Governance in co-operatives is “as good”, if not better, than governance in limited companies, according to a new report. The research comes just days after the Co-operative Group’s former chief executive labelled the organisation “ungovernable”.
The report, from the trade body Co-operatives UK, reviews the performance and structures of 60 of the world’s largest co-operative businesses to assess how they operate on a global level and how difficult the task of governance is.
A co-operative is owned and managed by customers or employees, rather than outside stakeholders, meaning that its governance structure operates differently from limited companies.
Whilst there is a diverse range of governance practices, the report sets out four key principles that a board of a co-operative should do.
These are to ensure its purpose is central to its members; promote the right operating system to build and sustain competitive advantage; align incentives so that governance sits effectively with the wider economic participation of members; and nurture, secure and retain the allegiance of members.
Worldwide, there are 1,465 large, successful co-operatives, that each turnover $100m (£60m) annually, the report said.
Of these businesses, the largest number are found in the US, followed by France, Japan, Germany, Netherlands, Italy, Spain, Switzerland and the UK. They also operate in a wide range of sectors including insurance, agriculture and food, wholesale and retail and banking and financial services.
Prof Johnston Birchall from the University of Stirling, who led the research, said, “The findings of the research are clear; the participative model of co-operative governance does work at scale, and, governance in co-operatives worldwide is as good, if not better, as anything we find in the plc realms.”
He added that the best models of co-operative governance are designed to put the right mix of people and skills onto the board.
“You get it wrong if you don’t have the right skills, or, you have the right skills but are not accountable to the membership”, he explained.
The Co-operative Group in the UK “regretfully” accepted its former chief executive Euan Sutherland’s resignation last week. Sutherland said it had become “impossible” to make changes where they were needed and labelled the organisation “ungovernable”.
The report noted that the organisation’s board was one potential weakness. The size of the board is 21, which is higher than the recommend level of 12 to 15. However, Birchall warned that radically redesigning a board can lead to additional risks and unintended consequences.
Ed Mayo, secretary-general of Co-operatives UK, commented, “Governance is a strength, not a weakness of co-operatives. It allows for a more inclusive model, reflective of the interests and expertise of employees and customers.
“However, governance is not something you get tight and then forget about. It needs constant focus, continuous improvement and the Co-operative Group will be no different in this regard. Governance that does adjust and adapt proves far more costly over time than being open and agile.”
Like our Facebook Page
Eco-Friendly Decisions That Will Enhance Your Quality of Life
List of Fantastic Places for Green Consumers to Settle in South Carolina
6 Amazing Eco-Friendly Bedroom Design Ideas for Sustainable Homeowners
5 Great Ways to be a More Environmentally-Friendly Cannabis User
Amazing Approaches to Cycling for Promoting a Greener Lifestyle
Understanding The True Environmental Impact of Dentistry
Incredibly Important Benefits of Effective Ethically Made Anti-Virus Face Masks
Best Natural and Eco-Friendly Ways to Treat Dog Ailments
Green Entrepreneurs Find Creative Ways to Balance Ethical Goals with their Retirement Objectives
The Surprising Environmental Benefits of Using an Organic Mattress
From Store to Door with Minimal Impact: How Companies Are Eco-Friendly Innovators
A Guide to Investing In Renewable Energy Stocks in 2021
Creative Ideas to Practice Eco-friendlier Consumerism
Hawkers Launch a Truly Innovative Eco-Friendly Sunglass Line
Everything You Need to Know Before You Start Using Renewable Energy in 2021
The Curtis Institute of Music Makes Facilities More Energy Efficient
What Can Ecotourists Learn from Visiting Chernobyl?
5 Essentials for Promising Eco-Friendly Businesses to Thrive in a New Economy
Charity Organizations Who Are Taking Steps to Become More Environmentally Friendly
Mastering the Art of Trading Bitcoins Profitably and Sustainably
- Editors Choice12 months ago
10 Green Companies With Amazing Environmental Initiatives
- Features12 months ago
5 Sustainable Home Improvement Ideas To Improve Your Home’s Value
- Energy12 months ago
10 Amazing Energy Saving Hacks for Spring
- Invest11 months ago
4 Super Simple Solutions To Create The Perfect Eco-Friendly Home