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What a steering committee is and does

When starting a co-op, one of the first things you should do is form a steering committee. A steering committee is the group of people that do the work of forming a co-op. For example, a steering committee outlines how decisions are made.  Often it completes and submits government forms. And some key steering committee activities include figuring out how to finance the business, soliciting potential members, and much more. Sometimes a steering committee does the legwork on behalf of a larger group of people. But more often this group is self-appointed and represents the core of the co-op.

What a Steering Committee does

Here is a list of activities often completed by a steering committee:

  • They organize themselves
  • Determine their purpose
  • Assign tasks
  • Gather broader support (if required)
  • Follow an action plan towards incorporating and launching the business.

Of course, there are many ways of accomplishing the same objectives. So, treat the above as a guide, not a comprehensive list.

Because this group organizes itself and the co-op, a steering committee often outlines the formal governance for the new organization. So, a steering committee is also like a board of directors. In fact, this committee often becomes the first board of directors after incorporation – at least until the first AGM when a new board is elected.

How to form a steering committee

In most cases, a steering committee includes only the people involved in forming the co-op. But there are times when others join. In that case, individuals, organizations, and businesses not connected to the ownership structure, but who want the project succeed, are sometimes invited to join.

Most often when a co-op is forming, a meeting is held with potential members to gauge interest and plan. Volunteers are often solicited at these types of meetings. Forming a steering committee is a natural step in this process.

But these committees can form in other ways. For example, local governments looking to bring in a new service – but who don’t want to own and manage the service themselves and haven’t be able to secure outside investors – may issue a call for steering committee members. That way they can gauge commitment for the project and have a group ready to move the project forward without having to manage it themselves.

Who should be on a steering committee

Ideally, a steering committee will have people with diverse skills. Lawyers, for example, are coveted steering committee members because they can offer highly specialized advice. However, there are other highly valuable skills worth seeking out when assembling a committee:

Financial literacy

Steering committees must determine how much money a co-op will have to raise. Building a budget and identifying sources of funds is part of the job. So, a committee member with a working knowledge of accounting, financial statements, and debt management is valuable.

Board governance

Because you’re working as a group, it’s useful if some members of the committee are familiar with good governance practices. Organized, efficient, and transparent decision-making is challenging. So, having someone familiar with best practices, such as Robert’s Rules of Order, can be beneficial.

Legal experience

Navigating regulations and writing incorporation documents requires patience and a general understanding of legal jargon. Hiring an expert can be expensive, so having someone familiar with legal language and processes on your team is beneficial.

Technical knowledge

Having someone on the committee who understands the industry the co-op will operate in is important for designing operations and can save time and costs – especially during the business planning stage.

Communication skills

From consulting potential members to meeting with lenders, steering committee members need to have good interpersonal communication skills. If there is a Negative Nellie or Patronizing Paul on the committee, consider appointing 1-2 other members to be the committee’s spokespeople.

Of course, this needs to be a group process. There’s no such thing as a co-op of only one person: by definition, a co-op is group entrepreneurship. A key part of starting a co-op is that the people who will use the business should be the ones who start, shape, govern, and benefit from it. Building a co-op for someone else or serving on a steering committee because you feel obligated won’t yield good results.

Responsibilities of those on a steering committee

While not an exhaustive list, here are a few important responsibilities members of a steering committee usually lead:

Defining purpose

The steering committee should determine the co-op’s purpose. Input from the people the co-op is meant to serve will help clarify the business’ purpose.

Defining ownership

Ideally, the steering committee is representative of the co-op’s future owners. Who the co-op’s members will be and the criteria people need to meet to become a member should be determined by those with similar interests and a stake in the business.

Determining how decisions are made

The steering committee outlines how members work together. They decide how the organization functions. And they determine how the business will get up and running. Building a transparent process and seeking input from stakeholders will help guide decision making in these early stages and over the longer term.

Business planning

While not always necessary, a business plan is helpful in a variety of ways: communication of intentions, soliciting funds, and securing loans, for example. A business plan outlines how the co-op will be staffed, sell goods, and manage cash flows. But also how it interacts with its owners. Together, this provides a document for communicating the business idea to stakeholders and shareholders alike.

Incorporation

Often the steering committee can lead the drafting of the articles of incorporation, bylaws, and reserve the co-op’s name. Sometimes this process requires expertise from lawyers or other business development professionals. Find out how you can streamline your incorporation with us.

Financing and fundraising

The steering committee should always be thinking how they will pay for co-op’s costs and where those funds will come from. Creating a budget, a list of funding sources, and financial projections will help make up the co-op’s business plan and identify how it will fund its operations.

Soliciting new members and membership engagement

Underpinning all the activities of the steering committee is the need to report back to the co-op’s membership. Being involved in important decisions is the responsibility of an owner. Owner involvement at this level helps ensure they continue to support the co-op’s mission and buy into the purpose and value of the business.

What a steering committee does after the co-op has incorporated

People on a steering committee are often the co-op’s founding members (incorporators). They also generally form the first board of directors. Financial and business planning, creating bylaws, and putting a process in place for accepting new members continues to be this groups responsibility.

Steering committees also usually hold their position until the co-op’s first annual meeting when the first board election is held.

The role of a steering committee shifts following incorporation. They now have an obligation to fulfill the responsibilities of being a director of an incorporated business. You can learn more about what that means here.

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