Humanism, participation and co-operative governance
This lecture promotes a discussion about governance in co-operatives from a humanistic economics perspective. How is human dignity, democratic decision-making, and engagement of members and stakeholders safeguarded in co-operatives as people-centred organisations? What structures are deployed to ensure such engagement? What are the processes co-operatives use to avoid the pitfalls attributed to them in the corporate governance literature (property rights problems; slow decision-making processes; conflicts and heterogeneity, among others)?
A co-operative is a people-centred, jointly owned and democratically controlled enterprise. Owners of a co-operative are also users and stakeholders in that they transact with the organisation as suppliers, workers or consumers. However, co-operative governance structures are often guided by the ‘state-of-the-art’ practices in their respective industries, and do not question underlying assumptions and ideologies. This exposes them to isomorphic pressures which demand conformance to capitalist norms.
The root of most governance structures, particularly in large organisations, is an assumed separation of ownership and control and subsequent agency problems (Jensen & Meckling, 1976). Academic literature on property rights and transaction costs in economics and management deploy an investor logic to property rights (Cook, 1995; Williamson, 1985). These are contrary to co‑operative business models where the user relationship is the basis of membership and control rights (Borgen, 2004).
These distinctions ought to have governance implications, with member participation at the core. Whereas governance theory is dominated by the idea that inherent self-interest and extrinsic motivation cause opportunistic behaviour amongst managers (Ghoshal & Moran, 1996), humanistic economics and management theories challenge these assumptions (Lux and Lutz 1999; Pirson and Turnbull 2011), positioning intrinsically motivated human beings at the centre of organisations. The lecture promotes a conversation about these competing understandings and their implications for co‑operative governance.
Sonja Novkovic is one of the world’s leading researchers in the field of co-operatives. She is Professor of Economics and Academic director of the International Centre for Co‑operative Management at Saint Mary’s University in Halifax, Canada. Well-known internationally in her role as Chair of the International Co‑operative Alliance Research Committee, she is also a member of the Council of Economists at the USA’s National Cooperative Business Association (NCBA). Her research interests are in the field of economic democracy, including labour‑managed and co‑operative firms, the social economy and comparative economic systems. The annual lecture is based on her work as a collaborator on a four‑year research project on co‑operative governance funded by FWO (a public research foundation in Belgium). She has also co-edited volumes on Co-operatives and the World of Work (Routledge, 2019); Cooperativism and Local Development in Cuba: An agenda for Democratic Transformation (Brill, 2018); and Co-operative Governance Fit to Build Resilience in the Face of Complexity (ICA, Brussels 2015).
Technology Support By: FairShares Institute for Co-operative Social Entrepreneurship (Sheffield Business School, Sheffield Hallam University)