Speech on Member-Based Enterprises at TIAS
February 13, 2015 | 1 min read
On February 13, Hans Groeneveld, TIAS Professor of Cooperative Financial Services, will give his speech. In his speech he explains that the cooperative organizational form was virtually ignored for many years due to the dominance of enterprises based on shareholder value.
Image: © Nationale Beeldbank
These days the cooperative business model - created a long time ago by members in order to combat market failure, exploitation, hunger and poverty - is back in the spotlight. Co-operatives must make a profit for the sake of continuity and further growth, but profit is not the goal. This doesn't mean that they are charitable institutions, however. They must be able to compete with companies that are based on different organizational forms.
Global resurgence of cooperations
Cooperations are experiencing a global resurgence. Their combined membership is about 1 billion; this is 16 percent of the world population. In the Netherlands, recent years have seen the creation of energy and healthcare co-operatives, but self-employed workers are joining forces in co-operatives as well. They play a distinctive role in the financial world. European cooperative banks were, and still are, distinguished players on the European banking market. With their cooperative governance they visibly contribute to the diversity of national banking systems and therefore to the stability of financial systems. For example, they show anti-cyclical behavior: in economically good times they issue fewer loans, while in times of recession they issue considerably more loans than all other banks. Their "bottom-up" process for decision making and determining strategy takes place via member representation. This is very different from public or closed corporations that are governed top-down. "You might even say that co-operatives are economic democracies in action", says Hans Groeneveld.
Prof. Dr. Hans Groeneveld holds the Rabobank Chair for Cooperative Financial Services at the TIAS School for Business and Society. In addition, he is the Vice President of Cooperative Banking, Cooperation & Sustainability Directorate at Rabobank.
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Click here for a summary of the speech.
For an interview with Hans Groeneveld, please contact TIAS.
Member-based enterprises: The spotlight on financial services co-operatives, Hans Groeneveld (2015)