Plan de la pr
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1. Issue of gouvernance of cooperatives
Présenté par Oumou Sidibé VANHOOREBEKE
Expert en microfinance, chef de projet CCOM
2. Plan de la présentation Part I : Cooperatives
Nature of cooperatives
Assumptions Part II : Governance
Characteristics of the cooperatives
Combination of governance strategies
Roles of the stakeholders
3. Cooperatives general characteristics Types of cooperatives
Two groups of cooperatives
Financial cooperatives (savings and credit cooperatives, Sacco, housing cooperatives)
Producers’ (coffe, cocoa, cotton…)
4. Nature of cooperatives
A cooperative could be defined as a corporate body bringing together individuals who have shared economic and social concerns and whom, in order to address them, join forces to run an organisation in accordance with standards, norms, principles and values proper to co-operative actions.
5. Cooperatives (cont.) A company controlled by an association constituted of persons (members)
This association groups one or many types of user of the company - suppliers and/or clients, and/or employees
6. Cooperatives (cont.)
3. The first objective of a cooperative is not to maximise profit, or to effect social change? but to maximise the benefits or profits that its members can earn from their transactions with the cooperative.
4. This form of company is regulated (governed) by particular rules of equity and values.
7. Financial cooperatives
A group of people constituting a legal entity, which is non-profit and with variable equity, based on the principles of union, solidarity, mutual help, with the aim of collecting the savings of its members and offering them credit.
8. Consensus General consensus about:
the role and impact of cooperatives in economies
a large number of members are involved
Possible contribution to achieving the millenium goals,
Cover an increasing number of people
widespread: Europe, North America, Africa, Asia, Latin America
They are neglected by policies makers because of their structure,
The view of cooperatives is changing
Good governance is fundamental to the viability of cooperatives and influences their rate of growth
9. Part II : Governance of cooperatives
Concept: All institutional and behavioural assets governing the life of an institution are implemented to achieve its goal
« L’ensemble du dispositif institutionnel et comportemental régissant la vie d’une institution et mis en œuvre pour réaliser sa mission»
11. Particular structure (all types) Association
Board of managers
Ethical or deontology Committee
General Assembly Company
12. Special Characteristics ….. Rules of associations
Members are influenced by their living conditions
Influenced by politics
Rules of the corporation Management demands,
13. A democratic structure
14. Financial cooperative Because of a cooperative’s nature, it has both an economic and a social goal; that is to offer advantageous financial services (or other types of service) to its members whilst also providing training to its members.
So, if the members constitute a homogenous group with similar concerns, their financial service requirements will be the same (segmentation) and decisions about the direction that the cooperative should take and the products that it should offer will be easier to negotiate.
Therefore when the target group is heterogeneous, and individuals approach a cooperative with a range of ambitions and expectations (this is usually the case), the management and the elected postholders’ tasks become very complex.
Members (owners, representatives, clients)
Employees ( salaried ),
Officials, or board members (administration, supervisory or control committee, deontology committee)
16. Dual structure…. Association
Board or managers
Ethical or deontology Committee
17. Double structure
The board of directors is the link between the association and the company. He is responsible for general management, the establishing of performance targets, the employment or dismissal a general manager, the definition and validation of the pay and staff management policies.
Its role, its cohesion, solidarity and its integrity are essential for the survival of the cooperative and the Union.
18. Management requirements
If cooperative values and principles have not changed much, a range of roles and responsibilities for the elected post holders emerge as the cooperative itself develops (different phases of the institution). However, changes in the external environment in terms of behaviour and social values (on the part of the clients, staff, the competition etc) also bring new demands for the managers.
19. Management requirements
As the result of the global shift in the economic and social environment, today’s leaders must be skilful in order to anticipate future developments, solve problems, lay down strategic objectives, make choices, reduce uncertainties, evaluate performance, re-direct, and lay down objectives. These are also the challenges facing the leaders of the cooperatives. However, competence is not one of the criteria that is necessarily considered when there are elections (one member one voice) and this results in shortcomings in some places.
20. Examples of governance problems
Confusion of role and mission,
Culture of silence
Gerontocracies especially in Africa
Conflict between the principles of profitability and the social objectives,
Slowness in the decision-making
Lack of confidentiality concerning the strategies,
Lack of solidarity
Conception of volunteering (the Benevolat),
Politicisation of the system
Increase in costs
Poor motivation amongst the staff.
All these problems have a direct impact on the image of cooperatives
21. Combination of governance approaches
A combination of the elements within the organization
The structure of the process, the division of power throughout the institution should be dynamic and proactive in accordance with the internal environment but also in accordance with the external environment.
Here are some elements of this governance make-up drawn from my own experience
22. Element of governance mix To institutionalise the mechanisms and means of control and protection
Mechanisms to ensure the re-taking control of power (preventive and curative measures)
Develop a company culture based on the performance (economic, gender and social issues)
Limit the leaders’ mandates and prevent an accumulation of functions
Renew board (one third of members or partial renewal) and have a limited term
To remain faithful to its mission
If the need for a renewal of the cooperative is accepted, the question is then who is to fulfil which role and at which level? Can one have a common charter for all types of cooperative?
23. Principles Elements that are external to the institution:
National law governing cooperatives revised regularly ,
Standards of performance, institutional supervision mechanisms... etc
Elements that are internal to the institution: Statutes and internal regulations revised regularly
Manual covering policies, procedures and accounting practices
Codes of ethics applicable to the leaders and the employees,
Clear separation between the administrative and the supervisory bodies
24. Conclusion If it is clear that a cooperative needs to be renewed, we must determine: what the common principles are, what the indicators should be, what the management norms should be, and the roles of each stakeholder
Establish what is necessary to create an enabling environment.
What the internal control measures should be
What the role should be for: the government, partners, professional associations, UN organisations, international cooperative organisations and practitioners
Determine whether it is possible to have the same legislation, or standards for all types of cooperative
Of course all this should happen within the framework of the governance of cooperatives
25. Thanks , Merci, obrigada Oumou Sidibé vanhoorebeke