie Schneiderman Blair Hammond and Robert Campbell are also great candidates -- my 4th & 5th picks.)

I definitely plan to vote NO on the Special Resolution!

My main reason for the above votes: strengthening the connection between the board and MEC members. I asked all candidates their opinion on the Special Resolution. Opposing it is a major plus factor in my choice of who to vote for -- see Open Letter at www.democraticcoop.ca.

Vote NO on Mountain Equipment Coop Special Resolution @druojajay @mec

I am shocked that the directors of this great Canadian cooperative are proposing to give their appointed nomination committee veto power over any member nominees for director elections.

This blog post from Dru Oja Jay explains it well:
http://montreal.mediacoop.ca/blog/dru/10078

"...if any future board runs amok, it will be very difficult to displace them, because they can simply screen out any members which challenge their power."

Please vote NO on the MEC Special Resolution, and share this info with your friends. Thanks!