July 12, 2023

Director Spotlight – Karen Miner, ICD.D

Director, EfficiencyOne, Co-operatives and Mutuals Canada; Managing Director, International Centre for Co-operative Management

Director Spotlight is a regular feature that provides an opportunity for a prominent director to discuss practical insights and critical developments on climate governance important for boardrooms. Chapter Zero Canada recently spoke with Karen Miner on various board approaches to climate governance, including stakeholder engagement within member owned/controlled organizations and how an organization’s purpose can impact its climate strategy.

You have director experience on a range of different board types including non-profit, charity, credit union, and co-operative boards. Are climate governance issues approached differently within these organizational structures, versus, for example, a shareholding corporation? Can you share any specific examples?

Indeed, I have sat on many types of boards over the past 20 years, and the ethical values basis of each organization has been the consistent factor across industries spanning retail, financial, environmental advocacy, land protection, energy efficiency, and fair trade. I currently sit on the boards of Co-operatives and Mutuals Canada (national association) and EfficiencyOne (not-for-profit energy efficiency enterprise), and I’m deeply engaged in the co-operative sector globally through my work at the International Centre for Co-operative Management.

These Director Spotlight questions are focused on non-profits, charities, credit unions, co-operatives, and mutuals which do not share specific commonalities aside from their not-for-profit character. Keep in mind that co-operatives, credit unions, and mutuals can be very large enterprises across all sectors of the economy. Regardless of the type of organization, climate is now a front-and-centre issue, and the approach to the issue depends less on the type of organization and instead on the personality of the organization – manifested in its mindset (paradigm or worldview), purpose, and values.

We are now in an era where all organizations should be leaders in environmental justice and climate. However, during decades of insufficient action, the non-profit and charity sectors did respond to fill the void in the climate leadership space. These advocates and pioneering organizations have always had climate in the room and on the table. When looking for climate competent directors, a wealth of experience and knowledge can be found around the board tables of these organizations.

In the case of credit unions, co-operatives, and mutuals (henceforth referred to collectively as co-operatives), we are talking about a unique enterprise model that is people-centred (not capital centred) and have a democratic and participatory governance system. These organizations are guided by a set of universal values, but these values are not applied consistently by all. The most values-aligned co-operatives are certainly leaders in the climate space given their mandate to be ethical, purpose-led, and intergenerational, plus financially viable of course. The intergenerational mandate is critical as tackling the climate crisis requires a long-term view and care for future generations versus focusing narrowly on current members (co-operatives) or existing shareholders (investor-owned firms). An orientation toward intergenerational benefit maximization is a huge advantage for co-operatives over other types of organization when it comes to tackling complex, systemic challenges such as climate. Longstanding climate and sustainability leaders in Canada include The Co-operators, Vancity (credit union), and Sustainability Solutions Group.

Increasing scrutiny is placed on a board’s foresight, insight, and oversight role related to climate and sustainability across all organizations. Directors must continually assess their external and internal environments to better understand changing stakeholder expectations within their context. Can you discuss the participation and engagement expectations with member owned and controlled organizations and mutuals as it relates to climate change and some of the challenges around this?

Like all organizations, co-operatives have a set of strategic stakeholders, but unlike for-profit corporations, shareholders are never the primary stakeholder. Instead, the primary stakeholder in co-operatives is the members, and members are the users of the organization (typically consumers, producers, or workers) who have the right and responsibility to own, control, and benefit from the organization. Therefore, members have the right to voice and representation in governance. Unlike shareholder corporations that give voice proportional to shareholding, co-operatives are democratic, and each member has equal voice (one member, one vote).

This proximity to members means that the most important stakeholder group is in direct communication with the organization, and understanding their expectations is easier to ascertain than in other types of organizations. Plus, being democratically controlled by members, opportunities are provided for member participation and engagement in defining the co-operative’s purpose, vision, and values. Regarding climate and other sustainability mandates, it is quite easy for the governance bodies and management to lead on these topics when the majority of members provide their support. If members do not understand the co-operative’s responsibility in these areas, leadership potential is diminished.

Whether corporate, non-profit, charity, or co-operative, we do not have the majority of any organizational type demonstrating sufficient climate leadership at this critical time. The best solution is to ensure that climate is a top priority and that all organizations think and act with the utmost urgency, responding in ways that exceed standards set by regulation.

The organizational purpose of non-profits, charities, co-operatives are quite fundamentally different and can mean a deeper commitment and action regarding their climate strategy and reporting framework. What does this mean in terms of opportunities and risks for the organization? Can you discuss how an organization’s purpose impacts a board’s strategic climate transition strategy and the actions required to deliver on it?

In responding to question 3, I want to be careful not to equate purpose with organizational type as there is far too much diversity in the application of any type of organization to generalize. As mentioned in my response to question 1, mindset, purpose, and values are central drivers of climate commitment, and organizational types that focus less on profit do have some advantages. When the profit motive is lessened (as it is in co-operatives) or eliminated (charities and non-profits), the pressure to generate large financial returns is not a distraction, and it enables purpose to be more focused on planet and people (over profit). It also results in a broader understanding of the “business case” for sustainability, and it facilitates the internalization of externalities – in other words, taking responsibility for all positive and negative consequences of what we produce and consume as organizations.

To make this point, consider the fabulous example of Patagonia, a leading purpose-led organization that recently shifted away from private ownership (for-profit business, B corp certified, Californian benefit corporation) to now having Earth as the only shareholder. To fight the climate crisis while keeping Patagonia’s values intact, a new configuration for the organization was required: Patagonia’s owners are now the Holdfast Collective (a non-profit owning 98% of the company) and the Patagonia Purpose Trust (owning 2% of the company and all voting stock). They are using the organization’s wealth to do everything possible to protect planet Earth.

From a risk perspective, we need to shift our perspective and govern by: taking a fresh look at the meaning of being purpose-led through the lenses of ethical values, system complexity, and an intergenerational perspective; broadening one’s understanding of impact (across social, economic, and environmental dimensions); determining meaningful strategic focus; and taking fast and deep action. We are in the age of climate opportunity and necessity. I call on all organizations, all boards, and each director to leave a legacy of meaningful climate action.

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