I must apologise to (both of?) my readers for the long silence. I have been, and still am, very occupied with getting the manuscript (really a libreoffice document) of the law book to the publishers in time for it to come out in September. I’m also working with the Co-op Group on their Governance Steering Committee. In the meantime, here are some thoughts I shared in the Co-op News Debate on participation, membership and governance. It’s really two ideas I’ve always wondered about – the role of the employees in consumer co-ops and the mysterious idea of culture which is crucial but hard to define.
Structures, legal rules and systems can facilitate and encourage the right culture but can’t create them. That takes people. However, I’ve recently come across the work of Shann Turnbull which gives lots of food for radical thought in a similar direction. His 2012 paper “A Sustainable Future for Corporate Governance Theory and Practice” is well worth a read.
Here’s what I wrote on the Debate site:
“I have always thought it odd that employment and management practices within many large consumer co-ops have followed very traditional command and control hierarchical systems.
I see that Kelly has picked up on the consequences of this for the Co-op Bank. He includes: a tendency not to welcome challenge; a willingness to accept certain key assertions without subjecting them to proper scrutiny; a tendency to promote good news and to delay bad news; a tendency towards being inward-looking; a failure to take seriously enough the warnings given by the Regulator; tolerance of mediocrity; and less than complete transparency as factors leading to the recent calamity – see http://www.thekellyreview.co.u… pages 9-10 for the list and 129-130 for more detail.
Historically, part of the blame must go to the Webbs’ victory in the early C20th debate about the role of employees in consumer co-ops with GDH Cole, G.J. Holyoake and others and the failure of the “Co-partnership societies”. Chapter 8 of GDH Cole’s “Self Government in Industry” http://s.coop/1ucm2 promoting his “national guilds” idea explores some of the issues.
But this is not just history. Even without worker involvement in governance, many capitalist firms do better than a lot of co-ops in developing a healthy “culture”. A flatter, teamwork based approach gives people more responsibility for success or failure and rewards or losses to go with it, a culture of openness and free debate, encouraging people to learn from failures, and a business leadership happy to be told they got it wrong and open to debate and criticism all look as if they would have been helpful in the Bank. I suspect the Group and large independents could also learn from these remarks. That also involves a willingness to accept change and make tough decisions when necessary.
So Co-op principles, values and working methods are not just about governance. They are about what goes on in the organisation every day at every level as well as attitudes and approaches of openness and, yes, “co-operation” in relations between the executives and the directors.”
© Ian Snaith 2014 
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