On corruption and delusion

As I think I’ve mentioned, I’ll be at the cooperative conference in Manchester on Friday May 16th, called by Co-operative Business Consultants and others in the movement to help pick up the pieces and rebuild.

I’ve begun to think about the presentation I’ve been asked to do for the workshop which bears the title corruption v. transparency. I’ve said before that a very valuable – if depressing – piece of work for a cooperative historian would be track the story of corruption in cooperative societies from the nineteenth century through the dog days in the second half of the last century and up to our own times. Why would this be valuable? Because it would warn us how not to repeat the mistakes of the past.

Jo Bird, one of the conference organisers, drops me an email to discuss the workshop and makes a very valid observation. She writes of Johnston Birchall’s recent report for Co-operatives UK on governance in large co-ops which lists several examples of corruption in UK coops: “Corruption and malpractice is not talked about enough. Birchall’s list was such a contrast to the unwritten but prominent co-operative value of delusion . Delusion manifests in attitudes such as ‘we are all good guys and rarely do wrong’,” Jo says. I think she’s right.

2 thoughts on “On corruption and delusion

  1. I look forward to your presentation. As a member of Central Midlands Co-operative a Co-op whose CEO was jailed I am well aware of the failings of people. I used that fact and others in presentations to staff, co-operators and wider audiences to confirm the need for good governance. However I hope you’ll distinguish between sheer dishonesty which bedevils all organisations and is I believe wholly different from poor governance and mismanagement by boards/committees and the full application of Co-operative Values and Principles. I fear I may fall into the “delusion” opinion that good co-operators are good and do good. Where I take responsibility and would ask others to do too, is that I did not actively question and monitor, and did not encourage others sufficiently to also question and monitor.
    I will particularly be interested in knowing how you would have dealt with the fallout when a member of staff in the 1830’s who on working for a recently established co-operative society, say in Rochdale, Tamworth or Birmingham who on seeing more money than he could ever imagine in the till of the store absconded with that money (probably to the USA) leaving the Society bankrupt. Or would you have done different to the tactic of Stafford Co-operative in 1865 who on fearing members where losing faith in the Society, as money was going missing due to a bad book keeper, buying a gun to stop members demanding their £1.00 ( although to be precise many had less than a pound in). It seemed to work as by the 1870’s they were able to proclaim a successful Society and minute that they have sold the gun and had a party in a local pub.
    More recently a co-operative society transferred their engagements to a larger neighbouring society, where it was promptly found that an individual member of staff had stolen from the transport department a not inconsiderable sum. None of the Board of the “former” society transferred over to the new society, none of the board of the existing takeover society had any pecuniary interest in the former society. Who was to blame and what would your solution have been.
    Mine would be to employ staff on the basis of them being trained in co-operative management and V&P’s. then regular monitoring that their knowledge and adherence to V&P’s was being met. On paper that looks quite draconian and rigid, but I would expect co-operative learning to be used and co-op V&P’s to be wholly integrated into management of and by staff. This would not stop some individuals stealing, although good working conditions do greatly reduce dishonesty. However the ability of staff to freely question management, and even refuse to do something like selling PPI for instance, would I argue make co-ops less likely to be corrupt. Add that to a similar condition of service for board and committee members, with a rigid monitoring of their co-op education and continuous development. Plus an open and known regular checking of executive accounts and decision making again within Co-op V&P’s.
    anyway now I’m waffling

  2. I agree on education for staff about V&Ps – one of the things Graham Melmoth introduced (but seemingly didn’t survive his departure).


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