Robb on Cooperation
The global financial crisis – and education
In a previous column I wrote: “The global financial crisis provides an opportunity for all co-ops and mutuals to promote the benefits of transacting locally with people you know and can trust.”
Those thoughts have become even more relevant as the global financial crisis deepens.
Governments around the world have been called on to provide financial assistance to banks whose problems have arisen directly from their blindness and greed for profits.
It is notable is that cooperatives and mutuals have not been the cause of the present troubles.
Very few, if any, have shown the irresponsibility in their operations and financing that has been apparent in the so-called “financial engineering” and “creative accounting” of the last 15 years in other sectors of the economy.
This is not to say that co-ops and mutuals are immune from the flow on effects of the present crisis; the contraction in business will impact on all types of businesses and on all members of society.
The successful co-ops will be those which know that there are advantages in their mutual structure and in cooperative principles and values.
The very successful co-ops will be those which have this knowledge and know how to put it into operation.
The proposed course at Massey University on cooperative and mutual business thus becomes even more important for New Zealand cooperatives and mutuals.
It is relevant for directors, executives and transacting members of every local co-op.
Directors’ discussions around strategy will be weak if the options they consider are drawn from investor-owned company (IOC) scenarios.
They need to know the strategies of successful cooperatives.
Executives, whose experience was gained in managing IOCs, and who may know little about the differences inherent in co-ops and mutuals, will make the same mistakes that have spawned the global financial crisis.
They need to know how performance is motivated in and it can be assessed in organisations where the return on financial capital is not the be-all and end-all.
Transacting members need to know how cooperatives are different from ordinary companies and challenge boards and executives who claim falsely that “the only difference is who owns the shares” or that “there is no alternative to demutualisation” or that by “unlocking the value of the shares” members will benefit.
Every cooperative in New Zealand should have at least one person enrolled in the Massey course when it starts.
If you have not already completed their questionnaire on the proposed course content, I’d urge you to email the Cooperatives Association today for a copy, complete it and send it to Massey.●
– from the February/March 2009 Cooperatives News
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