Crowdfunding may help French daily paper become a coop

I’m interested in a story which is just breaking in France, where journalists and other staff at the regional daily newspaper Nice-Matin are successfully tapping into crowdfunding to raise money for a potential cooperative take-over of their title.

The French press is in as much of a mess as the British.  Nice-Matin (the main daily for the Med coast in the Nice area) is currently in receivership, reportedly losing EUR 500,000 a month.  Various commercial media interests are expressing interest in buying the title, but only on the basis of major compulsory redundancy programmes which could shave perhaps a third off the current workforce tally of 1180.

Is there a better – a cooperative – answer?  François Roubaud, one of the journalists (and one of the union reps at the company) hopes that there is.  He has been the leading light behind the idea to work for an employee-based takeover of the newspaper (which also includes sister titles in Corsica and the Var region), which would be registered under French worker cooperative legislation as a SCOP (Société coopérative et participative).  There’s been a lot of this going on recently in France:  I researched recently for a client the stories behind the successful worker takeovers of the Auvergne textile firm Fontanille, formerly a family-run business,  and the print company Hélio-Corbeil, and I’ve also blogged here about the conversion of the Channel ferry service formerly run by Seafrance into a SCOP.  All these cooperative buy-outs were strongly aided by the trade unions.

The Nice-Matin workers are appealing on the crowdfunding website Ulele for EUR 300,000, and last time I looked had successfully got to the half-way stage.  The crowdfunding is part of a much larger recapitalisation plan, which includes a major investment by the employees (around four hundred employees are committing to investing EUR 3500 each) and by the regional cooperative association URSCOP, as well as by external investors and the banks.

I have written a news story for Co-operative News about the Nice-Matin developments and will draw it to your attention when it is published. In the meantime, the piece I wrote for the Guardian last year on proposals for cooperatively-run local newspapers in Britain is still available online.

If you have the odd few euros available, Nice-Matin’s Ulele website is at http://www.ulule.com/sauvons-nicematin/

Compromise on the cards at the Co-op Group

“Take my proposals in their entirety or you’re doomed.”  I am exaggerating Paul Myners’ ultimatum to the Co-operative Group’s Board on corporate governance reform earlier this year, but only slightly.

We now know that Myners’ proposal for a Co-op Group board full of the usual sort of independent non-executive directors is likely to be sweetened by a small number of places left open for representatives of ‘ordinary’ members (… as I predicted here at the time of the Co-op Group’s AGM).  Whether a handful of ‘democrats’ can adequately prevent the Group for heading off in the same direction as all those building society boards notionally accountable to their members is debateable, but my prediction this time is that the compromise will be accepted.

What’s disappointing is that the presence of ‘ordinary’ people on the Co-op Board’s has been seen (pace Myners) as a problem.  It could and should be seen as just the opposite – as potentially giving the Group a competitive business edge over non-cooperative competitors.  (Admittedly, I accept that that word ‘potentially’ is necessary in this assertion).

I think we can now start to make an early assessment of Myners’ contribution to the Group during his short time on the Board. I fear that my verdict would be a negative one. I think Myners was too hidebound by his experience of traditional finance sector Boards and their way of doing corporate governance, and too autocratic in the way he approached his task at the Group.  This is a pity: a leader with more sensitivity to cooperative heritage and culture could have led the movement towards taking a historically momentous step towards a more accountable and democratic way of operating.

Going for ever: ‘industrial and provident societies’

Tomorrow we say farewell to the Industrial and Provident Societies Act, the legislation which has provided a legal framework for the vast majority of Britain’s coops for over 110 years.  We welcome instead the new Co-operative and Community Benefit Societies Act.

It was two early cooperative pioneers (both members of the group known as the Christian Socialists) J M F Ludlow and Edward Vansittart Neale who shepherded the first IPSA through Parliament in 1852, giving cooperative societies at least some of the legal protection which they needed to develop.  In hindsight it might have been even better if Neale and Ludlow could have arranged for the legislation to be called the Co-operatives Act but, never mind, we’ve learned to live with ‘industrial and provident societies’ over the years and in fact I will almost mourn their disappearance into history.

Don’t get too excited,  however: the new law is simply an act consolidating existing legislation, and won’t introduce any new powers for cooperatives.  I wrote about the change earlier in the year for the Guardian: it’s here, if you’re interested.

What future(s) for Britain’s credit unions?

I’ve been looking at the HM Treasury document published last month as part of its public consultation on the future of credit unions in Britain.

The government is asking, among other things, about credit union legislation and the future of the common bond concept.  Or, in short, it’s asking what needs to be done to make credit unions more secure and more effective.

I do admit to the occasional worry about our credit unions.  I worry on the one hand that, as the trend grows for them to become bigger and more professional, they are heading off in exactly the same trajectory as our building societies, where member ownership became little more than a legalistic formality.  I worry about my credit union no longer feeling as though it is ‘mine’, or rather ‘ours’.  But then conversely I worry that strategic oversight by elected volunteer boards isn’t really up to the job of looking after its members’ money in a properly efficient way. A friend complained the other day that she’d been waiting a month for her (and my) credit union to sort out a problem with her account.  The letter she’d sent had brought no reply.

I suppose I have another worry, too, and that is ironically caused by the very enthusiasm with which the government recently has been embracing the credit union idea, as the answer to everything from loan sharks to small business finance needs. As coops around the world know very well, too much top-down influence (and funding) doesn’t always produce the most appropriate answers.

It’s interesting is to see what we can learn from countries where the credit union movement is more developed, so it’s fortuitous that the latest issue of the Journal from the Society for Co-operative Studies which has just arrived through the post has a useful piece by Paul Thompson on credit unions in the US.  What’s particularly interesting – and perhaps slightly depressing – is to see how closely the three challenges Paul identifies for the US movement mirror what I see as the issues here too.

The first, according to Paul, is the challenge of fostering credit union philosophy (he calls for credit unions to have a ‘philosophical compass’ to keep them on the right path of providing honest reliable service to members, and avoiding staff convenience and self-aggrandisement).

Secondly, he identifies a challenge of maintaining credit union democracy  as they grow in size and lose direct contact with members.  And thirdly he detects a governance challenge for management boards (“During the past 40 years, boards of directors have been playing catch-up in terms of understanding their credit union’s business”).

Back to the UK:  the government’s consultation period lasts until September 1st.

Another cooperative bank demutualisation

Vivian Woodell of the Phone Co-op has drawn my attention to a news report of the proposed stock market flotation and demutualisation of a small cooperative bank in Melrose, Massachusetts (here). You’ll see that Vivian has also added his own comment on the webpage, making the point that “the fundamental purpose of a shareholder-driven business is to make money for shareholders, whereas the purpose of a co-operative is to serve its members”.

Capital has been identified by the International Co-operative Alliance as a key issue for the global cooperative movement to debate, and the ICA’s absolutely right.  We have lost too many cooperatives (especially financial and agricultural cooperatives) over the years to the private sector because traditional equity capital seemed to be the only new source of capital on offer.  We need some innovative solutions for capital for coops, including taking a new look at the opportunities for member-provided investment capital.

Cooperative data should be free to search

As the business press reported earlier this week, the government intends to make company data from Companies House free to access from next year. This is a welcome development, and will make it easier to get information on companies, their activities and who owns and runs them.

What about cooperatives? As I mentioned some time back, data on coops and mutuals are held separately, at the Mutuals Register run by the Financial Conduct Authority, and the fees (£12 for an electronic document, for example) are very significantly more than Companies House’s current equivalent fees.

We should be pressing for cooperative records to be free to search, too. Ed Mayo at Co-operatives UK tells me that his organisation has long called for equal and easier access to cooperative data and that they’re monitoring the current development. Time to get lobbying again, I think.

The state of the British coop economy

This year’s version of the facts and figures booklet from Co-operatives UK The UK Co-operative Economy is now out. It’s a useful reminder that there are more coops out there than just the troubled Co-operative Group, even if the Group remains very much at the top of the table in terms of size.

You do have to interpret the data. Britain’s worker-owned coops are shown as, together, turning over £10.7 billion, but read more carefully and you’ll find that almost £10.2 bn of this is the trade of one business, the John Lewis Partnership, which is arguably only a sort-of-cooperative-and-not-a-coop-at-all-if-we’re-being-very-strict.

It is of course famously difficult to define the cooperative economy. Nevertheless if John Lewis and some very conventional farming businesses  get admitted, then shouldn’t the UK’s remaining mutual insurers also get a look in? And what about the building society sector whilst we’re at it?