Oh, a new report on capital and cooperatives… yawnorama.
But no, get those yawns under control. Capitalism seems somehow to have persuaded us that an understanding of finance is something that only well-rewarded bankers and their kin can have, but that’s not true at all. What we do with money (and particularly what we can do differently with money to remake our world) is really rather interesting and important, I’d suggest, and surely no more difficult as a subject than, say, learning to drive a car or to produce an unlumpy cheese sauce.
The International Cooperative Alliance has said that capital is one of the key issues which the cooperative movement has to tackle. (Personally I think it’s the probably the most important of the five themes in the ICA’s current strategic document.) The ICA has quite rightly stressed that the challenge is to develop forms of cooperative capital which enable the maintenance of cooperative principles and member control, rather than which undermine them. Too often in the past the introduction of external capital, particularly equity capital, marked the start of a slippery slope away from cooperation and towards demutualisation.
The ICA has established a high-level panel to work on capital and one of its first steps has been to commission this excellent new report from a Canadian financial writer Mike Andrews. The report may be prosaically called Survey of Cooperative Capital but it is the best analysis of the various forms of capital available to coops, and the ways that different coops worldwide are using these vehicles, that I have read for a long time. The report looks both at the issues facing start-ups and larger enterprises, with a particular focus on the regulatory requirements for banks and financial cooperatives. There’s also a table showing (and I think this is the first time this has been produced) the percentage of external capital held by the top 200 cooperative and mutual businesses worldwide.
The lesson I draw from this study is perhaps paradoxically that our focus needs to be not on the technical features of the various capital instruments which can be employed but rather on the ways these are to be implemented within the cooperative framework. Or in other words, how in practice can you successfully link access to new capital with cooperative governance and member democracy?
The report is here.