Governance Structures of the Bulgarian Agriculture Cooperatives – Development, Changes and Challenges

This paper analyses the development and the changes in the governance structure of the agriculture cooperatives in Bulgaria that occur over the last two decades. We summarize the extant empirical evidence on the various... [ view full abstract ]

This paper analyses the development and the changes in the governance structure of the agriculture cooperatives in Bulgaria that occur over the last two decades. We summarize the extant empirical evidence on the various informal changes that deviate from the formal rights of governing bodies through case studies. The main findings show that the chairmen centralize the power and the power resources (decision-making, right of control, distributes property rights and benefits, regulate transaction costs) and occupy the function of the other cooperative governing bodies (General Assembly, Board of Directors and Supervisory Board). Thus agriculture cooperatives in Bulgaria are unable to continue performing their primary goals (to satisfy the members’ interests and improving their welfare) and supporting activities. This leads to a situation in which members are losing their trust in the cooperative and many of them terminate the membership and move their assets in commercial companies. As a result, some cooperatives are converted to investor owned firms or liquidated and their number is continuously decreasing.

Keywords: cooperative governance, cooperative governance structure, agriculture cooperative, Bulgaria