The Dutch National Cooperative Council (NCR) has released a new governance code that co-ops can use to modify management structures as well as to improve day-to-day management and supervision.
NCR published its first governance code in 2005, with a second edition being released in 2011. The new code, based on Dutch company law, has been developed to respond to new governance tendencies within Dutch co-ops. While it is not legally binding, co-ops can apply the code on a voluntary basis.
Co-operatives in the Netherlands are required by law to have a two-tier governance structure, with a management board and a supervisory board. The management board overlooks the executive, and is itself overseen by the supervisory board.
Traditionally, both boards were made up of members, but the tendency in most Dutch co-ops is for management boards to consist of professional non-member managers, while the supervisory board is made up of members.
A third model also exists, the “hourglass model”, in which the co-op restricts its activities to the management and financing of the subsidiaries. The managing directors of the mother co-op sit on the supervisory board of the subsidiary. This means a full or partial personnel overlap on the boards of separate legal entities.
As Dutch co-ops grow and become more professional, they seem more likely to replace the traditional model with the executive model. Larger co-operatives often elect a members’ council to function as a consultation body.
Even though Dutch law requires co-operatives to have a two-tier structure, it is possible for organisations to opt for a one-tier board structure under the European Cooperative Society (SCE) management model. This European legal entity is aimed at those co-ops with members in various EU member states.
The full text of the governance code is available online.