TOPIC 19-STAGE 5-MICRO
This paper combines theory and case study evidence to examine how governance challenges played out in a large-scale failure of a co-operative, specifically the Saskatchewan Wheat Pool (SWP). The paper has three sections: the first section outlines a conceptual framework of co-operative governance; the second section uses this framework to examine the SWP case; and the third section draws out some of the implications for future research and practice.
The first section conceptualizes co-operative governance in terms of three fundamental elements: (1) managing strategic interdependencies; (2) developing the “right” view of the future; and (3) establishing and maintaining legitimacy. This framework was presented at the ICA-Paris conference (Fulton, Pohler and Fairbairn 2015) and is the subject of a current working paper (Fairbairn, Pohler and Fulton 2016).
The second section examines the case of the SWP, a large agricultural co-operative in western Canada that was converted to an investor-owned firm after unsuccessful governance restructuring. Drawing on the author’s previous work (Fulton and Larson 2009), this section shows how changes to the SWP’s governance structure adversely affected the ability of the co-op to manage key strategic interdependencies both internally and externally, how poor financial results were the consequence of earlier governance problems that failed to develop the “right” view of the future, and how the legitimacy of the organization as a co-op was severely damaged as a result of these governance failures.
The final section of the paper outlines the parallels between the SWP case and other recent examples of co-operative failures (e.g., the Co-operative Group in the United Kingdom). On the basis of these observations, the paper concludes with some comments about the key elements that co-operative leaders need to be consider when it comes to governance.
References
Fairbairn, B., M. Fulton, and D. Pohler. 2015. Governance as a Determinant of Success and Failure What Other Co-ops Can Learn from Co-op Atlantic. Centre for the Study of Co-operatives, University of Saskatchewan, Saskatoon. http://usaskstudies.coop/documents/books,-booklets,-proceedings/Co-op%20Atlantic%20final.pdf.
M.E. Fulton and K. A. Larson. 2009. “The Restructuring of the Saskatchewan Wheat Pool: Overconfidence and Agency.” Journal of Cooperatives Special Issue. 23:1-19.
Fulton, M.E., D. Pohler and B. Fairbairn. 2015. “The Political Economy of Good Co-operative Governance.” Presentation to the ICA Research Conference, Paris, France, May 28.
Fairbairn, B., D. Pohler, and M.E. Fulton. 2016. “The Governance of Federations.” Working Paper. Centre for the Study of Co-operatives, University of Saskatchewan, Saskatoon.
