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?

Suma is ‘coop of the year’

I’m not necessarily a great fan of prizes and competitions but I have to say that the workers’ cooperative Suma, based just a few miles away from here close to the M62 motorway, fully deserves their award from Co-operatives UK as Cooperative of the Year. I reported on their recent successes in a blog earlier this year (you’ll find it if you look back to my entries for mid-March).

As well as Ed Mayo from Co-ops UK the current TUC President Mohammed Taj visited Suma last week to present the award. The press release I’ve been sent includes a quote from Suma’s Bob Cannell, which is interesting if like me you’re interested in the relation between coops and trade unions.

“Suma has had a BFAWU [bakers’ and food workers union] branch for 30 years now and around 80% of our worker members are union members,” Bob is quoted as saying. “Union advice and support has proved invaluable over the years, for individual workers and for our co-operative, demonstrating that worker co-operatives and trade unions can work together for mutual benefit; it has certainly worked for us.”

On worker(s’) cooperatives

I was writing a piece yesterday about the way that cooperatives adhere – or sometimes don’t adhere – to core labour standards and fundamental rights in the workplace and was advised to have a look at the World Declaration on Worker Cooperatives, prepared by the global worker coop federation CICOPA and agreed in 2005. It’s good. I like the definition of workers’ cooperatives “having the objective of creating and maintaining sustainable jobs and generating wealth, in order to improve the quality of life of the worker-members, dignify human work, allow workers’ democratic self-management and promote community and local development”.

I hadn’t come across the Declaration before and should have done, I think. Well done, CICOPA.

Incidentally, just as we in Britain say tomahto and over in the States they say tomaato, we say workers’ coop and they say worker coop. How did that come about?  Should we try to come to some sort of agreement on this?

Here’s how member democracy works at the Nationwide

I have just been invited to take my part in the Nationwide Building Society’s democratic process. Or in other words, the voting paper for the 2014 AGM has arrived in the post.

I will vote, of course, but I can’t say I’m very excited by the prospect. The way member control operates in the Nationwide (as in so many other larger building societies) is not an attractive one. We are invited to endorse – or otherwise – the board members already in place. There are no alternative candidates to select.

The board is, in short, a self-perpetuating one. In years where board vacancies occur new directors are co-opted and only subsequently presented to the membership for endorsement. This may well produce a board with some of the right professional competencies, but it doesn’t suggest an organisation where members’ voices can really be listened to.

Actually, Nationwide is interesting because there was a time back in the 1990s when independent candidates regularly stood against board nominees and were actually elected to the board on (from memory) three occasions. I remember covering the news when the first independent, Sheila Heywood, was successful in her election. Some of this interest by activists in the Nationwide was historical, coming from the fact that Nationwide was originally the cooperative movement’s building society.

Recent times have seen attempts at direct member candidacy in building society elections wither away (leaving aside for a moment the Ecology). It’s a pity. It’s also directly relevant to the debate at the Co-operative Group on future governance arrangements since Lord Myners’ recommendations propose a very similar arrangement for board elections as building societies.

In the meantime, back to my voting paper. I see that Nationwide’s chief executive Graham Beale has target remuneration of £2.31m for 2014/15, with a possible maximum of £2.74m. Curiously, these amounts are given by Nationwide in the booklet to members as £2,312K and £2,749K – is this because somehow that way they seem less gigantic?