What we should demand from business

I have chosen in this blog to focus specifically on issues related to cooperative and mutual businesses, but I sometimes wonder whether that’s a mistake. What I mean is that, while those of us associated with the cooperative world ponder issues such as, say, member democracy or access to capital, the rest of the business world cheerfully gets on with its work of making money for investors and shareholders.

I think we need to look beyond the coop sector sometimes, and to start intervening in the way that we allow conventional companies to operate. As societies we permit company law to grant limited liability to businesses run simply to maximise profits, while requiring in exchange for this very generous concession almost no commitment from business to contribute to the wider social good.

Prem Sikka, professor of accountancy at Essex University, has a good piece in today’s Guardian. Talking in particular of the British retailer BHS now in administration, he describes the way that directors there were able to treat BHS as their private fiefdom, with no concern for employees,  pension scheme members, supply-chain creditors or other stakeholders.

Here’s his conclusion: “UK company law needs to be modernised. Companies are not the private property of shareholders. Rather they should be seen as public institutions that help to advance common interests, and create and distribute wealth. Directors should be seen as trustees of stakeholders rather than as agents of shareholders advancing sectional interests…. The current model of corporate governance needs to be swept away and replaced by stakeholder representation on the boards of major companies.”

I absolutely agree. Read his piece yourself here.

Coop movement partners with trade unions in Spain

An interesting press release arrives from the Spanish workers’ cooperative organisation Coceta which has today signed a partnership agreement with one of the two main trade union federations in the country CC.OO.  The aim is to work together to try to turn failing conventional businesses into cooperatives, as well as to convert businesses where the owner is retiring into worker-owned ventures.

The two organisations say they want to work more closely together with the aim of “not losing a single further worker’s job”.

Cooperatives and unions are increasingly rediscovering their common roots. Let me remind you of the 2013 ILO report on this theme Trade unions and worker co-operatives: where are we at? It’s worth a reread.

On the art of asking questions

I was at the AGM last weekend of a community-based cooperative I’m a member of, one that is steered by a small group of volunteer directors. 2015’s trading results were not, to be blunt, great and as a result the balance sheet looked less perky than it might have done (although more positively we were advised that sales since January have been satisfactorily above forecast).

I thought the chair and directors did a good job in briefing members (there were about fifty of us present) and in answering the questions. I raised a couple of points, one on the current strength of the board and one on staffing costs. Both questions I thought needed to be asked, but I hoped when I raised them that our directors didn’t think that I was criticising their hard (and unpaid) work on our behalf.

Directors have responsibilities to their members.  But in a well-run cooperative members have duties and responsibilities too: among other things, to read the accounts and the directors’ reports carefully and not to be frightened of asking for more information.

Without an actively engaged membership, a coop is already on the path to decay. Members: ask those difficult questions!  Directors: welcome those difficult questions!

Little democracy in member-owned building societies

This is the time of year when I am invited by the building societies in which I have savings to participate in their democratic life.  It’s, frankly, not much of an invitation. Building societies may be technically member-owned, but the ballot paper which comes round invariably allows me to vote (or decline to vote) for exactly the number of directors for which there are vacancies. It has been many years since I have been aware of contested elections for the boards of any of the major building societies and even more years before an ‘unofficial’ candidate not supported by the existing Board was elected (this was at the Nationwide some twenty years ago).

The usual device used by building societies is to bring in a new director by co-option, who then serves until the next annual election – at which point of course their name is added to the ballot paper in an uncontested election. It is, I’m sorry to say, a poor recipe not only for democracy but also for building society diversity and renewal.

So my heart sinks when the annual report and ballot arrives from the Ecology Building Society, and I find that the Ecology has followed industry norm: no contested election for the board and a new director brought in mid-year as a co-optee who we now have to endorse. The Ecology this week announced strong performance results, and I am pleased at their success. They also hold attractive green-themed AGMs which usually have good attendances. But I would be even more pleased if the board  proactively worked to attract more candidates than places in future board elections.

Incidentally, the small and dedicated (if sadly all too powerless) Building Societies Members Association is still going after more than thirty years of campaigning for some real member engagement in societies. They have recently been trying to help get independent candidates on to ballot papers, not an easy task. They deserve to be commended for their perseverance.

Cooperative and collective organising by the self-employed

What’s the answer for those people in the workforce who don’t have employment law protection because they are self-employed but who – far from enjoying the fruits of independent working – face social and economic insecurity?

Could the answer be to make it easier for the self-employed to organise together, perhaps through freelance cooperatives and/or through appropriate trade unions?

This is an issue which interests me a great deal, not just because I am self-employed and not just because I am a member of a trade union with a very sizeable (and very active) minority of members who are freelance.

I was involved some years back in a pioneering project with the global union UNI which brought together trade unions in Europe who were seeking to organise the unemployed, either (like my own union) directly in their own membership structures or through autonomous ‘new’ unions for self-employed members which they helped create. My report for UNI Global Union Opening the Doors Wide to the Self-Employed, although ten years old, is still available on my website, and you’ll also find there various articles I wrote at the time on the same theme.

Quite apart from this past professional interest, I also recall a pleasant day spent walking in the Peak District many years ago with a friend. She undertook similar work to me, also on a self-employed basis, and our walk had been arranged to give us time to ponder whether we could establish a cooperative structure for our businesses which would enable us to benefit among other things from joint marketing. We liked the idea – but the time just didn’t seem right to progress it.

So for all these reasons I am delighted that the British cooperative and trade union movements have collaborated on a new report which explores in detail some possible cooperative, mutual and union self-help solutions for what it describes as the self-employed precariat. The report Not Alone, just published and available on the Co-operatives UK website, identifies some innovative British examples of self-employed collective organising but also points out that other countries are far ahead of Britain in terms of good practice.

As the report puts it, “In the nineteenth century working class self-help organisations included craftsmen’s guilds, co-operatives, friendly societies and the first unions. Together they collaborated and proliferated to improve working conditions, to secure rights and status and to maintain standards of living for workers. In an age of economic insecurity and rapid changes in technology there is now the opportunity to reinvent democratic self-help for the twenty-first century in order to widen participation on a fair basis for all in work.”

There is indeed an opportunity here which needs to be grasped.

A view from the States on the Co-operative Bank/Group affair

There may be some who read this blog, particularly from the UK, who would prefer not to be reminded of the Co-operative Bank and Co=operative Group meltdown of 2013-2014. However it is important that the lessons from this affair are properly learned, both by the coop movement in Britain and elsewhere in the world.

A useful aide memoire of the whole sorry business, including key dates and events, has just been written by US-based coop writer David J. Thompson in the magazine Cooperative Grocer.  It’s worth a read.