As the global business elite gather at the World Economic Forum in Davos, a new report is published on how the world’s largest co-ops share ownership, control and profits with tens of millions of people.
In stark contrast to the conventional shareholder-led approach to business and wealth creation that are the focus in Davos, the new report, written by Professor Johnston Birchall of Stirling University and published by Co-operatives UK, examines how the world’s largest co-ops ensure that their customers, employees and suppliers have meaningful influence over what the businesses do.
With inequality and economic exclusion high on the agenda, and calls in the UK for the government to make good on its aspirations for corporate governance reforms, Professor Birchall’s analysis is timely.
The world’s biggest 300 co-ops have a combined turnover of $2.16 trillion, while co-ops worldwide are owned by 1.2 billion members and sustain 280 million livelihoods, equivalent to 10% of the world’s employed population.
Professor Birchall’s report analyses the mechanisms used by large co-operatively run businesses as diverse as insurance firms, retailers and manufacturers to ensure that the decisions they make are driven by their members.
Through a mix of member engagement strategies, elections to the board of directors and powerful representative bodies that oversee management, these large co-operative businesses balance the expertise needed to run a global a business with inclusive stakeholder participation.
“While the business elite meets in Davos, they would do well to look around at the co-operative alternative that is already making a difference to people’s lives around the world. As my analysis shows, co-ops are able combine the expertise needed to run a multi-billion pound business with mechanisms for their members - employees, customers and suppliers – control over strategic decisions and a share of the profits.” Professor Johnston Birchall
Alongside organisations like Credit Agricole in France, the world’s biggest co-op, the analysis includes a number of UK co-ops:
- The Co-op, which has arrangements in place to ensure that its four million customer members have a voice in the business through a member council and online participation
- Arla Foods UK, part of a Europe-wide co-op, which ensures it’s farmer owners have influence through representative bodies at varied levels
- John Lewis, the employee owned retailer, which ensures there are checks and balances for its employees – or ‘partners’ – through different levels of democracy