ICA2020: one way we could record the cooperative difference

I’ve been reading today a thought-provoking report, still in draft form, which the International Co-operative Alliance (ICA) will be bringing out shortly: The Capital Conundrum for Co-operatives. And it has done its job: it’s provoked me to think.

Curiously, though, it hasn’t just got me thinking about cooperative-friendly capital instruments (always a favourite topic of mine). Instead, it’s made me think more broadly. And it’s made me wonder if the time is right to encourage the ICA to pioneer a ‘Global Cooperative Index’, one which measures just how well (or how badly) an individual cooperative enterprise is doing in meeting agreed international cooperative principles.

What defines a cooperative?  Not the legal structure: in Britain (and elsewhere in the world too) coop businesses nestle under all sorts of legislative frameworks. Not the capital structure, either: businesses which most people would accept as being within the cooperative family have developed all sorts of equity and quasi-equity financial instruments to meet their capitalization (or regulatory) requirements.

So it has to come down to something else: what Singapore’s Tan Suee Chieh and his colleague Chuin Ting Weber call in the ICA report ‘the cooperative spirit’. Or in other words how well these businesses really meet the essence of cooperation.  How well their business practice tallies with cooperative values and principles.

Recent years have seen businesses signing up for a whole range of Corporate Social Responsibility measures (I thinking of such things as Social Accountability International’s SA8000 standard, as well as the UN’s overarching Global Compact initiative). So what about a Global Cooperative Index, which I feel the urge to name ICA2020?

ICA2020, which would score cooperatives’ practice in a range of areas, would of course be a voluntary undertaking by cooperatives – although it would be good to think that there’d be some peer pressure to participate (and benchmarking is all the rage in business these days). So what would sort of things would ICA2020 monitor? Oh, you know: member engagement, the percentage of members voting in elections and attending meetings, employee satisfaction, employee understanding of cooperative principles, customer satisfaction, internal pay differentials (the lesser the better), the CEO’s ego quotient (the lesser the better, although I accept this is hard to measure), gender and diversity indices, socially responsible investment practice, the percentage of profits used for charitable or community purposes, average time taken in paying suppliers, all kinds of environmental indicators…

I think you get the idea.  And, you know what, it might just take off.

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Bibby says: read this!

I want to blog today about what I consider the most important publication to have come from within the cooperative movement so far this century. I think every coop in the country should have a copy, readily available to be consulted (and debated). However, unless you were at the International Co-operative Alliance’s recent conference in Turkey, my strong suspicion is that you may not yet have seen it or read it.

The publication comes from the ICA and is entitled Guidance Notes to the Co-operative Principles. In other words, its starting point are the seven agreed core international principles behind the cooperative concept. These principles help to bind together what (let’s be honest) can be a very heterogeneous movement. Encouragingly I have noted a trend in recent years for British coops (particularly workers’ coops) increasingly to make reference to them.

The principles were last agreed in 1995, at what was the centenary conference of the ICA held in Manchester. The 1995 iteration followed two earlier versions, agreed by the ICA in 1937 and 1966.  But all three statements of cooperative principle were heavily influenced by early debates among cooperative pioneers, particularly the ‘Rochdale Principles’ developed in the British cooperative movement in the mid nineteenth century.

So what does the new publication offer us?  It offers us for the first time a comprehensive set of proposals for how the principles can and perhaps should be put into practice by cooperatives, in real life. As Pauline Green puts it in her foreword, the Guidance Notes “allow cooperatives themselves to fully grasp just what it means to be a cooperative in the world in which they are now working”.  It’s a tool.

Almost all the key ethical, managerial and governance issues facing cooperatives are covered here somewhere. Look carefully and you’ll find, for example, guidance on the importance of indivisibility of coop reserves (avast, you would-be demutualisers and carpet-baggers!), on member democracy and executive power, on executive pay (this last section should perhaps be stronger), on issues associated with equity capital, on enlightened treatment of employees and the importance of ILO core labour standards, on coop responsibilities in relation to environmental sustainability, and so much more.

What’s here is, of course, guidance not dictat – some coops will cheerfully disregard the lot, just as they disregard the seven principles at the moment. But it’s a collective expression from across the global coop movement of what is considered appropriate and best practice. That’s why I think it is important.

One irritation: the PDF on the ICA website is hard to cope with. Hard copy versions need to be acquired, and distributed widely.  As soon as possible, please.

Monique Leroux is new ICA President

Monique Leroux, the CEO of the Québec-based financial cooperative Desjardins, has just been announced as the new President of the International Co-operative Alliance. Leroux was the inspiration between the two successful Cooperative Summits held in Québec in 2012 and 2014 (another is to be held next year), initiatives which have meant that she already has a high profile in the global cooperative movement. So the result (there were three other candidates, all men) wasn’t entirely unexpected.  (I’m pleased to say this outcome was predicted on this blog some time back!)

Monique Leroux takes over from Pauline Green, who deserves considerable credit for the way she has transformed the role of ICA President. What was once a position which meant little more than chairing ICA board meetings has been converted into an active leadership role.  Pauline Green has been tireless in criss-crossing the world to promote the cooperative business model, knitting together a sometimes disparate movement and giving the ICA a much more strategic sense of purpose. Pauline will be missed internationally, although British cooperators will welcome the chance to see her once more giving her energies to the national coop movement.

Monique, a francophone Québécoise who is also fluent in English, will be a different kind of President from Pauline but will I think continue to see the role as one of giving political leadership to the movement. She has valuable experience too in leading a powerful banking and insurance business.

The ICA conference in Turkey which is now just drawing to a close has also seen the publication of a number of valuable new documents, most notably the new Guidance Notes to the Co-operative Principles, which for the first time set out in detail what the seven international coop principles should mean in practice. I’ll try to return to this document in a future blog.