How to design the governance of co-operatives so it is appropriate to each stage of their development.
Prof. Johnston Birchall
Emeritus-Stirling University
Johnston Birchall is an emeritus professor at Stirling University, Scotland. A social economist, he specialises in the study of member-owned businesses. He has published 10 books and numerous reports and articles on the subject, with translations into eight other languages. His latest books are People-centred Businesses; Co-operatives, Mutuals and the Idea of Membership (Macmillan, 2011) and Finance in an Age of Austerity: the Power of Customer-owned Banks (Edward Elgar, 2013). He has consulted for the UK Government, UN agencies and co-operative federations; his latest work focuses on the governance of large co-operatives, and on financial co-operatives after the banking crisis.
Abstract
The aim of this presentation is to provide a commentary on the theme of the conference - understanding the stages of co-operative creation, transition and transformation - and on the need to manage such change, specifically... [ view full abstract ]
The aim of this presentation is to provide a commentary on the theme of the conference - understanding the stages of co-operative creation, transition and transformation - and on the need to manage such change, specifically the need to design governance processes that are fit for purpose at each of the stages.
First, it defines four levels of analysis: the individual co-operative, the co-operative sector the sector in comparison with its competitors and the wider industry of which it is part. Second, it identifies three distinct types of question that we want to ask: how co-operatives have evolved and been redesigned over time, why they have or have not been successful, and what is their wider significance. Third, it suggests seven periods that they may go through, from foundation through to death or renewal. It then identifies several useful theories that explain why co-operatives succeed or fail. There are three specifically co-operative theories - Shah’s theory of co-operative design and evolution, Hansmann’s theory of ownership, and Hirschmann’s theory of voice, exit and loyalty – all of which emphasise the importance of governance as an explanatory variable.
This leads into a discussion of my own recent work on the governance of the largest co-operatives. Governance structures vary greatly and it has proved impossible to reduce them to a few types. Underlying the variety is a differing emphasis on four basic needs: for member involvement, good representation, business skills and effective management. How these are designed into co-operatives reflects their priorities and determines their effectiveness. Several examples of good design are described, along with one dramatic example of a recent redesign of a failing co-operative (UK Co-operative Group).
Session
KN-1 » Keynote Presentation-How to design the governance of co-operatives (09:30 - Wednesday, 25th May, Palacio de Congresos-Sala 1)
