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Mutuo and funding the future

Wed, 06 Jan 2010 03:28:00 +0000

Mutuo is a British not-for-profit society. Its website at www.mutuo.co.uk provides an interesting introduction to its origin and activities:

● Mutuo brings together the different wings of the mutual sector to promote a better understanding of mutuals and to encourage mutual approaches to business and public policy.

● Through Mutuo, consumer cooperatives, building societies, mutual insurers and friendly societies and other mutuals work together to promote their shared interests to the government, media and other decision makers.

● Since 2001, Mutuo has worked to promote new mutuals. This has led to renewed growth in the mutual sector, with public sector mutuals established in health, housing and education and new community based businesses ranging from football to childcare.

● In all, more than a million citizens have become members of new mutuals.

That’s quite an achievement, setting up new mutuals which have attracted over a million members in eight years.

PUBLICATIONS
Mutuo has also produced a range of publications of interest to those in cooperatives and mutuals which can be downloaded from the web site.

The most recent, Funding the Future: an alternative to capitalism, is well worth reading. It was released in November 2009 and provides an insightful analysis of the underlying causes of the global financial crisis.

The author, Cliff Mills, acknowledges that profit-maximizing investor-owned companies have been very successful at maximizing the return on financial capital. But it is not a system designed to deliver fairness and equity. Private gain is achieved at the cost of other “potentially legitimate – maybe even more important goals.”

“The negative externalities, the costs of exploiting natural and environmental resources, might be a price worth paying if those who bore their cost also shared their rewards; but they don’t”, he says.

Mills provides a succinct analysis of how this situation came about historically.

He shows how mutual societies arose which sought to establish sustainable businesses that were socially responsible. Their funding was markedly different from investor-owned companies.

Members did not think of themselves as owning a share in the underlying value of the business. “The society did not exist in order to create capital value: it existed to provide goods and services, for today and for future generations” he says.

“In truth, this was not just a different way of trading or doing business; it was a different basis for society. It operated on the basis of people behaving as citizens with a collective sense of responsibility for themselves and others, rather than as selﬁsh consumers” he says.

Mills shows how this attitude, and business model, changed in response to changes in the role of the state. He also reminds us that recent events have changed the old certainties on which the postwar market economy was built.

He says, “There is now a more sober and reflective mood.” There is a resurgence of interest in mutual and member-based models of ownership (witness the one million members of new co-ops created by Mutuo). This suggests that the self-help business model may have a contemporary relevance which is “more than just marginal.”

SUGGESTIONS
Mill makes a number of suggestions how community-owned projects such as energy co-ops might be structured. They include redeemable shares with a ten or fifteen year term together with “a modest level of interest payable on the shares providing that the necessary surplus was achieved.”

The concluding paragraphs of his paper are:

“There is an alternative to capitalism: where the reason for trading is not the (selfish) desire to make a profit, but the (self-interested) need for the sustainable provision of goods and services; and where the proactive driver is not the maximization of private gain, but the pursuit of better results for all of us – for the common good.

“This alternative is available if, and only if we – as customers, workers and savers – choose to have it. It requires no act of government, no decision by big business.

“It involves reclaiming the power of democracy. It requires ordinary people to resolve to use their economic powers of everyday decision making to create and support a different economic system, a different way of living, and a different society.”

I believe those words, indeed the whole paper, are very relevant to New Zealanders, whether they are members of a cooperative or not. They are especially important to those working to formulate policy for new laws – a copy should be given to each of our legislators, regardless of party.●

– from the December 2009 Cooperatives News

Discretionary mutuals

Wed, 14 Oct 2009 04:08:00 +0000

Earlier this month I was a keynote speaker in Canberra at the Unimutual 20th anniversary conference. Unimutual is a not-for-profit discretionary mutual that was formed to offer higher education and research institutions a commercially feasible alternative to insurance.

Its membership comprises 18 universities and 15 other education and research institutions, all Australian.

It is, however, open to applications for membership from New Zealand and elsewhere.

As a “discretionary” mutual the board has the absolute discretion to decide:

● whether or not to accept applications for membership;

● the level of protection it will grant – each member is individually rated according to its risk profile, individual claims history and pays contributions accordingly for the protection provided;

● the payment it will make on receipt of a claim.

Its publicity states that in exercising its discretion, “the Board is guided by principles of fairness and natural justice, governed by its constitution, rules and protection wordings, and the balance between individual members’ interests and those of the group as a whole.”

This means that Unimutual has the ability to consider claims in circumstances where they would be declined in the commercial market.

At first sight a discretionary mutual seems different from a cooperative where open membership has been the norm.

But open membership can allow for discretion to decline to admit new members where there is a capacity constraint.

The discretion to treat members differently also exists in cooperatives.

Co-ops have always recognised the need to guard against subsidizing some members by others.

Thus a supply co-op will normally give a greater rebate for large purchases than for single purchases of the same item.

What is common to discretionary mutuals and co-ops is the belief that the board should be guided by principles of fairness and natural justice to balance the interests of individuals and those of the group as a whole.

Unimutual has an excellent website and their members’ area contains a number of informative case studies which show members how their organisation benefits them in ways that an investor-owned insurance company could not.

It was very clear from the discussions at the conference that Unimutual is walking the talk about being guided by principles of fairness and natural justice.

On my way home from Canberra, I purchased a copy of Other People’s Money by Andrew Main.

The story of HIH, an Australian insurance company which collapsed in 2001, the blurb describes it as “a chronicle of arrogance, ignorance and self-delusion.”

I am sure the policy holders of HIH now wish they had been dealing with a mutual and that their protection was in the hands of people guided by principles of fairness and natural justice.●

– from the October/November 2009 Cooperatives News

Commitment, or involvement?

Tue, 29 Sep 2009 09:50:00 +0000

Silver Fern Farms reported over 75% support for its plan which involves opening the cooperative to outside capital. It has been hailed by the chief executive as “a clear signal for change”.

With all due respect to Silver Fern Farms, I cannot agree that the members of the cooperative have shown great support for the plan or for their cooperative.

The National Business Review reported that only 42.24% of eligible shareholders voted. The majority of eligible voters, it appears, couldn’t be bothered.

Further, not all 20,000 shareholding members were entitled to vote.

Only current suppliers, numbering about 4,500, were eligible with those who had not supplied livestock to SFF since 1 October 2007 disqualified.

Not all North Island suppliers were represented directly in the shareholder base, a legacy of the Richmond takeover.

That raises questions in my mind about the commitment of the board to cooperative principles.

The 2004 takeover of Richmond should have been followed immediately by the integration of those suppliers into the cooperative on the same basis as existing members.

Democracy is a fundamental cooperative principle, and there is no justification for disenfranchising eligible “citizens”.

It’s clear to me that there’s been “involvement” rather than “commitment” at both membership level and board level: if members are free to sell livestock to the cooperative or elsewhere; if members can play off one buyer against another; then their interest is really in short term gain.

If members cannot be bothered to vote in an election affecting the capital structure of their cooperative; if they do not see that investor returns will inevitably be maximized at their expense; then they do not really appreciate the protection that is currently offered by the cooperative they own.

And if a board fails to enfranchise all potential members, and fails to pay out inactive members, it is opening the door to demutualisation.

I suspect that the cooperative will be starved for capital because the members and board are involved in, and not fully committed to, benefitting from the cooperative advantage.●

– from the August/September 2009 Cooperatives News

Budget day thoughts

Tue, 29 Sep 2009 09:43:00 +0000

I am writing this prior to the presentation in parliament of the 2009 budget.

I am not expecting to hear the word “cooperatives” mentioned, but I am hoping that one day New Zealand politicians will support cooperatives in the way in which they are supported in Canada.

Just this month the Canadian Minister of National Revenue and Minister of State (Agriculture), the Hon Jean-Pierre Blackburn, announced that his government will:

“invest C$19.1 million over the next four years to support the establishment of new cooperatives and test innovative methods of using the cooperative model.”

That’s about $27.8m in our currency!

Canada’s population is about 33.2 million compared with our 4.17 million.

So, if our politicians were willing to commit support on a pro rata basis that would mean investing about $3.5 million to support the establishment of new cooperatives and test innovative methods of using the cooperative model.

This is not a new step for Canada. Since 2003 they have had a national Cooperative Development Initiative.

In the past six years the CDI has helped create some 200 new cooperatives and has supported more than 1,500 cooperatives through advisory services.

Clearly Canadian politicians have been satisﬁed that they have received value for money and that cooperatives have an important role to play in today’s economy.

Taking action

So what must we do to make things happen? Three things:

● Tell your MP that co-ops deserve parliamentary support, as in Canada.

Already our association lobbies MPs about the role co-ops play in our economy; this needs to continue.

It would undoubtedly become more eﬀective if every cooperative lobbied their local MP as well.

This could be by personal visit, phone call or mail.

I recall one senior MP telling me that when he received several letters on a particular issue he knew that each letter probably represented the view of about 3,000 people because so few individuals bothered to make their views known.

Don’t dismiss the signiﬁcance that your letter to your MP might have.

● Promote the cooperative advantage in every way you can.

Too many co-ops seem afraid to tell the world that they are based on mutuality and cooperation.

I admire the way PSIS has crafted its new slogan – “a cooperative way of banking”, and in case you miss that they also describe themselves as “a very cooperative cooperative”.

● Support cooperatives in all your dealings.

Cooperation amongst cooperatives is a powerful way of growing your own business. You are dealing with others who share your principles and values.

Let’s hope that next year our politicians will be following their Canadian cousins, showing their support for the establishment of new cooperatives and the testing of innovative methods of using the cooperative model.●

– from the June/July 2009 Cooperatives News

Towards relevant financial reporting

Tue, 29 Sep 2009 09:37:00 +0000

I was greatly heartened by the 17 March 2009 email from the International Cooperative Alliance’s international accounting standards working group secretariat, which our Executive Director circulated.

It advised of the outcome of a discussion at the 16 March 2009 U.S. Financial Accounting Standards Board (FASB) meeting: at last it appears that the accounting standard setters have recognised that cooperative member shares are equity and not liabilities.

True, the approach has yet to be conﬁrmed and adopted by the International Accounting Standards Board (IASB) and FASB, but a paper from the IASB staff also adopts a similar position, so there is every indication that the views of the standard setters on both sides of the Atlantic are converging.

The standard setters’ claim of ‘sector neutral standards’ has been dealt a major blow – although they will be reluctant to admit it.

The cooperative sector around the world has made it plain that accounting standards prepared for investor-owned companies are not automatically applicable to other entities.

There are differences between investor-owned companies and cooperatives just as there are differences between investor-owned companies and public sector entities such as councils, universities, churches, public libraries and art galleries.

Equally, there are differences between assets which are traded and assets which are held in collections as taonga, or treasures.

The idea of a market value for the latter is inappropriate and irrelevant.

The accounting profession has done little to enhance the role of financial reports by its insistence that standards designed for the very small number of companies listed on the stock exchanges of the world should be equally applicable to other entities.

The cooperative and mutual sector around the world has persisted in its opposition to these illogical and inappropriate moves.

Full marks locally to Alliance Group, Ballance Agri-Nutrients, Fonterra and Foodstuffs whose staff were involved in lobbying the local standard setters and the IASB in London.

Lessons

There are two lessons to be learned from this:

● The most obvious is that by working together cooperatives have demonstrated that opposition and inertia can be overcome.

● The second lesson is that there is a real need for an accounting standard or statement on recommended practice which recognises the cooperative difference.

It is not just the difference between equity and liabilities which is important in cooperatives.

Performance measures and distributions to members are equally important and signiﬁcantly different from investor-owned companies.

The Centre of Excellence in Accounting and Reporting for Cooperatives at Saint Mary’s University, Canada, is engaged in developing a statement of recommended practice for cooperatives.

Further information about this project is found in the current issue of Cooperatives News.

I encourage all members of the Association to support this project; the IASB and the FASB are slowly becoming aware of the cooperative difference but more progress needs to be made.●

– from the April/May 2009 Cooperatives News

The global financial crisis – and education

Tue, 29 Sep 2009 09:32:00 +0000

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

Benchmarking your performance

Tue, 29 Sep 2009 09:27:00 +0000

Showing the world how well cooperatives are doing is one of the most important things that can be done.

To do this, the cooperative movement needs data.

The website of the International Cooperative Alliance (ICA) contains some significant data.

For example, in 1994 the United Nations estimated that the livelihood of nearly half the world’s population was made secure by cooperative enterprise.

Benchmarking performance against similar businesses is equally important. Only then can you know how well you are doing in the market place. Again, the cooperative movement needs data.

Some data is available internationally on cooperative performance: the ICA recently produced an updated version of its Global 300 listing of co-ops, and six of the larger New Zealand co-ops feature on that list.

But what about the smaller co-ops, and those which want more relevant data?

That data is just not available. And how valid is it to benchmark financial performance against co-ops in other countries?

They may use quite different accounting practices and the data may be several years old by the time it is published internationally.

What is needed is timely local information.

Better communicators

I am delighted that the Association has agreed to the suggestion from the ICA that we, like other cooperative apex bodies, should gather information on the country’s co-ops.

It can only benefit the Association. It will give factual information that can be used to enlighten members of our parliament on the size and signiﬁcance of cooperative business in our economy.

It will benefit individual co-ops by providing a source of information not available from official sources, such as Statistics NZ.

Based on annual reports currently prepared for members, this will not involve additional cost for co-ops. Similarly, it will not involve the disclosure of conﬁdential information.

Cooperatives have a long history of being better communicators than investor-owned companies. The Rochdale pioneers issued audited quarterly reports to their members at a time when investor-owned companies refused to supply their owners with even an annual report!

I hope that we will extend the range of information to more than just turnover and assets so that managers and directors can benchmark their co-ops for efficiency.

For example, turnover per dollar of assets is a useful measure of the efficiency with which assets generate sales.

What is it for your co-op? For your type of co-op? For co-ops as a whole in New Zealand?

Ask the right questions

What’s the ratio of debt to equity for your co-op? For your type of co-op? For co-ops as a whole in New Zealand?

Is your membership growing as fast as the population? Is the membership of your type of co-op growing? Is the overall membership of New Zealand co-ops growing?

Is there a satisfactory operating cash ﬂow in your co-op? In your type of co-op?

In co-ops as a whole in New Zealand?

It would be good to see the Association help you answer questions like these. It would also be good to hear what information you would like to access from such a source.

We look forward to working with you to develop this information.●

– from the December 2008/January 2009 Cooperatives News

The global financial crisis and mutuality

Tue, 29 Sep 2009 09:18:00 +0000

The rapidly escalating crisis in world financial markets comes as no surprise, but that is because Economic History was a compulsory part of my commerce studies, and for the last five years I’ve been teaching a course on understanding financial statements and seeing through creative accounting.

In the words of JK Galbraith, a celebrated economist and financial commentator, how is it that people can be so willing to get caught up in the mania of speculation when history tells us that a collapse is almost sure to follow?

Two aphorisms provide an answer. The only lesson we learn from history is that we don’t learn from history. And those who do not know their history are doomed to repeat the lessons of the past.

In A Short History of Financial Euphoria (Penguin, 1990) Galbraith reviews the major speculative episodes of the past three centuries.

He notes that there is a reluctance to accept controls over markets because of a dogmatic belief that markets are neutral and perfect when “free”.

He makes the point that all financial innovation involves in one form or another the creation of debt secured in greater or lesser adequacy by real assets.

He concludes that only in the financial world are there so many opportunities for concealing (through “creative accounting”) what in time will be revealed as self- and general delusion.

All that Galbraith writes is relevant to the present scene.

What underlies Galbraith’s excellent analysis is the implicit acceptance that the main driver of financial speculation leading to collapse is total self interest, or an absence of interest in others.

This absence of concern for others was most clearly enunciated by George Soros, the billionaire currency speculator.

When asked about the havoc his currency speculation caused to far eastern economies in the crash of 1997, Soros replied “As a market participant, I don’t need to be concerned with the consequences of my actions.”

What has this to do with cooperatives?

Cooperatives arose in the laissez faire (free market) economy of the nineteenth century when the interests of capital predominated over all else.

Labour was a cost to be minimised.

Employers opposed employees combining to negotiate for fair wages.

Regulation of health and safety in employment was opposed because it would increase costs and make the country uncompetitive.

Food was diluted or adulterated with additives to increase proﬁtability.

Only by recognising strength through mutual action were employees, consumers and trades people able to secure fair wages, safe and affordable goods, and viable work.

Accountability was practised by cooperatives publishing audited quarterly reports to members at a time when investors in companies were denied even annual ﬁnancial data.

A concern for others was arguably no less important than a concern for self from the earliest days of cooperatives.

Mutuality made possible what was absent when ﬁnancial capital was more important than human capital.

Back to the future

I believe that we are seeing a return to similar thinking today.

The uncertainty in the global economy is causing many to question the stability and fairness of investor-oriented structures which ignore the interests of local employees and consumers.

Financiers who have structured international deals through tax havens so that their tax bill is minimised or eliminated now call for bailouts from taxpayers.

What double standards they employ! How can they hope to attract support from ordinary citizens?

I recently spoke at a Probus Club meeting. In the business section which preceded my talk it was reported that the Club had changed its bank from one of the (overseas owned) big banks to SBS (which is mutually owned) because “members wanted to support a New Zealand organisation rather than contribute to the dividends of overseas shareholders”.

Mutuality clearly paid a big part in their decision.

Incidentally, the President of the club reported that it had taken only 10 minutes for the SBS to attend to all the paperwork involved in opening the new account but it had taken over 45 minutes for the Australian-owned bank to close the account!

During the tea break I heard a number of members say that they would be following suit and changing their accounts too.

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.

It also makes good sense for all co-ops and mutuals to look at their own activities to see whether they too are transacting with other co-ops and mutuals at every opportunity.●

– from the October/November 2008 Cooperatives News

Fair value shares

Tue, 29 Sep 2009 09:10:00 +0000

Traditionally it has been the practice for cooperative capital to be contributed and redeemed on the basis of ‘a dollar in – a dollar out.’

Increasingly though, New Zealand cooperators are considering membership in terms of fair value shares.

This concept deserves discussion as, wrongly calculated, it can enhance or endanger the ﬁnancial stability of cooperatives.

Firstly, some comments on the principle of ‘a dollar in – a dollar out’.

This does not mean that all members should necessarily contribute the same amount, whether $1 or $100 or $100,000, although in some small cooperatives the same small amount could be appropriate.

In other situations, where members might make widely differing demands on the services of the cooperative, capital should be contributed in proportion to expected level of usage for there to be fairness between members.

The principle of ‘a dollar in – a dollar out’ implicitly recognises that membership of a cooperative is not an investment activity where a member’s contribution is capital invested and which could be expected to grow over time.

Is there anything wrong with ‘a dollar in – a dollar out’? Yes, there is one problem. Because of inﬂation, a dollar today is worth considerably less than what it was worth in the past.

This means that the capital contributions may need to be reviewed regularly so that new members contribute equitably to the asset base required.

Conversely, members leaving the cooperative will be treated equitably only if the dollar they withdraw has something like the purchasing power of the dollar they contributed.

A possible solution is to recognise the effect of inﬂation annually on the contributed capital so that admissions are made at the new rate – the fair value – and redemptions are paid out at the same rate.

The inflation adjustment would reduce the distributable rebate for the year; this would mean a more realistic operating result, and would also ensure that members’ equity would be stated more realistically.

Two possible further refinements could be considered, although these do conflict with traditional cooperative values.

They relate to retained profits or surpluses and asset revaluations.

To the extent that trading surpluses are not distributed but are ploughed back they can be looked on as distributions forgone by members.

To some, this is one of the natural responsibilities of good stewardship – to enhance the assets one is entrusted with so that they are left in a better condition for coming generations of members.

To others, amounts ploughed back are value they are morally entitled to when they leave.

Some observers of the cooperative movement would criticise this view as being selfish and contrary to cooperative values: members are getting out more than the dollar they put in.

If a board did consider that retiring members should be paid out for their proportionate share of retained surpluses, the fair value at balance date would be based on the initial capital contribution plus the inﬂation adjustments plus the retained surpluses.

Revaluing assets
The matter of asset revaluations is a little more complex. Revaluing ﬁxed assets regularly is a good practice.

Some years ago the New Zealand Institute of Chartered Accountants said “assets should be revalued regularly, preferably annually, to net realisable value.”

I agree. Only then will the true ﬁnancial position of the entity be shown. Only then will a board know if it meets the solvency test, when the value of assets is greater than the value of its liabilities.

But should the asset revaluation be considered something which rightfully “belongs” to members leaving the cooperative? I think not.

Cooperatives are not formed to capture windfall gains. I would therefore recognise the revaluation as a non-distributable reserve and exclude it from any measure of the fair value of the shares at balance date.

This would be consistent with the ICA statement that “some part of the reserves at least should be indivisible”, that is, kept permanently in the cooperative.

Some fair value calculations are based on estimates of future surpluses discounted back to a present value.

Such numbers are very subjective and incapable of being verified. They can generate values far in excess of the net assets per share.

Consequently members surrendering their shares are paid out more per share than remains in the cooperative for transacting members.

That is inequitable and must inevitably weaken the cooperative ﬁnancially.

The fair value computation I have suggested above uses objective data readily discoverable by the board of a cooperative.

It involves no inequalities as between members.

Neither does it have an adverse effect on the cooperative’s financial position.

It would be, I believe, an improvement on ‘a dollar in – a dollar out’.

– from the August/September 2008 Cooperatives News

Could cooperatives do better in New Zealand?

Tue, 29 Sep 2009 09:02:00 +0000

As I reflect on cooperative activities around the world I get an uneasy feeling that New Zealand cooperatives and their members could really be more committed to cooperative principles and values.

There’s no doubt that kiwi co-ops can be proud of the way they have cooperated in the past. An example that springs to mind was the combined effort and financial support – through the NZ Cooperatives Association – for the drafting of the Cooperative Companies Act.

Without the unstinting efforts of cooperators working together we would not have had an act designed by cooperators for cooperatives which has proven to be very workable.

A second example was the way in which cooperators here made strong submissions to the accounting standard setters on the unrealistic nature of the international accounting standard affecting debt and equity instruments.

The standard setters were left in no doubt that standards designed for investor-owned companies can be quite inappropriate for cooperatives (and other types of entities).

But both those examples were responses to crises or unusual events.

What do cooperatives do on a regular basis to advance the case for cooperatives? Let me tell you two of the things that cooperatives do elsewhere.

Cooperatives provide funding to help communities form new cooperatives. In the UK recently, over £1 million was raised by Cooperative & Community Finance to fund the growth of new cooperatives.

The share issue was supported by the Cooperative Group and other retail cooperative societies as well as investors. Take a look at www.icof.co.uk for more details.

The USA has a number of foundations or funds which exist to develop new cooperatives. Two are the Cooperative Development Foundation (www.cdf.coop) and the upper Midwest’s Northcountry Cooperative Development Fund (www.ncdf.coop).

This could be something that the Association could champion – all it needs is for one or two co-op boards to say “We’ll support that because we are committed to growing new co-ops.”

Cooperatives support each other by using their services wherever possible. As Edgar Parnell puts it in Reinventing Cooperation – the challenge of the 21st century:

“It was not very long after the first primary level cooperatives were successfully established that those involved hit upon the idea that if individuals beneﬁted from cooperation, then cooperatives working together could see those benefits multiply.”

In Spain, through Mondragon, cooperatives can access cooperative insurance services, cooperative banking and ﬁnancial services, cooperative education and training etc.. The evidence shows clearly that when cooperatives support other cooperatives all beneﬁt.

● How many New Zealand cooperatives have a policy of treating other cooperatives and mutuals as a preferred supplier?

● Are directors and staff encouraged to use a taxi co-op for travel to and from an airport?

● Does your co-op place its insurance with a mutual insurance company?

● Do you use the services of mutual ﬁnancial organisations?

We all should, if we are truly committed to cooperative principles and values.

– from the June/July 2008 Cooperatives News

Corporate governance

Tue, 29 Sep 2009 08:55:00 +0000

A well functioning board can contribute greatly to the success of a cooperative in many ways.

● It can set the strategic direction for development so that members’ needs are always uppermost. To do this it must be in close contact with members.

● It can set standards and monitor progress on the part of management, challenging and testing proposals which management produces.

● It can bring a breadth of experience to issues so that decisions are better informed than those of any one individual member.

A board, however, is unlikely to serve its members well if:

● it loses touch with members and proposes changes, as Fonterra has recently done, which are likely to be rejected by members;

● it lacks a balance of skills and starts making bad decisions;

● it fails to reject proposals designed to beneﬁt corporate raiders and managers, rather than members;

● its members are not wholly committed to cooperative principles and values. It will inevitably start functioning like the board of an investor-owned company.

Non-member directors
Conventional wisdom suggests that corporate governance can be aided by the presence of one or more independent, or non-member directors.

If independent directors are to benefit a cooperative then it is essential that the they are drawn from other successful cooperatives or that they are professionals with a sound knowledge of cooperative principles and values.

Independent directors are not some kind of super human. They are fallible, they are subject to the same pressures as other directors. They should therefore be subject to the same limitations on tenure of ofﬁce as any member directors.

Equally important, they should be accountable to members in exactly the same way as any member director. If appointed to fill a casual vacancy, they should stand for election at the next annual meeting. They should be part of the normal rotation of directors.

All directors are responsible to the members of a cooperative. All must be accountable to members.

In the February/March 2008 Cooperatives News the suggestion was made that cooperatives should amend their constitutions to prevent members voting some directors, such as the chairman, off the board.

This is a wholly repugnant suggestion. It strikes at the principle of democratic member control and is contrary to good governance in cooperatives.

– from the April/May 2008 Cooperatives News

Tower Colliery – the cooperative advantage demonstrated

Tue, 29 Sep 2009 08:48:00 +0000

On 25 January 2008 the Tower Colliery, Hirwaun, South Wales closed. It had ﬁnally run out of workable coal.

Cooperators around the world should take note of this co-op and the people who created and ran it for the past 13 years.

In the 1990s, British Coal designated Tower as a mine with no future. It was the last deep mine in South Wales.

British Coal were adamant that it should be closed down. The result would have been devastation in the local community.

The 238 miners, led by the union branch secretary, Tyrone O’Sullivan, refused to lie down. They mounted an employees’ buyout. Each put in £8,000 which was their redundancy money.

This provided about £2,000,000. They borrowed a further £2,000,000, part of which came from cooperative sources.

The miners believed that cooperation could succeed where the dog-eat-dog capitalism of Britain under Thatcherism saw no alternative.

The Tower Employees Buyout (TEBO) did not have a smooth run, but O’Sullivan and the members of the cooperative believed that there is a real cooperative advantage.

As a cooperative, Tower succeeded magnificently. Wages and conditions were improved, the mine operated proﬁtably, and community activities were supported widely.

When I heard O’Sullivan speak to a cooperatives conference in Cardiff in September 2006 he acknowledged that one day “in the near future” the workable coal would be exhausted. The cooperative was therefore investigating alternative uses for the land so that continued employment could be ensured for the community. The reinvention of co-ops to meet changing circumstances is well known to those who have studied cooperative history.

The story of the formation of the Tower cooperative is told in Tower of Strength by Tyrone O’Sullivan (with John Eve and Ann Edworthy), Mainstream Publishing, 2001 (ISBN 1 84018 500 7) and on DVD in Charbons Ardents. Made by French ﬁlmmaker Jean-Michel Carré, it won an award at the 1999 Florence Film Festival and comes with an English soundtrack.

What lessons there are from Tower Colliery for cooperators everywhere?

● Believe in the cooperative advantage and you can overcome the negatives of capitalism.

● Treat employees as the only real resource and the business can face almost any difﬁculty with strength.

● Adapt to changing circumstances so that members’ needs are met, and the future of the cooperative and its members will be enhanced.

– from the February/March 2008 Cooperatives News

Why does Fonterra view the cooperative model as ‘less than ideal’?

Tue, 29 Sep 2009 08:41:00 +0000

In February 2007 I was invited to address the Dairy Farmers of New Zealand Council on the topic of Fonterra’s then forthcoming capital changes.

I warned them that a major weakness in Fonterra was that its managers and directors were not clearly committed to cooperative principles and values. I said:

“Although the chairman [Henry van der Heyden] and CEO [Andrew Ferrier] have commented on the importance of being a cooperative there are other signs that raise doubts about the total commitment to cooperative principles and values.

“For example, I see no evidence of recruitment of outside directors from other successful cooperatives.

“Can directors who have been involved in successful investor-owned companies understand what is ‘the cooperative difference’ or what is meant by ‘cooperative principles and values’?

“I suspect that the tension which has existed between the board and the [shareholders’] council, and is evident in the narrative each has presented, is greatly inﬂuenced by differing perceptions of ‘shareholders as investors’ and ‘shareholders as members’.”

I also gave as an example comments made by Fonterra’s General Manager Economics and Strategy.

He said: “A variety of institutional forms co-exist in competitive markets. There is no reason to believe one form is inherently superior to another.” (emphasis added)

The Strategy Manager made the comment that the views expressed were given in a personal capacity and were not necessarily those of Fonterra, “despite the corporate logos”.

I found it disturbing that a senior executive responsible for strategy in an organisation which claims that cooperatives are “the best vehicle for dairy farmers” should hold this contrary view.

Now, in the last few weeks we have heard an even more disturbing view from Henry van der Heyden. In presenting the capital restructuring proposal he said:

“It’s time to choose whether we want to stay in a bubble with a less-than-ideal business model with our profits intact, but with nothing to hand on to our grandchildren or whether we continue on the path to become a multinational in control of our destiny, growing earnings, growing wealth and sharing proﬁts…” (emphasis added)

The lack of commitment to cooperative principles and values has apparently now become a rejection of them.

I cannot seriously view Fonterra, or any other cooperative, as operating “in a bubble”.

History shows that cooperatives were created in the competitive market place without protection.
Cooperatives operate successfully when they are committed to putting the interests of transacting members ahead of the interest of investors.

Far from operating in a bubble, successful cooperatives control their own destiny, grow earnings and wealth and share profits by being committed to a business model that is better than the alternatives.

Former Fonterra director, Harry Baylis, and Taranaki farm consultant Michael Joyce have issued a damning critique of the Fonterra plan.

They say that the board’s preferred option fails to address the claimed weaknesses. I agree with their analysis and conclusions.

Fonterra’s members should heed the comments from Bayliss and Joyce.

This restructuring plan is the child of people who lack commitment to cooperative principles and values.

– from the December 2007/January 2008 Cooperatives News

Cooperation or coop-etition?

Tue, 29 Sep 2009 08:27:00 +0000

I’ve just been reading of a most disturbing development between credit unions in Denver, Colorado. It is called “Bellco has balls! Forget the cooperative spirit, the gloves are off.”

The New Horizons Community Credit Union has recently been acquired by a Texas-based credit union. Nothing wrong with that, you might say. And I would agree.

Mergers and acquisitions can be a part of business evolution. But they should always lead to more viable combinations.

When mutual organisations combine they should strengthen mutuality.

Mergers inevitably provoke some reaction from the remaining organisations who may fear for their future when faced with a stronger competitor.

And that is what has happened in Denver. One mutual competitor has reacted aggressively.

The Bellco Credit Union has mounted an aggressive new promotion to steal New Horizon’s members. This includes offering cash incentives of US$100 to those members of New Horizons who open a cheque account or $US25 if they open a savings account with Bellco.

A commentator who reported this development says: “Sounds pretty good to me. In the past, there was an unwritten understanding that credit unions were all in this together and the banks were the enemy.

“The new reality, especially in multiple credit union markets, is a full-on, no-holds-barred ﬁghting to the death (or merger).”

That concerns me greatly because it strikes at the fundamental values of cooperation and mutuality.

It emphasises short term beneﬁts over longer term considerations. This is financial folly.

Those who are lured in by the cash incentive are unlikely to show loyalty to the organisation.

It beneﬁts some members at the expense of others.

This is inequitable. It implicitly rejects the advantages of mutuality by focussing only on short-term financial considerations.

Traditional cooperative values are multidimensional.

The commentator also said: “This campaign begs the question: Is it a good thing for the credit union movement?

“Or does the ethos of the cooperative spirit and collective credit movement really matter any more with everyone on a quest for more members and billions in assets?”

I believe the ethos of the cooperative spirit does matter.

I also believe it is false to say that everyone is on a quest for more members and billions of dollars in assets.

More members and a growth in assets are the likely outcome of successful business operations. They are the result, not the objective.

History, both recent and ancient, shows very clearly that businesses who have focussed on growth of customers, assets or investors have a greater risk of failure than businesses which focus on providing quality products or services.

Think of Enron, or WorldCom.

History also shows that businesses focussing only on ﬁnancial returns have a greater risk of failure than those who also recognise their social responsibilities.

Cooperatives and credit unions must be run in a business-like manner if they are to survive. That does not involve a rejection of cooperative values.

In my view the board at Bellco has done just that.

The ethos of the cooperative spirit does matter in today’s world. The real battle should be with the investor-owned firms, not with other cooperatives.

– from the October/November 2007 Cooperatives News

Three secrets of success in New Zealand co-ops

Tue, 29 Sep 2009 08:09:00 +0000

Recently I was asked “What makes New Zealand co-ops successful?”

In my experience there are three main secrets which apply not only to New Zealand cooperatives but around the world: successful co-ops are:
● responsive;
● responsible; and
● innovative and proactive.

Let me explain these in turn.

Firstly, responsive co-ops respond to members’ needs. Co-ops exist to serve members, not vice versa.

Historically, cooperatives were founded because investor-owned companies failed to provide good quality products or services at affordable prices.

Ravensdown was founded because of dissatisfaction with the poor quality fertiliser being sold to farmers. Read The Gumboot Takeover by Bryan James and you will quickly see how widespread the need was for quality, affordable superphosphate.

Ashburton Trading Society was founded because farmers needed better value for money in farm supplies.

The success of both Ravensdown and ATS is because both have kept close to their members and have responded to their changing needs. The same is true of other successful NZ co-ops.

Responsive cooperatives also respond to the market place. Successful co-ops must be business-like, and the essence of successful business is adaptation to changing circumstances.

The three Foodstuffs cooperatives operate in one of the most demanding sectors of the economy – the grocery sector. The reason that Foodstuffs is a successful cooperative, in contrast to many grocery co-ops overseas, is that it has responded promptly and effectively to changes in the market place.

New Zealand co-ops, like most other NZ businesses, enjoy virtually no protection and no subsidies. This is not so in some overseas countries.

It is small wonder that overall their co-ops are less successful than ours.

Secondly, successful NZ co-ops are characterised by a sense of responsibility.

They are responsible to local interests. There is a closeness between members and managers, between members and the board. The latter is of course closely linked to the fact that most directors are members – but as co-ops grow they face a real risk that the board will lose touch with members.

The successful New Zealand co-ops work to increase contact with members. This can be by having regular functions for members, by conducting focus groups to ensure that members’ needs and concerns are being attended to, and by staff training which encourages employees to address members by name and recognise that they are the owners of the cooperative.

All successful NZ cooperatives practice a policy of supporting the local community – it’s sound common sense and good business sense too. It demonstrates that in a global economy a local co-op can serve the community better than a business that is answerable to unknown overseas investors. It provides the personal touch which enhances the quality of community.

Thirdly, successful NZ co-ops typically are innovative and pro-active.

PSIS was the ﬁrst ﬁnancial institution in NZ to provide telephone banking and cellphone text banking.

Tatua Cooperative Dairy Co developed the concept of ‘whipped cream in a can’.

There are other examples which could be quoted.

This is not to suggest that all co-ops in New Zealand are shining lights, or that nothing can be learnt from overseas. There are many lessons that co-ops here can learn from those overseas.

For example, the British Cooperative Bank introduced an ethical policy in 1992 which has been a world leader in demonstrating that business does not operate in a vacuum.

The bank’s policy has been inﬂuential in helping other businesses consider how to act ethically. They have turned down several hundred million pounds worth of business because it would have provided ﬁnancial support for such activities as the arms trade or the extraction or production of fossil fuels.

These were all areas of concern to members and society.

Looking at what the Cooperative Bank did, they were truly responsive, responsible, innovative and proactive – and successful.

– from the August/September 2007 Cooperatives News

Taxi cooperatives abroad

Tue, 29 Sep 2009 08:02:00 +0000

With rising fuel costs, diminishing oil supplies and a growth of inner city living, it is becoming increasingly likely that public transport in general, and taxis in particular, will play a more important role in our lives.

There are some clear signs that taxi cooperatives are providing the lead overseas. Conventional petrol or diesel vehicles are being replaced with hybrid-electric vehicles (HEVs).

In San Francisco in 2005, the Yellow Cab Cooperative was the ﬁrst to get a ﬂeet of fuel-efﬁcient Ford Escape hybrid sport utility vehicles.

Who says cooperatives are less enterprising than investor owned businesses?

Other taxi companies are now following suit. It has been estimated that within ﬁve to ten years all New York cabs will be HEVs or some other type of alternative vehicle.

In Madison, Wisconsin, Union Cab is a worker owned taxi company. It began in 1979 after a failed labour action left workers idle when the employer closed the business rather than honour a labour contract.

Who says the founders of a cooperative are rooted in the past and unwilling to seek a better deal in a competitive environment?

Today, Union Cab has over 200 worker-owners and is a ﬁnancially strong cooperative. It operates quite differently from investor-owned US cab companies which earn their income by daily leasing their vehicles to independent operator drivers.

The lease generally includes one tank of fuel, a set number of miles and despatch services. Drivers then have to pay for all other services such as credit card service, account charges, additional fuel etc). This pressures the drivers to cut costs, work long hours and may result in less than a fair hourly income.

As a worker cooperative, Union Cab has a commitment “to create jobs at a living wage or better in a safe, humane and democratic environment by providing quality transportation services in the greater Madison area.”

Notice that it is not about being the most efﬁcient or most proﬁtable company. Nor does it use the meaningless marketing jargon of “striving for excellence” or “empowering stakeholders”.

This commitment results in higher than industry-average costs for wages, safety costs and democratic governance costs.

Despite this, Union Cab generates a higher proﬁt margin than the industry average. Revenue per mile is very close to the national average (as would be expected in a competitive industry) but expense per mile is below average.

Who says cooperatives can’t be run in a business-like way?

The co-op’s policy of maximizing savings and lowering its reliance on outside ﬁnancing minimizes its interest costs.

Members’ equity is built up for asset renewal by retaining proﬁts, even after paying above average wages.

It would seem that Union Cab has not fallen for the ﬁnancial world’s mantra that wages should be minimized and debt ﬁnance should be maximized.

Union Cab also reports at least three times a year to the members – an extra cost no doubt, but an essential part of the process of communication with members.

Members are also welcome to attend and participate at any board or committee meetings.

I hope that we will see the growth of similar cooperatives in New Zealand as public transport grows in the twenty-ﬁrst century.

– from the June/July 2007 Cooperatives News

Continuing professional development

Tue, 29 Sep 2009 07:54:00 +0000

As professionals, cooperative managers and directors have a responsibility to keep themselves up to date with developments in the sector.

This has never been easier than today. The internet allows easy and quick access to cooperative publications around the world.

If you are not a regular reader of any of the following publications which are freely available I would urge you to take the time to see if they help you keep your professional skills up to date.

ICA Publications
The International Cooperative Alliance (ICA) – to which our Association belongs – is an independent, non-governmental organisation which unites, represents and serves cooperatives worldwide.

It is the largest non-governmental organisation in the world. Currently, the ICA has 220 member organisations from 85 countries, representing more than 800 million individuals worldwide.

Two of the regular publications of the ICA are very informative. They are the ICA Digest and the Review of International Co-operation.

The Digest is issued each month and reports on the activities that ICA undertakes on behalf of its members, highlights important events taking place in cooperative movements around the world, and facilitates contacts between cooperatives for the sharing of knowledge and information.

The Review is the ofﬁcial journal of the ICA. Published one or twice a year, it presents in-depth discussion of issues that affect cooperatives around the world.

Both the Digest and the Review can be accessed on the ICA web page http://www.ica.coop under the publications tab.

You can also have the Digest emailed to you automatically.

The ICA offers a very comprehensive service which will alert you to information about your particular sector.

Canadian Cooperative Publications
The Canadian Cooperative Association issue a fortnightly newsletter Newsbriefs which is available electronically. For more details visit their web page http://www.coopscanada.coop/ and look under the publications tab.

Both the Canadian and ICA publications provide material that is relevant for NZ cooperatives on matters of management, governance and benchmarking performance.

International Journal of Cooperative Management
This journal, edited by Dr Peter Davis of the University of Leicester, is now published by New Harmony Press, a worker-cooperative publisher.

It contains three types of material: academic papers, executive reports and reports on research in progress, and book reviews and dissertation extracts.

As from February 2007 current issues and back issues are now available at:
http://www.newharmonypress.com/.

– from the April/May 2007 Cooperatives News

‘Sector neutral’ standards? Phooey!

Tue, 29 Sep 2009 07:46:00 +0000

Financial reporting in New Zealand is currently being hampered by the belief of the Accounting Standards Review Board that accounting standards can and should be ‘sector-neutral’.

That view is rejected by many other accounting bodies and for good reason.

Accounting standards are largely developed for and in the interests of investor-owned companies.

The process of harmonization or convergence of accounting standards is explicitly in support of the globalisation of ﬁnancial markets.

As such, the present process of standard setting is fundamentally irrelevant for those entities such as cooperatives and mutuals, charities, educational organisation and governments.

Their objectives and performance measures are quite different from companies whose objective is to maximize the return on ﬁnancial capital. Their concepts of basic elements such as assets, liabilities and equity are also different.

By attempting for force investor-focussed accounting on other sectors the standard setters are creating nonsensical numbers in annual reports and are failing to allow the reporting of what may be more truly relevant.

Two examples will illustrate this.

To a publisher or bookseller an inventory of books is a trading asset. Efﬁcient operations involve turning over the stock of books as rapidly as possible and at more than cost. Both cost and selling price are clearly relevant in determining proﬁt and ﬁnancial position.

However, in a research library the stock of books is held for use by readers and researchers. Some of the books will have been purchased, others may have been donated.

Cost and selling price are irrelevant. Indeed, so far as rare books are concerned a primary concern of the library will be the protection and preservation of the collection for future generations.

The ﬁnancial reporting that is relevant for the book trader is quite different from that needed for the library.

To investor-owned companies, labour is an input cost which is to be minimised if the return on ﬁnancial capital is to be maximised. Often this is achieved by reducing the terms of employment or outsourcing work. By contrast, a workers’ cooperative may be formed to provide jobs (including apprenticeships) and strengthen a local community.

Reducing labour costs would certainly not be an indication of improved performance and return on capital will have little relevance in this sector as a measure of success.

The nonsensical effect of applying business accounting to government reports was given by Professor Allan Barton, in Australia. The Department of Defence reported a substantial proﬁt in 2000/2001.

This arose because the department was required to account for all tax funding as revenue (in accordance with accounting deﬁnitions) while excluding capital expenditure from the proﬁt calculation (in accordance with business accounting).

A similar effect will be seen soon when the University of Canterbury reports its 2006 ﬁgures. The merger with the Christchurch College of Education will have to be accounted for as a purchase because investor-based standards do not allow the recognition of mergers.

The net assets of the College will be reported as revenue as if they had been purchased at zero cost. The University will report a corresponding ‘profit’ of several millions of dollars even though they will be at pains to point out that it is not a proﬁt at all!

This nonsense is directly attributable to the ASRB’s ﬁxation with sector-neutral standards.

There are increasing signs of opposition to sector-neutral standards across the Tasman. The Australian accounting profession has conducted a series of roundtable meetings with members in the not-for-proﬁt sector.

One report on the web page of CPA Australia makes it clear that members present, who were all involved in producing and using ﬁnancial reports, are convinced that the sector-neutral or ‘one size ﬁts all’ approach is fundamentally ﬂawed:

● All participants agreed that the conceptual framework was a major bugbear, with some suggesting that it was time to return to ‘ground zero’ and redevelop the framework.

● … users of reports have little need for like-for-like comparisons in the current one-size-ﬁts-all framework. … it would be more useful if the standards enabled comparison between like-minded NFPs than to compare ‘BHP with the Uniting Church’.

● FRC chair Charles Macek agreed that there must be change. ‘Unless the reporting system is relevant to users we are failing them.’

The Institute of Chartered Accountants in Australia (ICAA) has taken the unusual step of formally opposing the conceptual framework proposed by the International Accounting Standards Board and the Financial Accounting Standards Board.

The announcement on the ICAA web page said:
“Whilst the Institute is supportive of the need for an updated Conceptual Framework, the Institute believes that unless some fundamental amendments are made to the current Draft, there will be a need for the Australian Accounting Standards setter (AASB) to incorporate a number of signiﬁcant changes to ensure that the Conceptual Framework caters not just for the Listed Private-for-Proﬁt Sector, but also the Non-Listed Private-for-Profit, Not-for-Profit and Public Sectors. As the Draft Conceptual Framework is currently structured, the Institute is unable to support that Draft for Australian use, without significant amendments.”

This enlightened approach by the Australian profession is, I regret to say, in marked contrast to that found in New Zealand.

I hope, for the sake of cooperatives here, that the Australians can persuade their New Zealand counterparts to recognise that sector-neutrality is a fatally ﬂawed concept.

– from the February/March 2007 Cooperatives News

St Mary’s 1, Canterbury 0

Tue, 22 Sep 2009 16:59:00 +0000

This will be my last report from the University of Canterbury. It is very disappointing to have to announce that the postgraduate paper on cooperatives will not be offered in 2007, despite it having been popular with students since it began six years ago.

The reason is simply stafﬁng. Neil Crombie, who ably ran the course when I was on leave and was my co-supervisor, is in the process of completing his doctorate and priority is, understandably, being given that worthy objective.

It is hoped that students will again be able to include cooperative studies in 2008, but the format will be different. A decision has been made to replace the full year (26 week) paper with two one semester (13 week) papers. This will mean that students no longer do a research project in the second half of the year. That, in my view is a retrograde step.

The decision to semesterize both undergraduate and graduate papers is also something that concerns me greatly. When I attended a cooperatives conference in Wales last September, I learned that a number of UK universities which semesterized 12 years ago are now moving back to full year papers. They have found that the short duration of semesters does not allow students’ understanding of a topic to mature. Consequently there has been a dumbing down of material in order to keep pass rates up. I foresee that the same situation is likely to occur here.

Now to look on the brighter side. It is pleasing to be able to report that my involvement with Saint Mary’s University in Halifax, Nova Scotia is progressing well. I am supervising a research project which Tom Webb inaugurated some months ago. The project is on the theme Cooperative Accountability and Identity. The researcher employed by the programme has produced two draft reports which I have reviewed.

The report I wish to comment on here comprises an analysis of the financial statements of the 253 cooperatives registered in Nova Scotia. The majority of the cooperatives – 168 or 66% – are consumer cooperatives; 41 or 16% are producer cooperatives; and 44 or 17% are worker cooperatives. The consumer cooperative category includes 80 property owning housing cooperatives.

What surprised me on first seeing this report is how strong the cooperative movement is. The population of Nova Scotia is a little less than 1 million and they have 253 cooperatives. New Zealand now has a population of just over 4 million; but do we have four times the number of cooperatives as Nova Scotia? I think not.

About 36% of the Nova Scotia cooperatives are small, with assets of under C$100,000. On the other hand 23% are large and have assets of over C$1,000,000.

The second surprise was to learn that the Canadian Cooperatives Act (1998) and the Nova Scotia Cooperative Associations Act (1989, amended 2001) allow for the incorporation of a cooperative without member shares. This is considerably different from the New Zealand scene, and others with which I am familiar. I am seeking more information on this and will share it with you in future columns.

– from the December 2006/January 2007 Cooperatives News