Joannidès de Lautour, V. and Cortese, C. (2016), "Cooperatives: governance and accountability systems for a better world?", Journal of Accounting & Organizational Change, Vol. 12 No. 1. https://doi.org/10.1108/JAOC-03-2015-0033Download as .RIS
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Cooperatives: governance and accountability systems for a better world?
Article Type: Guest editorial From: Journal of Accounting & Organizational Change, Volume 12, Issue 1
To date, there are few general studies on cooperatives, with some being empirical, practical or issue-driven (Tchami, 2007 ) whilst others are very specialised (Gouil, 2010 ; Jaumier, 2016 ; Jaumier et al., 2012 ; Joannidès, 2013 ). In most cases, most studies focus on a particular type of organisation, generally farmers’ cooperatives (Deroy and Thénot, 2012 ; Thénot, 2011 ; vanPeursem et al., 2016 ). Considering cooperatives as case studies often leads to empirical discussions of particular industries or countries, but rarely leads to a conceptualisation of the issues that affect the cooperative form (Béziaud, 2012 ; Diaz, 2012 ; Filippi, 2012 ; Fortin, 2012 ; Salgado, 2012 ; Zhang and Mu, 2012 ). Apart from a growing number of publications in French, Spanish and Portuguese, only Organization has devoted a special issue to cooperatives.
The year 2012 marked the United Nations International Year for Co-operatives (United Nations, 2012a ), yet the year came and went with little fanfare attached to this growing form of social organisation. Not quite a business structure and not quite a social network, perhaps it is the ambiguous nature of this form of enterprise that renders it almost absent from our consciousness. Absent until, that is, we realise that cooperatives are all around us and have been for centuries.
Consider the farmer’s associations that coordinate production, supply and distribution of fresh food, the condo association that runs the housing development in the local neighbourhood, the amalgamation of grocery stores that “bulk buy” and pass their savings onto customers, and the credit unions that give special rates to members. From its earliest form as the Fenwick Weavers’ Society in Scotland circa 1,761, to the formation of the Rochdale Society of Equitable Pioneers, a group of mercantile traders in England in 1844, cooperatives nowadays operate in some of the world’s most competitive industries, boast nearly one billion members and are worth an estimated $1.6 trillion (United Nations, 2012b ).
It is the cooperative principles of organisation that unite this type of organisational structure, with the Rochdale Principles of the 1880s forming the basis for those adopted by the International Cooperative Alliance (ICA) in 1937 and used by cooperatives around the world to this day. These principles are based on open, voluntary membership, democratic governance, education and cooperation (International Cooperative Alliance, 2014 ).
In a world where social and environmental consciousness is increasing rapidly, cooperatives offer a vehicle, whereby economies of scale can be maximised in a collective and democratic way. The ICA’s vision is for the cooperative form of organisation to become the fastest growing form of enterprise by 2020 and an acknowledged leader in economic, social and environmental sustainability (International Cooperative Alliance, 2014 ).
From an informal research group to a Journal of Accounting & Organizational Change special issue
This special issue is part of a global movement calling for greater integration of cooperatives in the business world, in society and in academe. It originated from the formation of a research group on cooperatives in 2011 at Grenoble École de Management in France – GEMCOOP. Some of the group’s members had been active members of the cooperative world whilst others were interested in the cooperative form from a research perspective. In this editorial paper, we want to provide our readers with some background features to this special issue and also wish to show what can be learnt from it so as to set a research agenda.
In November 2011, a first workshop was organised with practitioners, as we wanted to understand how we could bridge our academic interests and their own agenda. To our great surprise, it appeared that they were calling for research aimed at conceptualising and theorising a world, which is, of their own admission, scattered and oftentimes misunderstood. They explicitly asked us to do research on them and offered unrestricted access to their organisations as sites for future research projects.
As part of the UN Year of the Cooperative, numerous events with practitioners were organised all over the world. At the end of 2012, two complementary events took place:
1. the annual summit on cooperatives in Quebec in October; and
2. an academic workshop on cooperatives at Grenoble École de Management in December.
A number of publications were associated with this workshop, including this special issue of the Journal of Accounting & Organizational Change. Papers written in French language were sent to a special issue of Revue des Sciences de Gestion and we were commissioned by a French publisher to write a reference book on cooperatives that would be relevant to academics, practitioners and students. In parallel, Organization was publishing a special issue on workers’ cooperatives.
The special issue itself
Two of the papers in this special issue were the result of the 2012 GEMCOOP workshop (Jaumier, Naszalyi), whilst the other two (van Peursem et al., Mammouni-Limnios et al.) were received in response to our call for papers.
The papers by Jaumier (2016) and Naszalyi and Slama (2016) were written from different perspectives, with Stéphane Jaumier, a PhD student involved in the development of a workers’ cooperative, while Philippe Naszalyi has long served as a director on a range of cooperative boards. Naszalyi has also long been the editor in chief of the French Revue des Sciences de Gestion. Both papers have the agenda of bridging academic and practitioner concerns. On the other hand, van Peursem et al. and Mammouni-Limnios et al. offer papers that are more familiar to an academic audience.
The issues studied in those four papers are very different and do not overlap, thereby offering a multifaceted view of the issues that might confront cooperatives. Van Peursem et al. study the interplay between various forms of accountability in a farmers’ cooperative. Applying a socialising accountability theory, vanPeursem et al. (2016) conducted interviews with 23 directors from 6 dairy cooperatives in Australia and New Zealand with the aim of understanding how these directors respond to and manage their accountability relationships with farmer-stakeholders. In doing so, they highlight the complex, shared, and often personal relationships between directors and stakeholders that are a feature of cooperative boards.
Mammouni-Limnios et al. examine Cooperative Capital Units, a type of financial instrument unique to the cooperative form, and how this source of finance is being used to maintain the viability of cooperative business models. Through workshops and focus groups, Mammouni-Limnios et al. examined the governance structures that support cooperative financing mechanisms and proposed an equity structure that could be implemented to address the needs of investors and cooperative members.
Naszalyi and Slama’s paper shows the political, legal and social issues at play when a French association for aged-care and disability services moves to adopt the cooperative form. Although we could intuitively think it would not pose too much of a problem, Naszalyi and Slama warn us against unexpected difficulties.
Lastly, Jaumier discusses the case of partners to a CA/CPA firm who are retiring and want to transform their company into a workers’ cooperative to facilitate its continued existence following their retirement. Jaumier reasons that this transformation has not happened, as nobody understood the rationale for getting cooperative, so that those who were supposed to be interested in this endeavour were eventually not.
Lessons we can learn from this special issue
This special issue complements the findings of a French reference book that studies the cooperative form (citation). First, activism and realism are always balanced in the development of such an organisation (Daudigeos, 2014 ; Davis, 2014 ; Jaumier and Javicoli, 2014 ). This is an interesting premise for Jaumier’s paper. Second, the scope of available financial instruments and the limits posed by conventional capital structure are exposed (Monvoisin and Ansart, 2014 ), thereby opening for Mammouni-Limnios et al.’s study. Also, the motivation of a co-operator-entrepreneur is advanced (Le Loarne and Sadi, 2014 ; Moulin, 2014 ) in the light of how having a cooperative governance and accountability system can provide a competitive advantage (Cateura and Becuwe, 2014 ; Mammouni-Limnios et al., 2016 ; Sadi and Moulin, 2014 ).
What is striking in the literature on cooperatives is that workers’ cooperatives are much studied, whilst other forms of cooperatives are left aside. In this special issue, van Peursem et al. address the case of a suppliers’ cooperative and conceptualise an accountability model that may be applicable regardless of who the organisational stakeholders are.
We are proud of our special issue’s ability to meet one of our community’s concerns consisting of bridging practice and academe (Chalmers and Wright, 2011 ; Guthrie et al., 2011 ; Naszalyi and Slama, 2016 ). Naszalyi and Slama endeavour to bring to our attention practitioners’ day-to-day concerns and offer a generic understanding thereof. Although absent of theory, they reaches level 3 in theorising by the systematic use of concepts explaining the relationship between issues and themes well known to us separately (Llewellyn, 2003 ). Likewise, Jaumier considers the practical implications of a business’s movement towards the cooperative form. At the other end of the spectrum, van Peursem et al. as well as Mammouni-Limnios et al. theorise accountability, on the one hand, and financing arrangements, on the other, to enrich our understanding of the social and governance structures that support cooperative accountability.
All in all, to do justice to the cooperative world and this need for bridging practitioners’ concerns and academic issues, these four articles need to be read together, as they eventually respond to one another and contribute to the same goal: understanding how cooperative governance and accountability contributes to a better world. A major contribution of these four papers lies in reminding us that a cooperative is, foremost, a social project based on the development of strong identity, member equality and grounding in a territory.
Given the limited space we had in a special issue, we made the choice of internal consistency over variety, which led us to choosing papers mostly presenting workers’ cooperatives and, to a lesser extent, farmers’ cooperatives. In so doing, we have left aside suppliers’ or users’ cooperatives. Hence, at the same time, as we acknowledge the need for more systematic and abundant research on workers’ cooperatives, we see a major need for publications dealing with other forms. Such a need was exacerbated in October 2014 at the second International Summit on Cooperatives held in Québec where the need for academic engagement was noted by several participants. Co-operators from developing countries expressed the need for models and theories that would take economic development into consideration when conceptualising the so-called cooperative model.
Vassili Joannidès de Lautour - Gestion Droit Finance, Grenoble Ecole de Management, Grenoble, France, and
Corinne Cortese- University of Wollongong, Wollongong, Australia
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