Tackling AGM – yes, AGM – crime

Page 10 of the latest edition of Co-op News has an interesting headline: Tackling AGM crime.

It is, in fact, a spelling mistake.  The story below the headline is about ATM (cash machine) crime.

On the other hand, perhaps there are AGM crimes in the co-operative world which we should be thinking about.

There’s the crime, for example, of putting up just the number of candidates for a co-operative board that are needed, so that no genuine election is needed.

There’s the crime of hiding away the executive remuneration report deep in the AGM paperwork, so that members overlook it.

There’s the crime of making AGMs so deadly dull that nobody turns up (or at least nobody turns up more than once).

There’s the crime of treating the AGM as simply a jolly for those members (and, particularly, staff members) who turn up.  Give ‘em a decent buffet, and the job’s over for another year.

There’s the crime, in other words, of not treating the AGM as a key part of a healthy co-op’s democratic governance.

Of course, there are co-ops I can think of that really do their best to stage meaningful AGMs  – and I think things are generally getting better. But let’s not be complacent.

Maybe you can think of other AGM crimes for my list…

Board elections at the Phone Co-op

I’ve been casting my vote in an election and it’s not been an easy matter. The election is for three members of the board of the Phone Co-op, and there are ten members of the co-op putting themselves forward, many of them clearly strong candidates.

Not easy to decide, but what a nice problem to have!  What a refreshing change from those fake elections for board places on building societies, for example. The Phone Co-op does not pay its non-exec directors particularly lavish fees (directors received just over £1200 a year, last time I looked), but nevertheless its elections are consistently contested and usually – as this time – attract a strong field of candidates.

Good corporate governance?  Give that co-op a tick.

Member democracy and the Co-operative Group

Let’s talk a little about the current ballot papers which have gone out to Co-operative Group members, or at least to those who are eligible to vote (those members who have spent £250 or more in the last financial year or patronised other Group-related businesses to a comparable extent).

Firstly, this is an absolutely enormous step forward in bringing proper member engagement and an element of member control to the Group, Britain’s largest coop and (in 2014) the 27th largest coop in the world. Compared with the previous arcane procedures, this represents a transformation.

I have – naturally enough – some criticisms. Very little preparatory work was done to get members to expect these ballot forms, and the ballots themselves are complicated. I suspect that many members will give up. That’s a pity.

It’s frustrating to be able to vote yes or no to a motion reducing Group political donations from £1m to £750,000 – with a ‘no’ vote meaning that no political donations will be possible at all. I do however understand the commercial context in which this motion was drafted.

We have the opportunity to vote yes or no for the independent non-executive directorships, but that’s all. There are the same number of candidates as places. That’s not great. There is, however (and unlike last year), a genuine election this year for the two Member Nominated Directors.

I am not at all sure that the elections for regional delegates to the Members’ Council should have been by transferable vote: it’s almost impossible to rank candidates meaningfully when you know very little about them, and in this context transferable voting seems to me a voting system which is paradoxically less democratic than a simple ‘put X against up to X candidates’ ballot paper.

But it’s early days yet. This year’s elections are a start. It’s primarily the job now of the Members’ Council to build on this start.

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!

Desjardins election: the result is announced

I flagged up on March 8th the election which was going on at the Canadian financial cooperative federation Desjardins to appoint their new President and CEO.  It was, as I mentioned, a three-horse race.

The decision taken last Saturday by the 256-strong electoral college was to give the post to one of the two internal candidates. He is Guy Cormier, 46, who has been at Desjardins since his early twenties, starting off as a manager at several of the federated credit unions (caisses) and most recently being a Senior Vice President of Desjardins under Monique Leroux’s leadership.

Under Desjardins rules, his term of office is for four years, and he can then stand for election for a further term – but only for one more term. Monique Leroux, elected ICA President last November, would in any case have completed her term this year.

Going out on a Thursday night, the coop way

There are plenty of ways to spend a Thursday evening in February: a trip to the cinema maybe, a few drinks in the local pub or just an hour or two in front of the television.

But I chose last night to spend my evening at the AGM of a local cooperative I’m a member of. It’s a community energy business which runs a small wind turbine in a farmer’s field up on the hillside near here and which also works locally to encourage more use of renewable energy.  It’s one of many similar community energy cooperatives which have got going in recent years – though the highly regrettable government cut-backs in the ‘feed-in tariffs’ for energy generation and the removal of tax breaks on investments in such cooperatives make the model very much harder to replicate in the future.

The AGM was a model of how a small cooperative with strong community roots handles its business. We met in a local social club. We had a comprehensive verbal report from one of the directors on the past year’s ups and downs. We scrutinised the accounts. We passed a motion making a small change to our constitution. We awarded ourselves as investors a modest interest payment. And we also agreed to donate £1400 to a local charity, to help towards the appeal for the Christmas flooding which has badly affected our community.

Good governance, strong democracy and a profitable business: the secrets of a successful coop. I felt afterwards that my Thursday evening had been well spent.

Cooperative governance, and how it could be better

Pauline Green, who has just stepped down as President of the International Co-operative Alliance, gave me a moving and inspiring interview yesterday for a feature I am writing for one of my clients, the International Co-operative and Mutual Insurance Federation. Pauline mentioned in passing the dire straits in which the ICA found itself at the start of this century, starved of funds and losing members fast. The achievement of Pauline and her colleagues since those dark days not only in stabilising the ICA but in making it an increasingly powerful and respected voice globally deserves proper recognition.

One sign of the ICA’s renewed energy is the determination with which it is trying to implement its current strategy, the Blueprint for a Co-operative Decade. This is represented among other things by the publications emerging from within the ICA. I enthused last week about the new Guidance Notes on the Co-operative Principles. Today I want to mention a second useful publication, on cooperative Corporate Governance.

As Pauline Green puts it in the foreword, “Governance is a key component of the co-operative difference. The cooperative values and principles call for an open, voluntary and democratic process of decision-making, and cooperative governance is an essential tool in applying those values and principles.” But as I think we all know, cooperative governance is not always all it might be. In fact, it can be pretty appalling.

Rebuilding the cooperative movement means among other things encouraging better governance, appropriate to the size and purpose of each individual coop. This new publication aims to start a debate. Among other things there’s a thoughtful account by Johnston Birchall on governance in large coops, and a (perhaps deliberately) provocative chapter from Cliff Mills, who criticises the old approach in the Co-op Group and calls for adequate professional expertise to be harnessed. And there’s a delightful account from Bob Cannell on Suma’s egalitarian – and highly successful – approach to governance and management. You’ll find the report here.