Monique Leroux, Desjardins CEO shares her view on the Quebec Summit

In a series of special articles leading up to the International Summit in Quebec, Co-operative News spoke to Monique Leroux, Chair of the Board, President and CEO at Desjardins Group who shared her vision of the Summit.

What do you expect to gain from the International Summit?

With this event — which could be repeated in future editions — we're hoping to create “The World Co-operative Forum”. Our goal is to use this Summit to increase awareness of the co-operative business model among the general public, governments and regulatory authorities.

The Summit will bring together co-operative and mutualist leaders from around the globe under the theme “The Amazing Power of Co-operatives.”

We are expecting over 2,000 attendees and some 150 high-profile speakers, including several Nobel laureates. Among them will be economic laureates Michael Spence and Elinor Ostrom; the economist and writer Jacques Attali; and the economist, political scientist and alterglobalist Riccardo Petrella.

In addition, to spark discussion, we will also be unveiling a number of ground breaking international-level studies. The Summit will thus contribute to enhance the collaboration between academics and practioners and provide them with in-depth content material and best practices about the co-operative business model.

Do you believe the International Year of Co-operatives (IYC) can mark a historical turn in the co-operative sector?

Absolutely. By proclaiming 2012 the International Year of Cooperatives, the United Nations has given us a golden opportunity to promote this business model that we believe in so wholeheartedly. By virtue of this declaration, the UN has underlined the relevance of co-operatives in the world today.

Have credit unions proven to be more sustainable enterprises? How did Desjardins face the recession?

Based on what has been compiled worldwide on how banks and financial co-operatives managed through the 2008 crisis, most recovered better and faster than many commercial banks. The reason is that while co-ops are driven by long-term objectives, a lot of banks were involved in speculative investments with short-term gains. 

In terms of the recession, Canada and Québec — where Desjardins Group is headquartered — were not as affected, compared to the US or Europe, for example. The Canadian economy proved to be robust and our public finances have been well managed over the last years.

However, Desjardins Group, like most financial institutions, suffered from the 2008-9 financial crisis. But thanks to its solid capital base and prudent management approach, it was able to cope with little consequences. We also pride ourselves in having one of the strongest capital base in the banking industry in Canada and in North America. We actually rank second in North America and first in Canada, with a 16.1% Tier 1 capital ratio, measured under the Basel II regulatory framework.

Desjardins' strong capitalization was recognized over the last years in different ways. We are 96th in the Top 1000 World Banks 2012 by The Banker magazine, a ranking that is based on Tier 1 capital. We are also very well positioned in the "World's 50 Safest Banks" ranking published by New York-based Global Finance magazine. Desjardins Group was ranked 16th worldwide and 3rd in North America, ahead of all US banks and several Canadian banks.

Are there misconceptions people tend to have when it comes to credit unions and co-operatives in general? How can these be addressed?

Even though co-operatives may not be well understood by the general public, they play a huge role in today’s economy. For example the largest 300 co-operatives in the world — in all areas of activity — generate over 1,600 billion CAN dollars’ worth of business each year. This is the same amount as Canada’s GDP, which is the tenth largest economy in the world.

If co-operatives are not well known, it might also be that many of them hide behind familiar brand names. Everyone in North America knows Sunkist oranges, but most people don’t realize that Sunkist is actually the biggest fruit and vegetable marketing co-op in the world. It has been around since 1893 and its members are fruit growers in California and Arizona. 

This kind of long-term sustainability is not uncommon for co-operatives. For example, Desjardins has been in operation for 112 years. Of the largest 300 co-operatives worldwide, close to forty are even older than Desjardins. The Crédit Mutuel in France was founded in 1880 and Holland’s Rabobank was established in 1898. Quebec data shows that 44% of new cooperatives are still active 10 years after being established. That is twice the survival rate of businesses in general. 

You said that a new economic order is emerging. What role do you believe co-operatives will play in the global economy in the future, particularly in developing countries?

Over the past few years I have come to know the great power of co-operatives, both personally and professionally, and what they have to offer. This has become especially clear given our current economic and financial climate. Now, individuals and communities are looking for new models and new ways of working together to build society.

For the last 40 years Desjardins Group, through its unit Développement international Desjardins (DID), has been helping several developing countries to set up or consolidate financial co-operative systems. 

Today DID supports co-operatives that reach some eight million individuals, particularly in Africa, Latin America and Haïti. I truly believe that the co-operative model is one that best meets the needs of developing countries, as it is a model that is based on democracy, equality and solidarity.

Monique F. Leroux is the Chair of the Board, President and Chief Executive Officer of Desjardins Group. She is currently a member of the Canadian Council of Chief Executives and the Founders' Council of the Québec Global 100 network.

She is also a member of the United Nations IYC Advisory Group (International Year of Cooperatives), member of the Board and the Executive Committee of the European Association of Co-operative Banks.

Desjardins is the largest financial co-operative group in Canada. It offers complete banking services to nearly 6 million members and clients.