When I first started studying co-operatives as a graduate student, the first article I read was a piece provocatively titled “All firms are cooperatives – and so are governments.” Its author, Yale law professor Henry Hansmann, claimed exactly what you would expect from the title: that investor-owned businesses were no different in their structure than co-operatives. Continue reading
The Amalgamation Question
From the time the first credit union was formed in Saskatchewan in 1910, 380 individual credit unions were incorporated. Today, there are 44 (SaskCentral). Co-opertives and credit unions usually start out small, serving the needs of geographically defined members. The power and appeal of the credit union is in locally-based decision making and connection to the local community. When credit unions have been in existence for multiple generations, the communities change, economies change, and environments change. The board is tasked with ensuring the credit union is sustainable both today and in the future. Can credit unions that were formed under different circumstances continue to provide quality services to their members in their new realities? When does the amalgamation question arise? Continue reading
MEC — a large Canadian retail co-operative that specializes in outdoor activity equipment — implemented a number of controversial changes three years ago to strengthen the knowledge and skill sets at its board table and to ensure its governance structure could continue to guide the growing company.
Formerly known as Mountain Equipment Co-op, MEC was started by a small group of friends from the University of British Colombia who found they couldn’t buy good quality climbing gear in Canada. Since its inception in 1971, it has grown to twenty stores across the country, with 4.5 million members and $366 million in annual sales. With this growth and the expectation of further growth, the co-op felt it needed a more experienced board to navigate not only its scope, but also the increasingly competitive market for the goods it sells. Continue reading
Murray Fulton and Brett Fairbairn
The following question was recently posed to us regarding governance models for second-tier co-operative organizations such as federated wholesalers and financial centrals: Is there an expectation that board members must think about the interests of the second-tier organization or should they represent their home organization?
This question nicely encapsulates what Glen Tully, chair of the Centre’s Management Advisory Board, calls the Two-Hat Problem. When board members have two hats they can wear, which one should they put on? Continue reading