A couple of comments have come in to my posting this morning, which mention among other things the interesting work taking place in the US between Mondragon and the steelworkers. Comments don’t show up very prominently on this blog, but these are worth a look.
I was talking earlier this week with the leader of a large local authority who, like his colleagues in some other Labour-controlled cities, has declared his council to be a ‘cooperative’ one.
He shared with me a number of recent things his administration has been doing to try to live up to its pledge to be genuinely cooperative (or, as the slogan puts it, a ‘Brilliant Co-operative Council’). We talked of his desire to encourage what he called “active citizenry”, whether in the field of education (one community college is a cooperative trust, for example), through the city’s three community-led development trusts, or through the proposal to pass council-run open spaces into a new trust, an idea currently under consideration.
This is such a difficult time to be a local authority councillor, let alone the leader of a major city trying against all the odds to maintain services whilst having to make swingeing cuts, that I can only admire his tenacity. I last wrote about ‘Co-operative Councils’ in March in The Guardian (you’ll find a link on my website), since when the twenty or so councils involved have formed themselves into the Co-operative Councils Innovation Network. The Network offers the following informal manifesto for its work: “We believe that the unprecedented challenges facing the public sector and local communities mean that traditional models of top down governance and service delivery are no longer fit for purpose. We agree that we urgently need to create a new approach, and that the founding traditions of the co-operative movement – collective action and co-operation, empowerment and enterprise – offer a foundation for fresh and innovative solutions to help tackle the challenges of today in genuine collaboration with communities.”
It’s difficult to disagree with that, and I’m all for an end to top-downism and for genuine partnership between councils and their citizens. Admittedly there can be problems in the implementation: there have already been probing questions asked of the original ‘cooperative council’, Lambeth, in the way it has recently evicted members of short-life housing coops in the borough, an issue reported widely and covered again in The Guardian earlier this week.
More substantively, I do have a worry over the idea that local authorities can genuinely claim the term ‘cooperative’. The core principle of cooperation is that people voluntarily choose to come together as members of a cooperative – membership is not something which can be imposed on them from on high. Local authorities can be (and should be) lots of things: democratic, accountable, responsive, accessible, good at cooperating. I’m just not convinced they can be Cooperatives.
I’ve been working in recent months with the Overseas Cooperative Development Council in the US, and in particular with their CLARITY project. CLARITY is an acronym for The Cooperative Law and Regulation Initiative and is a partnership of nine US-based international coop development organizations. It’s based on the shared conviction that in many parts of the world (in developing economies and indeed in the West too) outmoded cooperative legal systems are proving to be barriers to the development of real, effective democratic coop enterprises.
I’ve been working with the CLARITY team on the text for their new handbook Cooperative Advocacy, designed to be a practical tool to help coop bodies wanting to persuade their governments and policy-setters that legal and regulatory reform is needed. I’m pleased to say the handbook was launched last week at the International Co-operative Alliance’s conference in Cape Town. You’ll find the report on CLARITY’s website, or echoed on my own website (or click the link above).
The sign of a healthy cooperative organisation is perhaps one where elections for places on the Board are hard-fought. So the International Co-operative Alliance should probably take heart from the fact that over thirty people stood today for the fifteen places available on the ICA’s World Board. Countries represented by the successful fifteen candidates range from Argentina to Korea, Australia to Russia.
The UK, incidentally, was successful in seeing its nominee elected. He is Len Wardle, the current Chair of the Co-operative Group. Pauline Green, previously head of Co-ops UK, stays on as ICA’s inspirational President as well. And those who participated at the big Quebec summit last year may be interested to know that Monique Leroux, President of Canadian financial cooperative Desjardins and architect of the summit, will also be joining the ICA Board.
I have been watching television this morning. More precisely, I have been watching the video feed from the Treasury select committee where former Co-op Group and Co-op Bank senior managers are one by one being hauled up to explain to the MPs what they think went wrong at the bank. Today it was the turn of former Bank CEO Barry Tootell to face the questions. Tomorrow the Bank’s former Chair Paul Flowers has his turn. It cannot be something he is looking forward to.
The videos of past sessions remain available at the www.parliamentlive.tv website and provide the best evidence yet available of exactly what was happening at the Co-op Bank in recent years. It is definitely worth looking at last week’s encounter with Peter Marks, the Co-op Group’s recently retired CEO, for example, characterised by some acerbic interventions from committee chairman Andrew Tyrie.
One of the lines of questioning pursued today by the select committee was whether the Group’s and the Bank’s corporate governance was up to the job. There was more than a hint (particularly from the Conservative members) that the Co-op’s democratic structures and the role these structures give to elected lay Directors must have contributed to the Co-op Bank’s problems. To his credit, Barry Tootell today robustly defended the Board composition at the Bank, defending the role of the non-executive directors whom, he said, had both helped and challenged him when he was CEO. Peter Marks by contrast took a very different position last week, implicitly criticising the Co-op Group’s elected Board and arguing for corporate governance reform (one of the few times he and the select committee seemed in agreement).
It strikes me that it would be compounding a tragedy if, as well as effectively losing the Co-operative Bank, the present crisis was to lead the cooperative movement to weaken its democratic corporate governance structures. The City and its friends have in the past sneered at the role of lay directors (“a plasterer”, “a Methodist preacher”) at the Co-op Bank. There is, however, no evidence that more ‘traditional’ boards at, say, RBS or HBOS managed their jobs any better.
How to get the balance right in cooperatives between elected non-executive directors and those non-executive directors brought in because of their professional expertise is an important question which I think urgently needs more discussion. Without this, there will be a risk of a gradual slide towards cooperative boards increasingly made up of the usual type of professional non-exec. It happened in the building society world many decades ago, and I don’t think it helped building societies remember their responsibilities to their members.