Governance of Worker and Producer Cooperatives

Earlier this month, I had the honor of representing US worker cooperatives on a panel about governance at the International Cooperative Governance Symposium held at the Sobey School of Busines, St. Mary’s University in Halifax, Nova Scotia. Bob Cannell of SUMA and CooperativesUK moderated the panel discussion that also included Dr. Fabio Chaddad from the University of Missouri and my fellow Wisconsinite Jerry McGeorge of Organic Valley.  Rather than discuss our panel discussion from memory (since I was presenting in an open format, I did not take notes), I would like to present the opening commentary from Bob Cannell. Unfortunately, this commentary did not actually get distributed to the audience prior to the panel’s convening so we had to wing it a bit. Nevertheless, I thought that Bob’s comments were very intriguing (and some might even say inciting). I will develop my response to Bob for next week’s blog, but am interested to hear what folks think. While this was for public distribution, I did ask Bob if I may post this to my blog and he agreed, so hopefully, he will jump in to clarify points or to continue the discussion. Any typographical errors or emphasis are mine.

Bob Cannell’s Opening Commentary

“The aim of this session is to challenge our assumptions about governance in worker and producer coops. What models and tools of governance do we default to without critical assessment?

“Traditionally, in Anglo-Saxon cultures at least, worker and producer coops are lumped together. Because we are the ‘other’ type when we prioritise consumer and financial coops. In the UK traditionally, producer co-ops were the ones that made things rather than being retail businesses. These days producer coops encompass agri-coops, marketing coops, bulk buying coops and other coops where small business people join together to increase their market share.

“This lumping together ignores the specific governance needs of worker owned coops. It assumes the same modes work for both. Indeed in the UK we have a serious ‘one type fits all’ problem where generic model constitutions have to be force fitted to worker coops. And they don’t work in practice.

“We have a governance gap. Legal constitutions that tell worker coops how they should govern themselves which do not work in practice in the special circumstances of a worker coop where the workers are owners and are also often the managers as well. Three hats to juggle. The old ways to govern are too slow, too cumbersome, too bureaucratic to fit modern business needs and the needs of small start up worker coops.

“Francophone, Italian, Spanish and Brazilian traditions keep worker coops separate and so think about their specific govenance issues.

Accidents of History.

“Are the governance needs of worker coops really distinct from those of producer and other coops?

“Are we habitually using the worng governance tools for workers coops just because we haven’t looked for better and fit for purpose tools?

“Governance. What is it? It’s the legal constitutions (andin the UK worker and consumer coops share the same legal constitutions) but it is also the management tools used in the coop to take decisions and resolve disagreements. We call these ‘cooperative working skills’. They can range from full executive management pyramids to flat hierarchy collectives. Skill needs in these are obviously very different.

“Worker coop governance traditions are very different in different countries and cultures. The relative success of the worker cooperative model is very different also.

“I am from the 1970’s anarchist worker coop tradition. My coop Suma is a radical collective with no CEO, no MD, no permanent chair. Indeed almost no executive management. It relies on the cooperative working of 140 largely self-managing members. Coordination is by consensus mostly. Yet we are very successful paying very high wages, big bonuses and out competing multi-nationals despite our small relative size. There are a few other successful worker collective in the UK but most just survive haphazardly.

“Our traditional worker coops from the 19th century were castasrophically unseccessful. They were run using orthodox executive management structures and failed enmasse either as businesses or being privatised if successful. Indeed the 1890 Cooperative Congress decided that the worker owned cooperative model had failed and cooperative production (for coop stores) should henceforth be owned by the consumer owned retiail coop socieities. Thus we moved from a cooperative commonwealth to a cooperative federation.

“Enough of the history lesson. Today we have only 400 small worker coops in the UK, the same as in the USA. There are no official worker coops in Germany or the Netherlands. More or less none in white Australia or white New Zealand.

“Why is the worker coop model so much more successful in so many Latin cultures: French, Italian Spanish, Brazil (but not Portugal) than Anglo-Saxon cultures? 2000 and rising in France, 25,000 in Spain plus Mondragon, 30,000 in Italy, many thousands and increasing fast in Brazil. Compare Quebec to the Anglophone parts of Canada.

“Is there something culturally specific about the governance needs of worker coops? Something they do right in Latin countries and regions and we don’t do properly in Anglo-Saxon ones? Something which some ouf our radical collective in the UK such as Suma and Unicorn Grocery have hit on but many others have missed? What is it that we can’t see?

“I have ideas which I’ll touch on in the discussion and cover in detail tomorrow in my presentation on complexity thinking and worker coop governance.

“Let’s look at Employee Ownerships. Very successful in the USA, 13% of business have either significant, majority or 100% employee owned but not employee controlled. UK has a  long tradition of employee owned business (John Lewis Partnership) and currently a big government push to expand the employee ownership sector. There is big competition between worker coops and employee ownership ideas in the UK.

“In the USA, worker coops only have had a federation since 2006.  Why is employee ownership ok in Anglo-Saxon countries by employee control is not?

“Does the distinction matter? It doesn’t seem to in Spain. COCETA and CONFESAL work together. What are the strengths of the worker coop model that the Latin countries use and the Anglo-Saxon countries do not?

“Clearly the opportunities to grow the worker coop sector in Anglo-Saxon countries are enormous if we can define goverance models that make sense to the Anglo-Saxon mindset. So what are they?

“Let’s enjoy speculating about those differences, about the weaknesses and strengths of thw worker cooperative model and how it should be governed.”

Thus ends the opening commentary that wasn’t.

I hope, that like me, you found yourself wanting to respond to Bob’s comments. Please do–I have thoughts that I will post next week, but hope that this is the beginning of a discussion.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-ops in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University.
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