The Big Debate – How to balance co-operative values and business

What does it mean to be co-operative? This was one of the questions explored at the Big Debate, organised by Co-operative News during its annual meeting. Hosted by Co-operative...

What does it mean to be co-operative? This was one of the questions explored at the Big Debate, organised by Co-operative News during its annual meeting.

Hosted by Co-operative News executive editor Anthony Murray, the debate saw a panel of speakers from across the co-operative movement exploring how co-operatives can differentiate themselves and assert their distinct model while balancing co-operative values and business needs.

Asked whether there was a tension between co-operative and business values, Stéphane Bertrand, executive director of the International Summit of Cooperatives, said: “I don’t think there is. The strength lies in putting the human in front of financial capital. Strong governance is driven by the seven principles.”

Leslie Reznicek, outgoing president of the Co-operative Group’s members’ council, added: “The co-operative business is our values and principles. It’s all about members – our values and principles give us the uniqueness that no other business has, and that’s what we should focus on.”

Bob Cannell, member-owner of Suma Wholefoods, a Leeds-based worker co-operative, said some worker co-ops had failed because they focused on the business side and forgot the importance of democracy. “That’s when we wrote the worker co-operative governance code worker co-operative governance code for Co-ops UK, which has now gone around the world,” he added. “If you use the co-op principles as basis of governance then you get a really strong business – they’re tools for business.”

Chief executive of the Plunkett Foundation, Peter Couchman, talked about what co-operatives could do to engage members. He argued that co-ops needed to present themselves as solutions to the problems people faced.

While they need to show their values and principles, they should also propose a set of actions to support those values, he said, adding: “Our values are mainstream to society – the problem is they don’t see them exhibited enough.”

Another challenge for co-ops is that some of their values are appealing to other companies, with corporate social responsibility being an important issue on the wider agenda. “These groups are taking our values and putting them in their own – if we want to be distinct again, we need to push to go further in those things,” said Mr Bertrand.

Ben Reid, chief executive of the Midcounties Co-operative, highlighted that some plcs were scoring higher than co-operatives in corporate social responsibility indexes. “Every business needs something central that drives it forward. I’m lucky I’ve got the co-op values. We need to prove that co-operative values work. The vast majority of our 9,500 colleagues understand values, but have to keep working at it. It’s fundamental.”

Embracing values and principles is not necessarily easier for worker co-ops, said Bob Cannell. He explained that often people in worker co-operatives were under-skilled and did not know how to manage a business democratically.

“Often people are just trying to keep the business going and they are very vulnerable to the dominant ideology that it’s all about the money,” he added. “It isn’t. In co-ops, it is all about the people: the money is a vehicle, not the end, so in a co-op it can be different.”

Mr Couchman said Plunkett had worked with many people who considered the co-op option as a solution to their problems. “They don’t come in to implement values, they learn about values by actually doing it,” he added.

“Co-ops intervene in the market on behalf of their members. At community level this is the strength. On a smaller level people have the motivation to do it, but it can be done at a larger level, too.”

Ms Reznicek also explained that the Co-operative Group aimed not only to sell food, but to embark on a journey by enabling members to get input in its food policy and sourcing and determine, to some extent, where community funding went.

“As a council we need to find better ways to engage members – it’s just 100 of us. What kind of food do we want to see in the store, where and how? We’ve got to show people in our communities that we work differently.”

Asked whether there were any incentives from the executive point of view to follow values and principles, Ben Reid said that no figures proved this was the case. “We need to find the blend of talented people for management positions who think the right way and understand what organisation they have joined. Working for an organisation led by members is a great place to be, you see co-operation in action. The incentive is more emotional than it is financial,” said Mr Reid.

Ms Reznicek added: “It is a matter of creating surplus in business to reinvest for members. I don’t see that as a measure. I see people that want to engage with us, come to the AGM and let the council know what they are thinking.

“The Co-operative Group may have been through a difficult time but, in my village, it is one of the most profitable stores and it’s got community written all over it. We run different community events and people are talking to the manager about the community. It’s a real buzz, so we can do it.”

Eileen Driver, board member of Co-operatives UK, asked speakers if they believed a co-operative was more successful if it had smaller gaps between the lowest and highest paid employees.

Ben Reid replied that Midcounties’ policy means he is paid across the nine businesses he runs on behalf of the society, but that “we’re not prepared to pay market rate”.

He added: “I couldn’t have been with the co-op without understanding the tension about this, so I don’t get defensive. It’s for others to judge whether I deliver value – as long as co-op members are prepared to vote and it’s transparent then that’s OK.

“Co-ops are a democracy.”

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