Co-ops can learn from principles that have been used to successfully manage common pool goods like irrigations systems for generations.
There are many things that make co-operative enterprises different from investor-owned firms. Chief among these is the members’ control of how the business is governed. However, this unique aspect of co-ops is not without its challenges. Anyone who has been involved in guiding a co-op can attest to this. And when a co-op’s members are themselves co-ops, rather than individuals –that is, when they are second-tier co-ops– these challenges can be amplified. Continue reading →
In our Two-Hats post, we argue that directors of a second-tier co-operative must put the interests of that organization first when they are actively engaged with the board. This, in turn, means they cannot act as a “representative” of their first-tier organization while sitting on a second-tier board. But, if this is the case, where does representation occur?
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 →