SEPTEMBER 2018

SEPTEMBER 2018
VALUES
Are co-op values
losing ground as
businesses grow?
Plus ... Meet Tamworth
Co-op’s Julian Coles ...
Updates from OPEN 2018
... Social Business Wales
Conference: a preview
ISSN 0009-9821
9 770009 982010
01
£4.20
www.thenews.coop

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news
Are co-op values losing ground in
large businesses?
CONNECTING, CHAMPIONING AND
CHALLENGING THE GLOBAL CO-OP
MOVEMENT SINCE 1871
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Manchester M60 0AS
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EXECUTIVE EDITOR
Rebecca Harvey
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INTERNATIONAL EDITOR
Anca Voinea | anca@thenews.coop
DIGITAL EDITOR
Miles Hadfield | miles@thenews.coop
DESIGN:
Keir Mucklestone-Barnett
DIRECTORS
Elaine Dean (chair), David Paterson
(vice-chair), Sofygil Crew, Gavin
Ewing, Tim Hartley, Beverley Perkins
and Barbara Rainford. Secretary:
Richard Bickle
Established in 1871, Co-operative
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cooperativenews
Maintaining the co-operative values and principles while operating in
competitive markets can be a challenge for large co-ops.
In this issue, we look at what co-operative values mean today,
featuring interviews with experts and academics, as well as case
studies from the UK and abroad.
We examine current research into what influences a co-op’s take on
the traditional values of self-help, self-responsibility, democracy,
equality, equity and solidarity.
Gill Gardner, secretary of the Co-op Group National Members Council,
tells how the organisation created a structure to put these values into
practice, while Ed Mayo, secretary general of Co-operatives UK, looks
at efforts made to champion co-op principles around the world.
And looking at the banking sector, Paul Gosling looks at some highprofile
examples of what can go wrong when those values are ignored.
There is a growing tendency among some of the largest co-ops
to replace traditional co-operative values with ethical ones. This
poses dilemmas. Should co-ops strive to differentiate themselves by
claiming ethical superiority over other businesses? And how can they
position themselves as leaders when investor-owned businesses are
introducing corporate social responsibility into their practice?
Mervyn Wilson warns that co-op values are not a “pick and mix list”
and that it is their unique combination which sets co-operatives apart
from standard business models.
Finding the right balance between supporting community causes,
which consumers care about, and adhering to the co-operative
mission remains a tricky issue for the movement.
ANCA VOINEA - INTERNATIONAL EDITOR
Co-operative News is printed using vegetable oil-based
inks on 80% recycled paper (with 60% from post-consumer
waste) with the remaining 20% produced from FSC or PEFC
certified sources. It is made in a totally chlorine free process.
SEPTEMBER 2018 | 3

NOW
The Fall of the Ethical Bank: how a large group
of decision makers believed their own hype
- and got it spectacularly wrong

ISSN 0009-9821
9 770009 982010
01
THIS ISSUE
CLOCKWISE FROM TOP LEFT
Bolivia’s El Ceibo cocoa co-operative
is launching chocolate in the UK soon
(p21); Julian Coles talks about his time at
Tamworth so far (p22-23); Crédit Agricole,
the world’s largest co-op, has launched an
ethics charter; Delegates at the OPEN:2018
conference (p26-28)
news Issue #7287 SEPTEMBER 2017
Connecting, championing, challenging
SEPTEMBER 2018
VALUES
Are co-op values
losing ground as
businesses grow?
Plus ... Meet Tamworth
Co-op’s Julian Coles ...
Updates from OPEN 2018
... Social Business Wales
Conference: a preview
£4.20
www.thenews.coop
COVER: Are co-op values
losing ground as businesses
grow? (Image: Pawel
Czerwinski / Unsplash)
Read more: p32-47
22-23 MEET... JULIAN COLES
Julian Coles is the eighth chief
executive officer in Tamworth
Co-operative’s 131-year history.
25-29 OPEN CO-OP
Updates from the second annual OPEN
conference, exploring the idea of Platform
Co-operatives.
30-31 SOCIAL BUSINESS WALES
CONFERENCE 2018: A PREVIEW
This year’s conference features keynotes
from Dai Powell, Ken Skates and Guy
Singh-Watson.
32-47 FEATURE: HOW CAN CO-OPS
MAINTAIN THEIR VALUES AS THEY
INCREASE IN SIZE?
32-33 INTRODUCTION
As co-ops grow, face business
competition, adapt to the wants of
society and expand abroad, they face
tensions with their traditional values.
What happens next?
34-37 Q&A: DEFINING CO-OP VALUES
We speak to Dolly Goh, from Singapore
National Federation of Co-operative
Enterprise, and co-op academics
Murray Fulton and Mervyn Wilson,
about how the movement’s values and
principles fit into a changing world.
39 ED MAYO
The secretary general of Co-operatives UK
gives a global view of co-op values.
40-41 CASE STUDY: CRÉDIT AGRICOLE
The world’s biggest co-op has just
developed an ethics charter.
42-43 CASE STUDY: MIDCOUNTIES
How is the society embedding co-op
values as it grows?
44-45 THE CO-OP COMPASS
Gill Gardner, secretary of the Co-op
Group National Members’ Council, on
holding the board to account.
46-47 FINANCIAL CO-OPS
Paul Gosling finds some salutory lessons
in what can happen when co-ops
lose touch with their values.
REGULARS
6-14 UK updates
15-21 Global updates
24 Letters
48 Reviews
SEPTEMBER 2018 | 5

NEWS
GOVERNMENT
Housing and civil society: Does policy point to a more co-operative future?
p Social Enterprise UK chief executive Peter Holbrook (left) and CCH head of policy Nic Bliss
The government’s new Civil Society
Strategy has received a mixed welcome
from co-ops and social enterprises.
The strategy, published last month
by the Department for Digital, Culture,
Media & Sport (DCMS), sets out how the
government will support civil society to
build “a country that works for everyone”.
James Wright, policy officer at
Co-operatives UK, which took part in the
consultation process for the document,
said: “There are some very positive
trajectories for grassroots community
empowerment, not least the £35m
of dormant account funds going into new
place-based investment programmes,
and what sounds like new backing for
community shares.
“But plans for communities in local
economic policy are underwhelming,
boiling down to more consultation within
existing power structures.”
He added: “Government seems to have
heeded our calls for the public service
mutuals programme to support user and
community ownership and control, which
could be a significant breakthrough,
especially ahead of the adult social care
reviews this autumn.
“It’s worth bearing in mind that most
of the policy levers needed to make a big
difference are not held by DCMS. Perhaps
this strategy will be most valuable as a
means to influence decision-making in
other parts of government.”
The strategy also includes plans to
spend another £55m from dormant assets
on a new financial inclusion organisation
to address the need for affordable credit.
Matt Bland, head of policy and
communication at the Association of
British Credit Unions (Abcul), said:
“Capitalisation of ambitious credit unions
can generate many times the investment
made in new lending.
“Credit unions’ affordable interest
rates, encouragement of saving and
support with budgeting skills provide
a much-needed boost to the financial
resilience of households, making them
less dependent on high-interest debt.
“We look forward to working with
the DCMS, Big Lottery and a range of
stakeholders to ensure that the new
organisation gets off to a flying start.”
Social value
Peter Holbrook, chief executive of Social
Enterprise UK (SEUK), said: “We are
pleased to see a new cross-governmental
social enterprise forum, but this must
have teeth. We look forward to working
with the Cabinet Office and DCMS on
how to embed social value within central
government more effectively.”
He added: “There is a risk that the
strategy may simply push the big issues
facing society and the sector back into
the long grass. We must make sure that
this doesn’t become the reality. This
strategy must not be an end point. We
hope that it will lead to a new dynamism
within government to champion social
enterprise and social value.”
In June, minister for the Cabinet Office,
David Lidington, announced that the
Social Value Act would be extended to
ensure all government departments
explicitly evaluate social value when
commissioning services.
Chris White, author of the Social
Value Act and SEUK board member,
said: “The principles behind the Act
have the potential to work at every level
of government and should cover all public
spending – big and small, grants and
contracts. I see great potential for social
value in improving the planning system
and ensuring that decisions about public
assets take into account not just financial
cost but their intrinsic social value.”
In terms of housing, the strategy
reveals that the Ministry of Housing,
Communities and Local Government is
exploring the potential of transfers of
public land to community-led housing
initiatives, such as Community Land
Trusts, by which residents become
members of a trust which holds land
and housing.
Nic Bliss, head of policy at the
Confederation of Co-operative Housing
(CCH), said: “It is welcome that the
strategy refers to community-led housing
– and we are pleased to be working with
the government.”
But he warned: “We are light years
away from its aspirations in reality. We
live in an astonishingly paternalistic
society where our aim is to do help to
people rather than help people to help
themselves – particularly as we get down
the income scale.
“My brief assessment of this strategy
is that it will struggle to challenge this
paternalism, particularly because they
are understandably wanting to take with
them organisations that might assist in
the overall strategy, who might be the
source of that paternalism.
“This is particularly noticeable in the
housing sector. There are small number
6 | SEPTEMBER 2018

of housing providers who are good at
working in partnership with their tenants
and other service users – but the majority
are sadly a long way from having any
understanding or willingness to engage
people, particularly at the local level
and many – at best – pay lip service to
exploring ways to empower their tenants
and other service users.”
Green paper
A week after the Civil Society Strategy was
announced, the government returned
to housing with a green paper offering
more control to the four million English
households in social tenancies.
The consultation document, from
the Ministry of Housing, Communities
& Local Government, includes a look
at housing associations which have
already restructured as community-based
providers, including co-ops. It asks for
ideas to boost community-led housing and
overcome barriers facing new communityowned
homes.
The paper outlines plans to build on
the £1.67bn government investment deal
announced last year. However, it does not
suggest any additional funding to meet
the increasing demand for affordable
housing. Fewer than 6,000 social homes
were completed in England in the last year,
while more than 1.8 million households are
waiting for a social home.
Proposals include changes to make it
easier for tenants to own their homes,
such as giving them the right to buy 1% of
their home each year. And the government
pledges to strengthen partnerships with
housing associations to boost the supply of
new affordable homes by providing longerterm
funding certainty.
Reforms are also being considered to help
people using affordable home ownership
schemes – such as shared ownership –
build up more equity in their homes.
The green paper asks how the current
complaints process can be reformed to
be quicker and easier; particularly when
dealing with safety concerns, and wants
feedback on whether the regulator should
produce a code of practice for landlords,
and league tables for landlords.
Tenant power
The department also plans a consultation
on how to create longer private tenancies.
Nic Bliss welcomed the recognition of
the need for a national voice for tenants,
and the references to co-operative housing
and community land trusts, but wants to
see more community-led social housing.
Last year CCH joined three other tenant-led
organisations to call on the government to
re-establish the National Tenant Voice.
He said: “The whole social housing
sector needs to be much more communityled.
These definitely are ways to tackle
social housing stigma, service quality
and many other social issues. But we are
worried that the green paper is questioning
whether tenant management is a valid form
of community-led housing. Of course it is.”
CCH will continue to work with the
government, added Mr Bliss, to ensure
the vision in the Civil Society Strategy is
replicated in the social housing sector.
Ed Mayo, secretary general
of Co-operatives UK, also backs a
national tenant voice. In 1997, he chaired
a commission for the National Housing
Federation (NHF) which produced a report,
What Tenants Want, calling for a new
relationship of mutuality between housing
associations and tenants. In response, the
NHF produced a voluntary code on service
and accountability for members.
A similar report last year from CCH
found that tenants want decision-making
in housing associations subject to checks,
balances and safeguards, with tenants
given a clear role in big decisions.
Mr Mayo said: “We need to listen to the
voice of social housing tenants and we will
all feel part of a fairer and more inclusive
country if we do.”
Around four million households live in
social housing with the figure set to rise.
u Tenants and organisations have until
6 November to respond to the green paper,
which can be found online at s.coop/2aj03.
The Civil Society Strategy is at s.coop/2aj04.
SEPTEMBER 2018 | 7

CO-OP GROUP
Co-op Group opens £6m distribution centre in Scotland
p The official opening with the Earl of Moray John Douglas Stuart, Inverness provost Helen Carmichael, Chris Whitfield, Andy Perry and David Roberts
The Co-op Group has opened a new £6m
distribution centre at Inverness Airport
Business Park to facilitate future store
expansion in Northern Scotland.
The Dalcross Distribution Centre covers
12,000 sq ft and employs 50 people.
The Group plans to open 18 new stores
in Scotland by the end of 2018, with a
further 20 to be revamped as part of a
£28m expansion and renovation plan.
This will take total store numbers to 365
and the number of Group employees to
almost 6,000.
The facility will be serviced by doubledecker
vehicles, which will result in fewer
journeys, reduce CO2 emissions and
eliminate 1,800 road miles per day.
Logistics director Andy Perry said:
“We’re thrilled to be able to launch our
new site at Dalcross – it’s a modern and
future-proofed facility, which is perfectly
placed to support the Co-op’s evergrowing
operations in Scotland.
“Our significant investment in a new
distribution centre is also a symbol of
our absolute commitment to serving
communities in the north of Scotland, as
well as a strong indicator of how well our
food business is performing in this area.
“We have ambitious plans to continue
to open new stores and Dalcross will
ensure we can continue to serve our
members and customers in the Highlands
and Islands for years to come.”
James Campbell, chair of Inverness
Airport Business Park, said: “Inverness
Airport Business Park is delighted to
welcome its first occupier to the phase one
site and it will be brilliant to see the Coop
operating from their new address at 1
Vallance Road.
“The speed at which this development
has progressed has been hugely
impressive, with the Co-op’s project
team only arriving onsite in October
2017. Plot 2/1 has gone through a major
transformation in a very short space of
time and it’s testament to the Co-op and
their contractors for the excellent job
that has been done in developing this
distribution centre.”
On the road with the Co-op message
Co-op Group members and shoppers will
have a chance to find out more about the
society at a series of ‘Join in Live’ events
this autumn.
The Group will visit 24 towns and
cities across the UK so people can learn
more about what it is doing in their local
community, meet local causes being
supported through the membership
scheme and discover how they benefit
when members shop in its stores.
In addition, attendees can put forward
ideas about what they would like to see
in their local Co-op store, learn how the
Group is performing as a business and
find out about the exciting plans it has for
the future.
The events will be attended by local
Members’ Council representatives,
Member Pioneers who work in the
community, and senior managers from the
co-op’s Food team.
Nick Crofts, president of the Members’
Council, said: “The Join in Live events
are taking our co-op message in to local
communities – my call out to co-operators
is come along if you can, but also bring
a friend and show them how great the
Co-op is at supporting the community.”
u For information on where the events
are being held between September and
November and to book your place, visit
coop.co.uk/joininlive
8 | SEPTEMBER 2018

HERITAGE
Setting sail through
the sky: Celebrating a
co-op monument to
a seafaring city
An icon of modernist architecture – and
a jewel in the crown of co-op art – is the
subject of a new documentary.
The Three Ships mural, which salutes
Hull’s maritime heritage, is a treasured
landmark in the city. Now local artist
Esther Johnson is making a film, Ships in
the Sky, to tell its story.
Designed by Alan Boyson in 1963 for a
Hull & East Riding Co-operative Society
store, the mural is a curved concrete screen
depicting three trawlers. The word ‘HULL’
is spelt in the ships’ masts, above the motto
“resper industriam prosperae” – “prosper
through industry”. The mosaic uses
1,061,775 individual cubes.
Hull Council says the mural will have
pride of place fronting the revamped King
Edward Square, but demolition work on
the rest of the building could start as early
as this month – and Ms Johnson is keen to
start filming before this happens.
Commissioned by the Co-operative
Wholesale Society (CWS) – now the Coop
Group – the mural’s connection to the
movement extends to Boyson himself,
whose father was manager of the Marple
Co-op Society.
Interviewed for the film, chief architect
Philip Andrew discusses the project and
his friendship with Boyson. “I was only
ever involved in commercial buildings,”
he said. “I’ve grown accustomed to seeing
buildings demolished, which don’t seem
to me to have been there long enough, and
if I like the building I’m very melancholic.”
The building, which was also home to
the Skyline Ballroom, a club and music
venue in the late 1960s, was vacated by
the CWS in 1984. It was converted into a
BHS store in 1985 and vacated in 2016
following the retail chain’s collapse.
Johnson’s film forms part of an oral
history supported by the Art and Design
Research Centre at Sheffield Hallam
University, and Hull Trinity Old Boys’
Association. It features interviews with
former co-op shoppers and employees, as
well as the builders and mosaicists who
worked on the building – while Cosey
Fanni Tutti, a member of experimental
art/music groups COUM Productions and
Throbbing Gristle, which were formed in
Hull, recalls watching Jimi Hendrix play
the Skyline Ballroom.
Ms Johnson is in touch with Hull Central
Library about the project and hopes that
interviews conducted for the film can be
included in the library’s ‘Untold Hull’ oral
history archive.
Growing up in Hull, she says that seeing
the mural, a piece of public art, played a
crucial role in her decision to study art.
“My dad comes from a long line of
trawler-men and seafaring folk,” she said.
“While sitting with him opposite the
mural on Saturday lunchtimes – eating
fried egg sandwiches from the local
deli Fletchers – he would tell me tales
of his first trawler trip at the age of 12 to
Murmansk and beyond the Arctic Circle.
“Aside from an avid fondness for
Boyson’s graphic modernist aesthetic,
I associate the mural with stories of
fantastical travels to far-off lands, voyages
that all began in Hull. The Three Ships has
almost become a metaphor for where life
might lead me.”
Ms Johnson studied at the Royal
College of Art in London. In 2008 she was
p Above: Alan Boyson’s mural on the former
CWS building in Hull (Photo: diamond geezer)
Below: Architect EP Andrew interviewed by
Esther Johnson
nominated for the UK Northern Art Prize
and in 2012 won the Philip Leverhulme
Research Prize in Performing and Visual
Arts for young scholars.
u Anyone who has a memory to share
about the murals, the store or nightclub
can send Esther Johnson a message on the
project website: shipsinthesky.weebly.com
or via Twitter @shipsinthesky63.
SEPTEMBER 2018 | 9

SPORT
Supporters Direct
merger leaves question
mark over mutual status
Supporters Direct, the umbrella body for
supporters’ trusts, is merging with the
Football Supporters Federation, which
represents fans in England and Wales.
Members of both bodies approved the
merger at their AGMs on 28 July.
The structure of the new organisation
is not yet clear. An amendment from FSF
chair Malcolm Clarke, calling for a full
review of the advantages of mutual status
and other legal forms of organisation, was
carried unanimously at the FSF AGM.
“At this stage there is no decision on
what form the new organisation will
take,” said Mr Clarke. “The amendment
was proposed because of the strongly held
views by some members of SD that the
new organisation should be a mutual.”
He added: “The new organisation will
represent all fans on all of the issues
which concern them, including the
club ownership and governance issues
which SD handled. This presents an
exciting opportunity to build upon the
achievements of both organisations.”
p SD secretary Richard Irving, SD chair Tom Greatrex and SD CEO Ashley Brown (Photo: SD)
SD and FSF said in a joint statement:
“The chairs, CEOs and board members
of each organisation are committed to
delivering the merger and creating a
modern, effective and powerful single
voice for football fans nationwide.”
Each organisation will nominate two
current board members to join the new
organisation. And the two CEOs will
develop an operational plan for the
merger, alongside discussions with the
Fans Fund to cover the next three-year
funding cycle.
Member network meetings will be held
during this process and a new council body
will be elected to start work in the new
year. SD chief executive, Ashley Brown,
said he was keen to explore the mutual
option but this would be determined by
the interim board in consultation with
members and financial experts.
He explained that as part of the
agreement with the FSF, SD would
continue to provide support to other sports
but that non-football supporters’ trusts
would no longer be represented as voting
members. He added that SD was “very
positive” about the new organisation and
that supporter ownership and engagement
would be a key area of focus.
A total of 70% (69 voting members)
voted at SD’s AGM, with 36 backing the
merger and 30 wishing to remain separate.
Three members abstained.
CO-OP GROUP
Co-op Group’s former HR chief claims she was
sacked over equal pay concerns
p Sam Walker
The Co-op Group has been taken to an
industrial tribunal by its former head
of HR Sam Walker, who alleges she was
sacked after raising an equal pay claim
and warning the company of a possible
gender pay gap.
Ms Walker has brought a claim of equal
pay, discrimination and unfair dismissal
against the Group, which was set to last
for two weeks.
Giving evidence at the opening of the
case, she said she was appointed chief HR
officer in February 2014. At this time, she
claimed, the Group had given pay rises to
board members to stop them from leaving
as it recovered from its financial crisis.
This included increases to the then
general counsel, Alistair Asher, and chief
external affairs officer, Nick Folland, who
were paid £550,000, while Ms Walker and
the then chief strategy planning officer,
Paula Kerrigan, were offered a salary of
around £400,000.
Ms Walker added that she raised her
equal pay concerns three times with the
Group’s then CEO Richard Pennycook,
between November 2015 and January
2016. She said: “I do not see my case
simply as being about my own position.
Equal pay for women generally is a matter
of real importance and concern to me.”
The Group denies the allegations
brought by Ms Walker, arguing that
her dismissal was related to her work
performance alone. A spokesman said:
“We do not accept that Sam Walker
was discriminated against or treated
detrimentally, and intend to fully and
robustly defend the various claims.”
The tribunal heard that senior
executives had also questioned Walker’s
performance over the progress of a huge
IT project called 1HR. Ms Walker said
the project had not been on track since
it launched, but she had brought in the
“right people” to improve performance.
During the negotiations, her daughter,
who is disabled, sustained a brain injury
and Ms Walker was signed off sick in March
2016. Her employment was terminated at
the start of April 2016 and she submitted a
grievance, which was rejected.
The hearing, in Manchester, is set to
continue until 31 August.
10 | SEPTEMBER 2018

Food and farming
co-ops launch fresh
fundraising drives
Two fundraising initiatives have been
launched by co-ops in the organic food
and sustainable farming sectors.
Food-growing worker co-op OrganicLea,
in Waltham Forest, London, has launched
a crowdfunding campaign to raise money
for a new Woodland Classroom, where
locals can learn horticultural skills. The
co-op also provides training for people
with learning disabilities, and works
with volunteers who are long-term
unemployed, at risk of social isolation or
referred through mental health services.
On reaching its minimum target of
£25,000, OrganicLea will build a basic
weatherproof timber-frame structure.
The full target of £38,000 would see the
Woodland Classroom insulated and used
all year round, warmed by a wood burner
and connected to their solar panels.
Meanwhile, Stockwood Community
Benefit Society (CBS), owner of the
biodynamic Rush Farm in Worcestershire,
has launched £500,000 share offer.
Rush Farm, the UK’s only 100%
community-owned farm, opened up
to investors four years ago. Stockwood
says the farm offers significant social,
environmental and economic impacts
in the form of agricultural productivity,
rural employment, renewable energy
generation and wildlife habitat.
Stockwood now wants to scale up the
initiative across the UK and will hold a
conference next spring to meet potential
partners for similar projects.
The share offer pays a 5% return over
four years and the minimum investment
is £100.
u Donate to the OrganicLea campaign at
organiclea.org.uk.
u Stockwood shares are available through
Ethex and at stockwoodcbs.org.
Southern Co-op clears the coast for Co-ops Fortnight
Volunteers from the Southern Coop
braved the heatwave to clean five
beaches during Co-operatives Fortnight
– picking up nearly 23kg of litter, 20 bags
of rubbish and a bucketful of glass. The
retailer says the campaign was a success
and plans an additional beach clean later
in the year. More information about the
Southern Co-op’s campaign to secure a
sustainable future at: s.coop/2aht8
Central England Co-op raises £780k for Dementia UK
Central England Co-operative has raised
more than £780,000 for Dementia
UK in just one year – and announced
its continued support for the charity.
Colleagues, members and customers at the
society have been supporting Dementia
UK for the past 12 months. The year has
seen people from 16 counties undertake
feats of endurance and village fetes.
Midcounties Co-op colleagues charity football match
Employees from Midcounties Co-op are to
take to the pitch against TV soap stars in
a charity football match in Walsall. The
match, at Rushall Olympic FC, will see the
co-op line up against soap stars including
Ashley Taylor-Dawson (Darren Osborne)
and Jacob Roberts (Damon Kinsella)
from Hollyoaks, and Alan Halsall (Tyrone
Dobbs) from Coronation Street.
Birthday bash for Bradford District Credit Union
Bradford District Credit Union celebrated
its 25th anniversary with an event at
Bradford’s City Hall. The credit union was
set up for council staff before becoming
independent and opening its services to
anyone in the district. Membership stands
at 6,500 with 50% of members saving
directly through payroll deduction.
A lift for air ambulance from Lakes and Dales Co-op
Lakes and Dales Co-op has donated funds
from the carrier bag levy to the Great
North Air Ambulance. The business, part
of Scotmid Co-op, runs nine stores in
Cumbria and the north-east of England.
The funding will be used for thermal
blankets, cold boxes to carry blood, and
the service of flight helmets.
SEPTEMBER 2018 | 11

RETAIL
New building, new chapter for radical
co-op store October Books
October Books, the a radical bookshop
co-operative in Southampton, is ready to
move ahead with plans to turn a former
bank building into a community hub.
On 6 August the co-op became the legal
freehold owner of the former NatWest
branch at 189 Portswood Road. The co-op
raised £487,800 through a combination of
loan stock, crowd funding, personal loans
and gifts, and a loan from Co-operative &
Community Finance.
The team will use the ground floor of
the building, which will double up as
a community hub. The top floor
has already been sold to a private
leaseholder, while the first floor is being
sold to the society of St James, a local
charity for homeless people.
The co-op, currently based at a smaller
site on the same street, is renovating the
premises and plans to open the new store
in October.
It will continue to sell a range of popular
fiction, non-fiction, children’s books,
radical books and magazines, specialising
in adoption, humanities, political and
social issues.
Customers can also choose from a
variety of greeting cards, organic and Fairtrade
foods and green household items.
The bookshop runs with support from
five employees and a team of over 40
volunteers and supporters.
Clare Diaper, who joined the team in
2016, said: “We have recently extended
membership of the co-op to customers. We
want local people to have the chance to
get involved in the business and influence
what we do and sell.
“We have been amazed by the support
we have had from the local community
and we want to give something back.”
Founded in 1977, October Books
has been providing books for the local
community for over 40 years. The
crowdfunder aimed to secure the longterm
future of the bookshop by helping it
establish a permanent base.
Ian Rothwell, investment manager
at Co-operative & Community Finance,
p The store is planning a community hub
said: “There is something about radical
bookshops, especially long-established
ones like October Books. They have a
special place in the hearts of local people
and now by opening up the old bank to
community use that bond will become
even stronger.”
Members of the co-op include singersongwriter
Jaquie Daniels, who composed
a song, Buying the Bank, to show the
strong community spirit within the
co-op bookshop.
EMPLOYEE OWNERSHIP
Cambridge tech firm now in the hands of its staff
p There’s a new addition to the family of
worker-owned firms
Product and technology innovation
experts Cambridge Design Partnership
(CDP) have made the switch to
employee-ownership.
CDP’s new structure will see its 10
partners continue to manage the company,
with staff electing a committee to represent
them. A member of this committee will
attend regular management meetings to
maintain staff involvement.
The move gives all staff the opportunity
to share in the profits of CDP, which was
set up 22 years ago by three engineers in
Toft, Cambridgeshire. Since then, it has
grown to employ around 120 scientists,
both in the UK and at the company’s office
in Palo Alto, California.
CDP has switched to employeeownership
to give the company the
flexibility to further expand without the
involvement of external shareholders, and
to reinforce its status as a key employer
in Cambridge, fostering the skills of
locally trained engineers, digital experts,
designers and support staff.
The move comes as research from
independent panel of 20 leading
business organisations was published
in the report, The Ownership Dividend.
Over the past 12 months, the panel,
comprising senior business leaders and
industry experts, found that employee
ownership delivers outcomes that are
significantly beneficial at three levels: for
individual workers, for businesses and
the wider economy.
Founding partner Mike Beadman said:
“As a technology consultancy business,
CDP recognised that people were the real
value in the company and the key to future
growth, so transferring ownership was the
most logical progression.
“For the clients of CDP, employee
ownership demonstrates the commitment
of the company to independence and the
long-term relationships that fuel their
success. We are now looking forward
to the next phase of growth where we
can take on even more challenging
developments for our clients.”
12 | SEPTEMBER 2018

MODERN SLAVERY
Co-op Party celebrates as more
councils take steps on forced labour
p Co-op Party members collect a petition in Kettering
The Kettering branch of the Co-operative Party is celebrating
the adoption of a resolution by the local council to address the
issue of modern slavery, after campaigning to raise awareness.
Members of the local party council set up a street stall in
the town, handing out fliers reminding people of the area’s
abolitionist past and asking them to sign a petition asking
the council to sign up to the Co-operative Party Charter on
Modern Slavery. A total of 88 people signed up to the petition
in two hours.
The town’s place in the history of the fight against slavery
comes from missionaries William Knibb and John Smith, who
were prominent abolitionists in the 19th century.
Co-op Party member Peter Weston spoke at the council
meeting where the resolution was on the agenda. In a post on
the Co-op Party’s website, he said that, although the resolution
did not meet all of the charter points, it fulfilled the most
important ones.
Councils adhering to the charter commit to 10 measures.
These include requiring contractors to comply fully with the
Modern Slavery Act and challenge abnormally low-cost tenders
to ensure they do not rely on potential contractors practising
modern slavery. Councils are also expected to report publicly
on the implementation of the policy on an annual basis.
Meanwhile, Conservative-led Cherwell District Council has
adopted the charter. So far, 24 local authorities covering more
than five million people have implemented the measure.
The Party is organising a ‘Month of Action’ on Modern
Slavery, which will run from 13 September to 18 October. The
month will include further councils signing the charter and
activity by members across the country.
Co-ops have been at the forefront of the campaign to tackle
modern slavery, with the Co-op Group launching a scheme that
enables victims of modern slavery to secure employment at its
food stores.
SUPPORT
QUALITY
JOURANLISM.
The Media Fund
is a co-operative
of over 40 media
organisations,
which helps to
crowdsource
funding for quality
independent
media in the UK.
themediafund.org
SEPTEMBER 2018 | 13

COMMUNITY
Co-op Foundation steps up campaign on youth loneliness
Charity and community organisations
tackling youth loneliness across England
can now apply to the Co-op Foundation
for a share of £2m.
The Co-op Foundation, the Co-op
Group’s charity, launched the fund to help
organisations explore youth loneliness in
greater depth, test youth-led innovations
and share their learning as part of Belong,
the Foundation’s national network of
partners working on the issue.
Grants of up to £80,000 are available,
targeted at organisations supporting
young people in more deprived areas or
with specific circumstances that increase
the risk of loneliness.
The launch is part of the wider £11.5m
Building Connections Fund, announced
by the government in June. The youthspecific
strand includes £1m match
funding from both government and the
Co-op Foundation.
Jim Cooke, head of the Co-op
Foundation, said: “The youth strand of
the Building Connections Fund will help
bring young people together to come
up with innovative solutions to tackling
loneliness while building their confidence
and skills to strengthen their connections
and sense of belonging.”
The Foundation has also issued a report,
A Place to Belong, with charity UK Youth.
Based on data from youth workers, the
report assess the extent of youth loneliness
and the need for a strategy to tackle it.
Mr Cooke said: “Youth organisations are
an important line of defence in tackling
Starting a conversation about death
Almost 18 million people are
uncomfortable talking about death,
according to a Co-op Group survey into
death, dying and bereavement.
The survey – the UK’s biggest to date
with 30,000 respondents – is part of the
report Making Peace with Death, which
says the nation needs to tackle its taboo
around death, which can lead to mental
health problems, as well as money
problems if people fail to plan ahead.
loneliness, but this research shows they
face challenges that affect their ability to
support young people as effectively as they
would like.
“We call on other funders, sector leaders
and policy-makers to join us in responding
to the insights and recommendations from
A Place to Belong.”
The charity has also begun building
a network of projects to help young
people make stronger connections in
their communities. Several pilot projects
exploring a range of practical approaches
to youth loneliness were completed last
year, directly benefiting 161 young people.
One project was the Royal Exchange
Theatre’s Heard Not Hidden scheme,
working with young deaf people through
workshops and creative activities to
help with confidence-building and selfexpression.
The Royal Exchange is using
The Group is now working with
charities including the British Red
Cross to address some of the issues
identified in the survey. And it is
drawing up guidance for employers to
help them support workers following a
bereavement.
The retailer hopes to drive a shift in
the national language used to talk about
death to more direct conversations, and
create more support networks.
the lessons from the pilot to extend its work
across Greater Manchester.
This work is in addition to the £5.4m
raised for youth groups in just under two
years through the Co-op Group’s Local
Community Fund, to which 1% of member
spending on Co-op own-brand products
is donated for local causes chosen by
members. They include the Scouts and
Guides, with nearly 400 Guide, Brownie
and Rainbow units receiving £2,100,000.
Rebecca Birkbeck, director of community
engagement at the Co-op Group, said: “Our
members are passionate about supporting
young people and it’s the sector we’ve
backed more than any other, with no fewer
than 3,000 organisations benefiting from
our community fund.”
u Applications for the fund close on 26
September, at blog.coopfoundation.org.uk
14 | SEPTEMBER 2018

GLOBAL UPDATES
AUSTRALIA
Co-op body looks
to keep movement on
track with governance
and accounting guides
The Business Council of Co-operatives
and Mutuals (BCCM) has released a new
set of governance principles for co-ops.
The apex body for the Australian co-op
sector compiled the principles after an
18-month development and consultation
process in partnership with the
Co-operative and Mutual Enterprise (CME)
100 Chairs’ Forum – set up in 2015 to
promote the development of the “highest
standards of corporate governance”.
There was also consultation with BCCM
members and governance experts.
The nine principles are:
• Create, protect, return member value
• Lay solid foundations for management
and oversight
• Structure board to add member value
• Act ethically and responsibly
• Safeguard integrity in CME entity
reporting
• Make timely and balanced disclosure
• Respect the rights of members and
other stakeholders
• Recognise and manage risk
• Remunerate fairly and responsibly.
In its introduction to the document,
BCCM warns: “In Australia as well as
internationally, we are at a crossroads in
relation to corporate governance. Such is
the crisis in the governance and culture
of corporations that governments are
taking unprecedented steps to compel
businesses to address systemic failures in
their governance processes.”
It adds: “The growing recognition of the
contribution of co-operatives and mutuals
to Australian economic and community
development, suggests it is not only
imperative but also opportune, for the
Australian CME sector to demonstrate,
through its own efforts, a commitment to
robust, member-focused governance.”
The CME 100 Chairs’ Forum will
periodically review the principles and
BCCM wants feedback from members.
As a next step, BCCM has identified two
p The new governance principles from BCCM
property rights problems: firstly, “the
horizon problem”, where the life of an
investment in a co-op or mutual is longer
than the tenure of a typical member – for
instance where the membership is ageing.
“This can lead to underinvestment or to
a temptation to ‘cash out’ the value locked
in the CME through demutualisation,”
it says.
The second issue is “the freerider
problem” which “arises when members
get access to the same rights and benefits
despite making different levels of
investment”.
In another initiative, BCCM has worked
with the Australian Accounting Standards
Board (AASB) to offer guidance on
co-ops and mutuals.
This comes in the form of FAQs on
the AASB commentary
website, which explore how
co-ops and mutuals differ from other
organisations, and what implications
these differences might have when
assessing their financial position and
performance.
“Co-operative and mutual enterprises
(CMEs) have existed in Australia for
centuries,” says BCCM. “Despite this
long history, they are not recognised or
understood by many Australians, and
their impact on our society and economic
life is not sufficiently appreciated.”
It added: “We are grateful to them for
their hard work in ensuring CMEs are
understood by accounting professionals.”
The initiative arises from the 2015 senate
inquiry into the role of co-ops and mutuals
in the economy, which recommended
improving awareness among the
accounting and legal professions.
Co-operative and Mutual Enterprise (CME)
Governance Principles
Incorporating recommendations, guidance and
1st Edition, July 2018
BCCM jets off for a study tour of UK mutuals
BCCM has organised a study visit to the UK from 17-28 September, which will look at
social enterprise, health and social care, employee ownership and housing.
It will include meetings with Social Enterprise UK and the John Lewis Partnership
in London, and visits to the Co-op Group, The Federation and Co-operatives UK in
Manchester, as well as Rochdale Pioneers Museum.
There will be site visits to Rochdale Boroughwide Housing, Salford Community
Leisure Centre, Aspire Mutual, Central Surrey Health, Hackney Community Transport,
Greenwich leisure provider GLL, Surbiton-based Your Health Care and Community
Dental Services in Sharnbrook, Bedfordshire.
In addition, delegates will meet with academics and government policymakers,
with visits to the London School of Economics to discuss the UK Mutuals Programme,
the Centre for Enterprise & Economic Development at Middlesex University, and the
UK government’s Mutuals Programme.
The visit also includes meetings with Adrian Roper, chief executive of Cartrefi
Cymru, and Graeme Nuttall, who led a 2012 review of employee ownership.
1
SEPTEMBER 2018 | 15

p Exte Gazna Co-operative is raising funds so it can continue its work sustaining a rural Basque community and (below) its traditional cheeses
FRANCE
Crowdfunding: A
new way to sustain old
traditions for a Basque
cheesemaking co-op
In the French Basque region a dairy coop
is helping to preserve local sheep
milk cheese – and has launched a
crowdfunding campaign to expand its
cellar space.
Based in the Sauguis-Saint-Etienne
commune, the Etxe Gazna Co-operative
includes 80 farms with 120 producers.
They aim to crowdfund €48,000
(£43,000) to help maintain employment
and improve working conditions. They
need a total of €154,000 (£138,000) for
the refurbishment of their cellar, 56% of
which will be covered by public subsidies.
Etxe Gazna started life in 1985, when
seven farmer members took over a
ripening cellar in Gotein. Later on, in 1992,
they built the current cellar in Sauguis-
Saint-Etienne.
If it secures the funds, Etxe Gazna
will build an 80 sq m shelter, creating
additional space so it can reallocate
rooms for treatment, packing, shipping
and additional storage. It will also
invest in technology and materials such
as computers and printers to improve
working conditions and efficiency.
A new cooling system will permit a
longer ripening process, enabling the
development of new flavours.
Once the cellar is revamped, producers
– who make the cheese on their farms
before bringing it to the co-op for ripening
– will benefit from joint packaging,
shipping and marketing. They also save
money through bulk-buying supplies
through the co-op.
Cheese is produced from three local
breeds, Manex Tête Noire, Manex Tête
Rousse and Basco-Béarnaise, and in
some case the traditional practice of
transhumance is followed, moving
livestock to higher pastures in summer
and lower valleys in winter. This allows
sheep to eat mountain flora, which gives
the cheese a distinct flavour.
The co-op has supported families with
a long tradition in farming, helping young
people to stay in the area. One of them is
Thomas Arhance, who now works with his
mother and wants to preserve the legacy
of his grandfather’s farm, as well as the
local culture and Basque language. “We
have all we need to stay here,” he said.
Those interested in supporting Etxe
Gazna’s cause can invest between €10 and
€400. The co-op is offering small rewards
for those contributing the crowdfunding
campaign. A €25 (£22.50) contribution
will be rewarded with a letter from a sheep
while a €50 contribution will give people
the chance attend a cheese-tasting session.
For €100 (£90), those contributing will be
able to take part in transhumance, while
a €500 (£450) contribution gives the
contributor the opportunity to spend a
summer day exploring the co-op.
So far, Etxe Gazna has raised €1,855
(£1,660) from 34 contributors. The
crowdfunding campaign is open until 29
September at s.coop/2aj5f
SPAIN
Sweet dreams of an organic future for beekeeping co-op
Spanish beekeeping co-op Apícola
Bierzo Sociedad Cooperativa looks set
to have 30% of its production officially
organically certified next month, as part
of its drive to change most of its hives to
organic production.
The co-op, in the Castile and León
region of northwestern Spain, has been
working to meet the requirements of the
Instituto Tecnológico Agrario de Castilla y
León, which monitors product quality in
the region.
The co-op’s secretary, Javier Morán,
said: “We want to promote the quality of
our honey and the best guarantee right
now is organic certification.
“We have completed all the necessary
paperwork and delivered all the
documentation that was requested.
And we envisage that by the middle of
September quality testing can begin.”
The organic certification will be given to
three types of honey the co-op produces –
heather, chestnut and oak.
16 | SEPTEMBER 2018

USA
Testing ways for
credit unions to tackle
financial exclusion
among minorities
The Filene Research Institute has
published a report on how credit unions
and community banks can help more
minority households who are suffering
from financial exclusion.
Government figures show that 45.5%
of Hispanic and 49.3% of African
American households were unbanked or
underbanked in 2015. Only 18.7% of white
households fall into these categories.
Minority households are also twice as
likely to live in asset poverty, compared to
white households.
Together with partners Ford Foundation
and Visa, Filene launched the Reaching
Minority Households incubator to develop
financial products.
Five financial products were identified
and tested across five financial
institutions. These were: loans for noncitizen
members; data-mining techniques
to identify households that could benefit
from an auto-loan refinance; small-dollar
loans based on relationship factors other
than credit score that relied on rapid
underwriting and disbursement via
a mobile application; small-business
microloans to entrepreneurs; and loans
to consolidate high-rate payday loans into
one affordable payment.
The tests found that serving financially
vulnerable populations starts with having
the right mind-set. However, serving
minority households requires an approach
tailored to the needs of the individual
community served by each credit union.
The institute highlighted that such
programmes should not stand alone but
be part of a suite of services for those
financially vulnerable.
Another finding suggests that credit
unions need to look beyond traditional
measures of creditworthiness such
as credit scores to determine which
customers are a good fit for their product.
Filene also noted that charging higher
rates to vulnerable populations based
on credit risk can often be necessary to
ensure financial sustainability.
Accompanying this report is one credit
union member’s personal story of how
she started her own business with support
from Point West Credit Union in Portland,
Oregon. Sara Rodriguez obtained a US
$500 business loan from her credit union
in spite of the fact that she didn’t have a
social security number. This financial
support enabled her to start her own
business, now a thriving enterprise.
Report author George Hofheimer, said:
“Providing products like those tested in
the incubator program can be a win-winwin
for the customer, financial institution
and community.”
PARAGUAY
Paraguay launches technical baccalaureate in co-operatives
p Ariel Guarco joins officials at the launch
The Federation of Paraguayan
Co-operatives (FECOPAR) has launched a
technical baccalaureate in co-operatives.
The BT Coop qualification will be taught
at the National School of Commerce and
was launched last month at a ceremony
featuring Ariel Guarco, president of the
International Co-operative Alliance.
The three-year curriculum is in line
with co-operative values and principles.
Students will learn about the management
of co-ops take internships in preparation
for a career in the sector.
It is hoped the baccalaureate, the result
of an agreement between the federation
and the Ministry of Education and
Sciences, will also help to shape young
people into responsible citizens.
Initially, a pilot project will enrol
29 students and once the first cohort
graduates, the federation plans to work
with other schools and colleges to expand
the course.
The Paraguayan constitution says co-op
principles must be disseminated through
education as an instrument of national
economic development.
“From the International Co-operative
Alliance’s perspective, having cooperatives
included in the educational
curriculum is a priority,” said Mr Guarco.
He added that the fifth Co-operative
Summit of the Americas, due to take place
in Buenos Aires on 23-26 October, would
feature a forum on co-operatives and the
educational system.
“The objective of this forum is
developing a collaborative network that
would facilitate initiatives in each country
to incorporate content on co-operatives in
all-level curricula,” he said.
The event will feature a virtual
exchange, with participants sharing
their experience remotely and discussing
the documents that will come out of
the summit.
“We have the responsibility to promote
the idea that all children and young people
must know that there are other ways of
organising ourselves, that there is not a
single way to provide ourselves with food,
to get work or to promote development,”
added Mr Guarco. “They should know
that there are alternative paths and that
co-operatives are one of these.”
SEPTEMBER 2018 | 17

ITALY
Co-op Italia junks the junk food from its checkouts
p The retailer is putting healthier snacks by the tills
Italian retailer Coop has launched a
campaign to promote healthy eating by
replacing the usual checkout snacks with
healthier alternatives.
The supermarket announced it would
favour single-portion snacks based on
nuts and seeds, dried vegetables and
fruits, cereal bars, organic food and other
products with nutritional value. These
will include products from the Bene.sì
Coop and Viviverde ranges. It will roll out
the campaign across 900 stores to offer
snacks that are low on sugar, fat and salt,
and free from preservatives.
The initiative comes four years
after the magazine Il Fatto Alimentare
launched a petition on Change.org
asking supermarkets to remove
unhealthy snacks from checkouts.
The magazine argued that impulsive
purchases made at checkouts tend to
include fattening products.
A 2016 report by Euro Coop, the sectoral
body of the International Co-operative
Alliance, showed that consumer co-ops
were very active in fighting obesity. It said
Co-op Italia had developed a special logo,
Moderate Consumption for Children, for
use on products that appeal to children
and are rich in sugar, salt or fat, such as
fruit juice.
Coop Italia uses another logo to tell
their customers how many minutes of
physical activity are required to burn off
calories from the product.
In its report for the year 2017, Coop Italia
revealed that health was a key concern for
its customers, with products perceived as
having a beneficial impact witnessing an
increase in sales.
Overall, 70% of consumers shopping at
Coop Italia said they were willing to pay
more for higher quality products. Sales
of free-range eggs had also increased
by 15%, along with sales of wholegrain,
gluten-free and lactose-free items.
SPAIN
Copa-Cogeca hopes trade talks will pour olive oil on troubled waters
Copa-Cogeca, the organisations
representing European farmers and agri
co-operatives, have spoken out against
the US decision to impose tariffs on
Spanish table olives, which they labelled
“protectionist”.
The body hopes the recent meeting
between the US president Donald Trump
and European Commission president
Jean-Claude Juncker will relieve the
growing trade tensions.
After their meeting to discuss tariffs on
26 July, Mr Trump and Mr Juncker issued
a joint statement which said they would
work together towards “zero tariffs, zero
non-tariff barriers and zero subsidies on
non-auto industrial goods”.
Copa-Cogeca welcomed the meeting
and said it hoped the USA would remove
tariffs for ripe olives.
In June, the US Department of
Commerce announced tariffs on olives,
from 7.52% to 27.02%. It argued that the
produce was sold for less than its “fair
value”. In 2017 imports of ripe olives from
Spain amounted to US$67.6m.
The move resulted in Spanish olives
facing total taxes of 34.75% to enter the
USA’s market.
When the tariffs were imposed, Copa-
Cogeca secretary general Pekka Pesonen
said: “We are very disappointed about
the way in which this trade dispute is
escalating.
“It will be detrimental to farmers
on both sides of the Atlantic and will
also deprive USA consumers of quality
Spanish produce.”
According to Copa-Cogeca, Spanish
imports have already faced additional
duties totalling 21.6% since January this
year, causing Spanish exports to the US
to drop by as much as 42.4% in the first
quarter of 2018.
The organisation says the gap is being
replaced by an increase in imports from
Morocco (33%), Egypt (50%), and Turkey
(82%), rather than by US production.
“We welcome support from the EU
Commission and heads of state on this
issue,” added Mr Pesonen. “The Common
Agricultural Policy is non-trade distorting
under WTO rules and it is consequently
unacceptable to impose such duties.
“We call on the Commission to
take proceedings in the World Trade
Organisation (WTO) against this unlawful
action. The Commission must also work
on finding new markets for our quality
produce to help offset the economic losses
Spanish producers are facing.”
Esther Herranz, an MEP with the
EPP group who sits on the European
Parliament’s Agriculture and Rural
Development Committee, said: “Among the
many similar trading procedures that the
US has opened against European exports,
this one is especially worrying since
the USA is questioning the CAP legislation.
18 | SEPTEMBER 2018

ARGENTINA
Agro-industrial
co-ops head for Buenos
Aires for world summit
Co-ops from around the world are meeting
together on 11 September at the first
international agro-industrial co-operative
conference in Argentina.
Organised by the Confederación
Intercooperativa Agropecuaria Limitada
(Coninagro), the conference will be held
at the Buenos Aires Grain Exchange –
and co-operatives from Brazil, Uruguay,
Chile, Spain, Italy and the Czech
Republic will take part. Among those
to confirm attendance is Mondragón,
the Spanish federation of worker co-ops
based in the Basque Country.
A Coninagro spokesperson said: “It will
be an opportunity to explore the synergies
between the members of the international
agro-industrial co-operative movement.
And we will gather key players from the
co-op movement here in Argentina, who
embody co-operative values and recognise
the potential for further development.”
p Argentina has a diverse, export-oriented agro-industrial sector
The conference, which will look
at where the agro-industrial co-op
movement stands in the world economy,
and where it is heading, opens with a
political session with governors of leading
Argentine agro-industrial provinces.
Later, representatives from public sector
co-ops will explore opportunities for
Argentine and international co-operation.
Organisers said: “We want the
conference to highlight co-operative
enterprise success stories. It’s an
opportunity to showcase examples of
how the social economy has succeeded
in Brazil, Uruguay, Chile, Spain, Italy and
other countries.”
Delegates will be presented with case
studies, including Vlastníku Puklice in
the Czech Republic. Created in 1952
during the forced collectivisation of the
communist era, the co-op comprises 42
small and medium-sized producers, with
90% of its economic activity coming from
pork and biogas production.
“This measure hits Andalusia in
particular, which is heavily penalised by
the economic crisis.”
She added: “The increase of the Spanish
sector’s competitiveness results from the
efforts made by manufacturers to reduce
costs by means of investments in
cutting-edge technology and not as a
consequence of the European subsidies.
“It is deeply worrying that the USA is not
respecting WTO rules. There is a strong
fear that the next custom duties of the
Trump government may apply to any
European sector: French cheeses, Italian
wines or German sausages could be
targeted next. We have to give a strong
response to America’s action and not just
turn the other cheek.”
SEPTEMBER 2018 | 19

SPAIN
Valencia looking to set up a co-op for hawkers
p Street traders outside Valencia Cathedral
A local council in Valencia, Spain,
is proposing to set up a co-operative
enterprise for street vendors.
Suggested by the city’s department of
co-operation, development and migration,
the project aims to help hawkers integrate
into the formal economy and gain access
to social services while paying tax.
In a draft policy on immigration, Neus
Fábregas, who leads the department,
also suggested allocating a specific space
where the street vendors, mostly from
Senegal, can sell their products.
Valencia has, on average, around 400
hawkers who sell a range of goods on the
city’s streets. The act is illegal and those
caught can receive fines of up to €300 and
have their products confiscated by the
police. The new plan would only involve
those who sell genuine products not
counterfeit items.
In an interview for local media
outlet Las Provincias, Ms Fábregas
explained that many street vendors are
simply looking to earn a living, just like
those who are selling items in shops
across the city.
“The initiative to establish a
co-operative for street vendors is a
measure that appears in the Municipal
Migration Plan, which is in the process
of being approved. Once approved in the
p The local authority hopes it will promote inclusion for street vendors
plenary of the City Council of Valencia,
we will begin to work on the various
measures that appear in it. One of them,
setting up a co-operative, will be a project
that we will do next in collaboration with
our employment department,” said a
council spokesperson.
Valencia is following the example
of Barcelona, where last year the local
council helped to set up Diomcoop, a co-op
for street vendors. This has s 15 members
who provide a range of services, including
catering, surveillance and maintenance.
The co-op, whose members are all from
Senegal, is also now producing clothing
items under the brand and in May they
held their first fashion show.
According to the International Labour
Organization (ILO), workers in the
informal economy are mostly involved
in micro and small enterprises and tend
to have no formal recognition. The ILO
identifies co-operatives as key tools in
transforming marginal survival activities
into legally protected work, fully
integrated into the mainstream economy.
A recent report by the UN body shows
that two billion people, more than 61% of
the world’s employed population, make
their living in the informal economy.
In Europe, 25.1% of employment
is informal.
20 | SEPTEMBER 2018

BOLIVIA
Organic co-op
eyes export market for
its mountain chocolate
An organic, Fairtrade Bolivian chocolate
made and marketed by local producers
will soon be available to UK customers.
Founded in 1977, El Ceibo is a co-op
owned by over 1,200 families of farmers.
Its chocolate is made in El Alto, La Paz, at
an altitude of 4,061 meters above sea level.
The co-op’s distributor in the UK, Bolivianborn
Sandra Rice, said the altitude gives
the chocolate a distinct flavour.
While on holiday with her husband, she
went on a tour of the co-op was impressed
by its unique approach. “It is like a big
family, everyone knows each other,” she
said. “The co-op collects all cocoa from
the farmers and then deals with all aspects
related to marketing and distribution. The
entire process is run by the co-op itself,
which is governed by its members.”
El Ceibo sells hot chocolate, cocoa
powder and chocolate bars. The bars also
include specific Bolivian ingredients such
as Uyuni salt and Andean royal quinoa.
Because there is no need for
intermediaries, the co-op can provide
farmers a better price for their cocoa. They
also elect representatives to govern and
oversee the business.
The co-op is now making efforts to
appeal to younger members. “I am the
son of a founding member,” said sales
manager Michel Yucra Vargas, “but young
people think more about themselves, they
do not want to be involved. That is why
we organise workshops to promote the
co-op model.”
El Ceibo is named after the ceiba tree,
which grows to 240ft. “Our philosophy
is to be as resilient as the tree in spite of
challenges,” said Mr Vargas.
New Zealand co-op movement holds its awards
At its annual awards, Cooperative
Business New Zealand honoured Kim
DeGarnham from Foodstuffs South
Island, for her outstanding contribution.
Farmlands and Silver Fern Farms won
the co-operation among co-operatives
award for their joint governance training
initiative, Westland Milk Products won
co-op of the year and Murray King, chair
of Livestock Improvement Corporation,
was named co-op leader of the year.
Platinum anniversary for International Credit Union Day
International Credit Union Day, on 18
October, takes the theme Find Your
Platinum Lining to mark the event’s 70th
anniversary. Brian Branch, president
of the World Council of Credit Unions,
said: “ICU Day is the opportunity to
engage credit union members, share their
experiences and celebrate.”
A museum for the co-op movement’s other Manchester
The birthplace of the USA’s credit union
movement – Manchester, New Hampshire
– is now home to America’s Credit Union
Museum. Based in the home of the Mary’s
Cooperative Credit Association, which
opened in 1908, it is also home to the
Credit Union National Association (CUNA)
Research Center which will help credit
unions tackle modern-day challenges.
Ex-Deliveroo drivers launch their own co-op alternative
Mensakas, the Barcelona-based food
delivery co-op founded by former
Deliveroo, Glovo and UberEats couriers,
has crowdfunded €18,840 (£16,890)
to launch its mobile app. The IOS and
Android app will give customers access to
range of menus and products provided by
the co-op’s partners.
Milestone for Canada’s co-op youth summer camps
Canada’s Saskatchewan Co-operative
Youth Program, also known as Co-op
Camp, is celebrating its 90th anniversary.
Founded in 1928, the series of annual
summer camps contributes to the personal
development of 12 to 18 year olds. Its aims
are to instil self confidence, leadership
skills and co-op values in young people.
SEPTEMBER 2018 | 21

MEET...
... Julian Coles,
Chief executive officer at
Tamworth Co-operative
Julian Coles is the eighth chief executive officer in Tamworth Co-operative’s
131-year history. Following a career that saw him work with companies such as
Dictaphone and sewing machine-maker Singer, he works with around 300 staff
in the Staffordshire-based society that operates 12 food stores, eight funeral
sites, a department store and several property investments.
HOW DID YOU FIRST GET INVOLVED IN
CO-OPERATIVES?
I joined the Tamworth Society about 21 years ago.
It ticked all the boxes for me at a time when I was
looking for a new position. My first role was mainly
financial, but I saw it could lead into other areas.
I was impressed with what the society stood for,
including the family business mindset you could
see in a lot of the operating aspects.
COULD YOU DESCRIBE A TYPICAL WORKING DAY?
It tends to be a little bit of everything because
we have quite a stream of different operations.
Involvement in our trading businesses is the main
side – the food business, department store and
funeral side. We don’t have any other individual
that really handles the property side of things other
than an outside agent, so I do spend a bit more
time on that. My role is also to act as the interface
between the board and the trading management.
We have a fairly unusual governance structure
in co-ops with a non-executive board. It’s a very
special relationship and I think the whole thing
works, but everybody has to understand their role
and always be clear on what their remit is.
WHAT IS THE BEST THING ABOUT YOUR ROLE?
The co-operative way of working really works.
A few years ago we weren’t producing such good
trading results; I’m pleased with the current
level, but one of the best things is how that is
almost a stepping stone. We work as a business
to generate the cash for the future, but we also
have to be generating cash to be able to do the
good community initiatives we want. We have
a community dividend fund which links a local
retail branch to a good cause. Most retail societies
have something similar – we possibly do ours in a
slightly different way as customers at each of our
branches nominate good causes. We also use the
money from the carrier bag levy as part of this.
Soon we’re going to be giving out around £26,000
to about 16 organisations. We’re very much looking
forward to that, it’s a great thing to be able to do –
raising money within our community that can then
be given back to the community.
WHAT IS THE HARDEST PART OF YOUR ROLE?
We have had to make some difficult decisions. I
took over as CEO in 2009, and had to take a number
of actions – such as closing branches that weren’t
performing for us and, as many other organisations,
winding down the final salary pension scheme. It is
difficult, but for us to continue as an organisation,
you have to make those kinds of decisions.
WHAT IS TAMWORTH’S CO-OP DIFFERENCE?
One difference is all the different strands we have
as a business. There’s a very large co-op presence
in our area, and we are genuinely different with
our community work from the majority of
organisations. Tamworth has been a fairly
constant size for a few years, but to be an effective
co-op, co-operation has to be within the DNA
... TO BE AN EFFECTIVE CO-OP, CO-OPERATION HAS
TO BE WITHIN THE DNA ALL THE WAY THROUGH
22 | SEPTEMBER 2018

ISSN 0009-9821
9 770009 982010
01
all the way through. I think the board’s role is
very important in that, ensuring management
runs the business in a proactive and co-operative
way, rather than a corporate way. We put on
quite a lot of training for staff and include our
values and principles within that. All of the
co-op values and principles are important, but one
thing we have always focused on is our members
getting a return (there is a dividend payable) and
trying to make them part of the total business.
WHAT ARE THE BIGGEST CHALLENGES AHEAD?
Like in many towns, Tamworth town centre is quite
challenging for trading – we’ve noted that in recent
reports for our department store and our town
centre supermarket facility. I think there is also
a number of challenges out there more generally.
There’s Brexit. There’s technological changes,
and trying to keep apace of Epos (electronic
point of sale) systems – we’re all becoming much
more dependent on computer systems to run a
business during the course of the day, and we’re
trying to make all our systems more resilient to
ensure we continue to clear card payments if we
lose one channel of access, for example. Those
developments are very important for the future,
but it’s challenging to ensure you have absolutely
everything covered.
WHERE DO YOU SEE TAMWORTH CO-OP IN FIVE
YEARS TIME?
Convenience retail generally is going well, and
we’ll continue to evolve. Our funeral department in
particular continues to evolve rapidly, bringing in
quite a lot of change, but I think we do that quite
successfully across the whole business. I would
expect us to continue to be a thriving, independent
co-operative in five years, 10 years and beyond.
news Issue #7294 APRIL 2018
Connecting, championing, challenging
APRIL 2018
EDUCATION
Co-op learning:
principle five
in action
Plus ... 150 years
of East of England ...
and updates from the
Co-op Retail and Abcul
conferences
£4.20
www.thenews.coop
SEPTEMBER 2018 | 23

YOUR VIEWS
RE: MEET WENDY CARTER
The advice from Wendy Carter [new head
of communications and marketing at
Co-operatives UK, above] is spot on. To
be able to articulate clearly, quickly and
in a compelling way what your co-op is
and does, its USP and most importantly
what it wants and needs, is so important
to being able to tap in to Co-operatives
UK as a business network. Check this out:
uk.coop/principle-six-events
Sion Whellans
Via Website
or anyone else wants is more cars, more
pollution and more noise, which would
make life unbearable.
Chris Maggs
Via email
GUY SINGH-WATSON - A GOOD
(ORGANIC) EGG...
He seems like such a good egg, Guy Watson
[founder of Riverford Organic Farmers,
which recently switched to employeeownership].
And by that I mean an organic
egg. I’ve had Riverford veg boxes for nearly
10 years, and it’s such a good organisation
to shop from. You never feel like you’re just
a customer being sold to, you feel part of it.
Ethelreddy
Via website
Have your say
Add your comments to our stories
online at www.thenews.coop, get
in touch via social media, or send
us a letter. If sending a letter, please
include your address and contact
number. Letters may be edited
and no longer than 350 words.
Co-operative News, Holyoake
House, Hanover Street,
Manchester M60 0AS
letters@thenews.coop
@coopnews
Co-operative News
RE: CENTRAL ENGLAND LAUNCHES
RELAXED CHECKOUT LANES FOR
VULNERABLE CUSTOMERS
Fabulous idea – sadly society these days
has no tolerance of the frail, unsteady or
vulnerable. Everyone is rush to be there
yesterday.
Adipose Lynn
Via Facebook
This should be available at all tills. It’s
called customer service.
Brenda Gleadle
Via Facebook
RADSTOCK DEVELOPMENT
I wish to object strongly to the proposed
development of the Radco Co-op car park.
We live looking down on the car park. We
watch the wildlife in the trees surrounding
the car park every day. The last thing we
24 | SEPTEMBER 2018

#Opencoop: The Open 2018 conference
Delegates gathered in London at the end of July for the Open 2018 conference on platform co-operatives, organised by the Open
Co-op. The two-day event discussed ways technology could allow co-ops to rival the power of the tech giants which have come to
dominate the 21st century economy – and could even allow them to create their own currencies ...
Online uprising: How the
grassroots is taking on the
global tech monopolies
There has been growing unease around the world
about the rising power of the 21st century tech
monopolies. Efforts to constrain them include
measures by the European Union, which has
levied fines against some companies, while other
countries have made attempts at nationalisation.
As well as these top-down counter measures,
there are grassroots innovations being attempted,
as tech innovators develop rival models to offer
consumers and workers a fairer alternative.
Duncan McCann, researcher at the New
Economics Foundation, told the Open 2018
conference that many tech platforms fail to engage
the workers providing the service – and, while
regulation exists in several countries to protect
these workers, it is not sufficiently enforced.
One way to help start-ups and social enterprises
as they try to compete is to open up their access
to data, he said.
Another alternative is to design infrastructure
that is resilient to monopolies. Jaya Klara Brekke,
researcher on decentralised systems and
architectures, said regulation could be a tricky
solution, because customers sometimes benefit
from using these platforms and support them.
But she is optimistic about Blockchain, a
peer-to-peer technology created to tackle issues
around power. “A lot of developers are considering
questions of empowerment, transparency and
privacy,” she said.
Nathan Schneider, assistant professor of media
studies at the University of Boulder Colorado,
insisted that platform co-ops need self-regulatory
mechanisms – such as common standards, and
checks and balances of power. “It’s interesting to
see how new political theories are finally entering
the space that has been so dominated by other
approaches,” he said. “Protocols are power.”
THE CAPITAL CONUNDRUM
Fledgling platform co-ops face the challenge of
getting upfront investment in a project that might
not work. Co-ops, which put members’ interests
above profit, cannot take the same risks as
organisations like Amazon, which consistently
lost money in its early years before hitting profit.
“This is not a new problem,” said Vivian
Woodell, from the Phone Co-op’s Foundation for
Co-operative Innovation. “In the 19th century,
when co-ops were getting started, railways were
the equivalent of today’s tech businesses. They
were high-risk and many of them failed. Co-ops
stayed away from railways and stuck to more
predictable things like retail. Our competitors do
things we can’t, taking huge risks – sometimes on
the basis that one in 100 succeeds.”
Private providers of capital for tech start-ups
generally look to get a return through “exit” –
selling their stake in the business, often long
before the business enters profit. This is not an
option for co-ops. Mr Woodell suggested new
mechanisms, such selling the right to future
streams of income such as royalties or a share of
profit. But he said the movement would have to
decide if this fitted its values and principles.
Mr Woodell said the Fairphone had shown it was
possible to innovate new ways of raising capital.
SEPTEMBER 2018 | 25

The social enterprise asked 25,000 customers
to pay €325 each in advance for the world’s first
ethical smartphone, which they were ready to do,
even though it was a new organisation which had
never built a phone before. The initiative raised
€8m and turned a profit after releasing its first
handset, which enabled it to produce a second,
larger batch the following year, and eventually to
develop the Fairphone 2.
“We need to find a way to match or replicate
these collaborations that is consistent with
co-op values,” said Mr Woodell.
Co-ops are less risky by nature, he added, partly
because they have a culture of volunteering,
collaboration, and open-source – and present fewer
moral hazards.
“We are innovators and if we have the right
projects, there may be possibility of state
support,” he told delegates.
The conference also explored potential
mechanisms to raise the start-up capital to
develop platforms without compromising
co-operative values. One suggestion was to
issue tokens: people could buy them in advance,
contributing to the co-op’s start-up capital. The
enterprise would then issue tax credits and attach
these to a digital system when the member is
using the service provided by the co-op.
Another idea is to pay profits in a digital currency
that could then be reinvested.
Simon Borkin, programme development lead
at Co-operatives UK, recommended federated
decentralised solutions and creating local co-op
markets where people want to use capital locally.
Delegates agreed that while having one central
entity managing a global platform was not the
best option, more collaboration within the sector
was needed for platform co-operative projects.
Mapping the co-operative and solidarity economy
A number of projects are under way to create
common comprehensive directories to link the
co-operative movement together.
Cooperatives Europe, the regional office of the
International Co-operative Alliance, is working
on Means4End, a map of platform co-operatives
in Europe. Project officer Louis Cousin said this
will be a one-stop source for platform goods and
services in Europe, It needs funding of €1m, which
Cooperatives Europe has yet to secure.
“We are entering an era of data,” said Mr Cousin.
“We want to use the movement of open data to
provide digital services that would make it useful
for organisations and co-ops to feed data.”
One co-op is already mapping tech
organisations. Member-owned and run, the
Digital Life Collective researches, develops, funds
and supports Tech We Trust: technologies that
prioritise autonomy, privacy and dignity.
Co-founder Laura James said the co-op is
developing multiple maps of decentralised tech
and technology organisations that can be trusted.
“We think maps are useful when decentralised
in their curation” she added. “We want to
represent the richness of organisations.”
Meanwhile, the Solidarity Economy Association
is looking to map solidarity economy initiatives.
Its chair, Colm Massey, said the map shows local
and national organisations.
Getting access to information about local
solidarity economy organisations can be difficult,
he added, but the association is looking to
form a steering group to lead the project. Those
interested in taking part can write to Mr Massey at
colm@solidarityeconomy.coop.
Dr Rory Ridley-Duff, professor of Co-operative
Social Entrepreneurship at Sheffield Hallam
Business School, highlighted the difficulties in
trying to map similar organisations, particularly
around agreeing a definition across languages.
Mapping is also a core part of Open Co-op’s
mission. It wants to build a comprehensive
directory and map of all organisations within
the co-operative, collaborative and solidarity
economies. Co-founder Oliver Sylvester-Bradley
said that, while trying to map individuals is hard
due to GDPR legislation, mapping organisations
is not.
“This is going to be achieved by creating a
shared scheme and we all agree what to publish
on it,” he said.
p Speakers Louis Cousin, Laura James, Colm Massey and Tom Ivey
26 | SEPTEMBER 2018

#Opencoop:
Can co-ops develop their own coin?
Arthur Bock,
co-founder of Holo
Delegates at the conference were brought up
to speed with some of the latest approaches to
setting up digital currencies.
Community currencies expert Michael Linton,
who designed the local exchange trading system
(LETSystem) in 1983, has written and spoken on
many aspects of community money systems.
He discussed ways to develop a circular money
system, where money always flows to where it is
needed, providing funding for services that are
valuable to the society. This would mark a shift
in mindset – from an ownership to a value-flow
model, he said.
Matthew Shuttle, communications director
at Holo said his enterprise had developed a
distributed network to shift the financial paradigm
and create a new user-centric web ecosystem. Its
cryptocurrency, Holo, is based on Holochain, an
alternative to Blockchain.
There is no mining on Holochain, which requires
only the devices of the users themselves. The
architecture was developed using certain
elements from Bitcoin and others from Bittorrent.
The technology enables Holochain users to access
data on each other’s devices without a central
authority to coordinate it.
The aim of Holochain is not to develop
a cryptocurrency, says Mr Shuttle, but to
act as a means for communities to foster
economic activities.
Arthur Brock, co-founder of Holo, added that
Holochain wanted to be a mutual platform for
apps. “We encourage people to build currencies
on top of Holochain,” he said. “All these currencies
aim to address issues with flows – there can be
flows within the co-op sector. If we want to create
a ledger system across co-ops we don’t want that
to be exploitative.”
A similar initiative comes from Community
Forge, a non-profit organisation that designs,
develops and distributes tools around
complementary currencies. It has provided
an exchange platform to more than 600
communities to establish and manage their
complementary currency.
Co-founder Matthew Slater said the quantity
of tokens issued in a cryptocurrency is fixed by
the algorithm and the value varies, which means
it can be used for payments and settlements but
also speculation.
“In a mutual credit system – almost creating
money by buying something from someone and
extending credit to them, and then they buy
something from you, so you don’t need money –
all you need is a ledger,” he said. “This is a token
kind of money – a fixed quantity at valuable price.
“Many traders are reluctant to use bitcoin
because they don’t know how much it’s going
to be worth in the future. Tokens just exist and
we pass them around to settle debts and when
money is credit it facilitates exchange – I do
something for you but you do something for me,
too. It works better as a means of settlement.
Within the co-op movement we should be issuing
credit to each other.”
Open Co-op co-founder, Oliver Sylvester-
Bradley, raised concerns around who could
provide funding for creating a co-op coin, along
with developing an exchange platform for the
system and managing the project.
“The co-op coin or mutual credit idea is one of
the key projects of Open Co-op. Get involved,”
he told delegates, encouraging them to read
more about the project on Open Co-op’s website,
open.coop.
SEPTEMBER 2018 | 27

#Opencoop:
Mapping the co-operative and solidarity economy
Delegates at the Open Co-op Conference were
encouraged to make more use of the .coop domain
to market their distinctive business model.
More than 4,866 organisations across 88
countries use the .coop domain. Launched in
2001, it is managed by DotCooperation LLC
(DotCoop), which is jointly owned by the National
Cooperative Business Association (NCBA CLUSA)
and the International Co-operative Alliance (ICA).
The domain is only open to bona fide
co-operatives – and Tom Ivey, communications
officer at DotCoop, says it can help increase their
visibility in a crowded marketplace.
“If every co-op had a .coop url and each member
used a .coop email address, the co-op movement
would have great internet presence and a
media programme worth billions,” he told the
conference. “We own this space as a movement,
it’s available just for us. It’s for our community to
take advantage of.”
A .coop domain can be more expensive than a
.com one, sometimes by more than £50, because
DotCoop has to verify all users to ensure they
are a legitimate member or for the service of the
co-operative community. But Mr Ivey says that the
.coop domain adds value to a co-op’s marketing
campaign by showing its co-operative credentials;
other domain names do not have the same ability
to tell customers about the business.
Because .com is the largest domain extension in
the world, some co-ops might not be able to use it
because it has already been taken.
“With .coop, because it’s a small community
and it is strictly reserved for co-ops, there is much
more chance that people will get the domain name
that they want,” said Mr Ivey.
Co-ops are already using the .coop domain to
increase the visibility of the sector. In Colorado,
a group of co-ops set up Colorado.coop, a
platform where people can search for co-ops
across different sectors and learn more about the
business model.
In the second part of the year, the Dotcoop team
will present case studies of co-ops, big and small,
who have incorporated the domain into their
marketing programme. Mr Ivey said there is still a
need to bust misconceptions.
“It is a lot easier than people think. They
might think it’s difficult to do it or get rid of the
previous website. It’s not true,” he told delegates.
“Websites can be kept exactly the same.”
Adopting a .coop domain does mean moving to
a new email server, he added. Co-ops wishing to
keep their old domain can use both, and users will
be redirected to the new address.
In terms of how long it takes to register the
domain, when a co-op is already up and running
and has bylaws and articles of incorporation,
getting a .coop domain can only take a few days. If
the co-op is still setting up, it can apply for a .coop
domain and start building its website.
In addition to the .coop domain, the
International Cooperative Alliance developed the
Co-operative Marque, a global identity for the
co-op movement, which is free to use for any
bona fide co-op. After they register for the .coop
domain, co-ops also get the Cooperative Marque
and Identity Toolkit to help them to get the most
out of using the marque in their communications.
To promote the movement, the DotCoop team
has started various social media campaigns. At
the International Co-operative Alliance’s global
conference in Malaysia, DotCoop selected around
30 volunteer media ambassadors who have been
promoting the sector on social media ever since.
Around 8,150 .coop domains have been
registered so far, 49% in North America and 38%
in Europe. The UK accounts for 12% of the domains
registered, more than the Asia-Pacific region (6%),
Central and South America (6%) and Africa (1%).
In an attempt to reach out to different regions,
Dotcoop is working with the ICA Asia-Pacific region
to translate their Dot that says a lot campaign
video into various languages.
“The more people adopt the .coop domain,
the more valuable it becomes,” said Mr Ivey.
.coop
www.coop
Chrome
Search Web
The dotcoop website
makes the case for the
new domain
I’m Feeling Lucky
28 | SEPTEMBER 2018

Open 2018: What did I learn?
‘At Open 2018, I had the feeling that
something new was starting to take off’
BY OLIVIER FREY, an author, co-operative
researcher and freelance consultant with a
PhD in economics. He is based in France
I have been working with co-operatives
for almost 15 years – and I am convinced
they are on the verge of a new era, thanks
to digital.
Platform co-operatives symbolise this
new generation of co-operatives that is
going to lead the change and empower
the co-operative movement as a whole.
Having previously read Ours to Hack and
to Own (OR Books, 2017) by Trebor Scholz
and Nathan Schneider, I wanted to learn
more about platform co-ops. So in July
I attended the Open 2018 conference in
London to better understand the hopes
and challenges of this movement.
During two days, people gathered from
all around the world to discuss about the
future of platform co-operatives. How
can blockchain enable Elinor Ostrom’s
eight commons principles? How can
we map the co-operative / solidarity
economy? Is it time for a Co-op coin?
How can the development of platform
co-ops be financed? Can we build a
co-operative cloud?
SO WHAT DID I LEARN DURING THOSE
TWO DAYS?
I learned about platform co-ops that
already existed, such as Resonate,
Stocksy and Savvy – but also that the
platform co-op movement as a whole is
still at an early stage.
I also discovered some interesting
initiatives and tools that can help
platform co-ops set up and grow.
This included organisations such as
Platform6, start.coop and incubator.
coop, which help fund the creation of
a new co-ops – as well as initiatives
to allocate funds collaboratively and
transparently like Cobudget, or help with
decision-making like Loomio.
But to build and run a platform co-op
you need to surround yourself with
computer engineers and people from the
tech world. Hopefully some of them at the
conference discovered (and loved) the
co-op model and will decide to work in the
sector. There are also co-ops developing
digital and data tools who seem more
than happy to help the platform co-op
movement. Co-operative Technologists,
aka CoTech, for example, is a group of
tech-based worker co-operatives that
aims “to ensure that technology plays its
part in creating a fairer world”.
If a platform coop wants to grow
and succeed, it needs to build a strong
community of users. But first it needs
people from the tech world to build the
project from the scratch.
In my opinion, one of the main
objectives of the co-op movement (as a
whole) remains to communicate more
efficiently about the model, the values,
what co-ops stand for... and about the
fact that platform co-ops offer another
vision of the future and promote exactly
what the original Internet was set up for:
decentralisation.
Another thing I noticed during the
conference was that, even though I met
representatives of Co-operatives UK and
Co-operatives Europe, there were very
few non-platform co-ops. So, as Nathan
Schneider pointed out during the event,
the question is: “Does the platform co-op
movement belong to the same community
as the traditional co-op movement or is it
something new and different?”
Finally, what also surprised me was that
there were a lot of American and English
people. I don’t know if it is because
it was held in July or because a trip to
London is expensive, but I encountered
very few French representatives. There
were a couple of French co-ops such as
Coopcycle, HappyDev and Ridygo, but
no representative from Coop FR, the
traditional French co-ops or the French
academic world. Does this mean that
the platform co-op movement is mainly
an American and English movement? Or
is it simply because there’s a language
barrier? Or is it because the French co-op
movement is lagging behind as far as
digital is concerned?
I don’t have the answers to those
questions, but if the platform co-op
movement wants to be more effective and
gather as many people and co-operatives
as possible to actively collaborate, it
must think about this cultural problem.
One thing I was happy to discover was
that there are more tech co-ops than I
had previously imagined. And I’m deeply
convinced that these organisations
should be cherished by the entire co-op
movement. I am sure that digital is
the key for the future development of
coops, whether they are farmers’ co-ops,
consumers’ co-ops, workers’ co-ops…
At Open 2018, I had the feeling that
something new was starting to take off.
Is London going to be the starting point
of the era of the platform co-op
movement, like Rochdale was for the
wider co-op movement?
Maybe it is still too early to talk about
the London Pioneers but still, it was
exciting to encounter people who were
not only talking about co-operatives,
but who were actually working for their
development, too.
SEPTEMBER 2018 | 29

Social Business Wales: 2018 Conference
Supporting social businesses with aspirations
to grow and be more sustainable
How do you get jobs and contracts into some
of society’s poorest communities? This will be one
of the issues discussed at the Social Business
Wales (SBW) Conference on 27 September, where
social businesses (co-operatives, mutuals, social
enterprises and employee-owned businesses) will
gather to share experiences, expertise and ideas
around the issue.
Held annually for the social enterprise and
co-operative sector in Wales, SBW 2018 is a
free event funded by the Welsh government and
European Regional Development Fund (ERDF), and
will be held at City Hall, Cardiff. It is delivered by
the Wales Co-operative Centre, the national body
for co-operatives and social businesses, which
also manages projects which tackle poverty and
promote inclusion through co-operative working.
Rhian Edwards is project manager for Social
Business Wales at the Wales Co-operative Centre,
and believes the social business sector in Wales
is “redefining how business gets done”. In Wales,
social businesses employ over 40,000 people,
offer volunteering opportunities to approximately
50,000 and contribute an estimated £2.37bn to
the national economy.
“This year’s Social Business Wales Conference is
specifically intended to provide social businesses
in Wales with inspiration, ideas and practical
skills which will help them enter new markets,
develop new products and services or adopt new
structures,” she says, “all of which will enable
them to grow and be more sustainable.
“We will be encouraging all our delegates
attending, whether they are from a social
enterprise, charity, co-operative or mutual, to
share best practice; encourage innovation; and
learn from and build partnerships with the private,
public and not-for-profit sector.”
In 2017, the Wales Co-operative Centre
conducted research to map social businesses in
Wales, surveying almost half the organisations
operating in the sector. It found that social
businesses are often located in areas
of deprivation – with 72% describing their main
social or environmental objectives as seeking to
improve a particular community. Almost half were
seeking to improve health and wellbeing.
The report also noted that the typical size of a
social business (in turnover) has increased, but
that lack of – or poor access to – funding was the
most commonly identified constraint on business
growth. Over half of respondents identified
additional barriers, particularly insufficient
staffing/volunteers, the impact of Brexit, and
public sector austerity measures.
From left: Sarah
Dickens, Ken Skates, Dai
Powell and Guy Singh-
Watson
30 | SEPTEMBER 2018

“Collectively, therefore, there is clear evidence
of a growing, increasingly confident and
entrepreneurial social business sector that is built
upon strengthening foundations,” said the report.
“The increase in turnover, jobs and volunteer
opportunities supported by the sector will
have an impact on local economies, community
cohesion, and individual people’s potential to
develop themselves through paid employment,
work experience, and training. The social benefits
of these businesses have tangible effects which
are having a positive impact on communities
throughout Wales.”
The SBW Conference 2018 will build on these
findings, with talks, practical workshops and a
celebration of business growth. The speakers
will come from a range of backgrounds, to
provide different perspectives on the role social
businesses can play in the future growth of the
Welsh economy – particularly post-Brexit.
One of the keynote speakers will be Dai
Powell CEO of HCT Group. He has been with the
organisation since 1993, leading the company as
it developed from a community transport charity
in Hackney, London, into a social enterprise
Channel Islands, a fleet of 730 vehicles and a
2017/18 turnover of £62.9m.
Its commercial track record spans a wide range
of services too – from London red buses and park
and ride to social services and school transport.
HCT says it does this not to create shareholder
value, but to create community value. This is done
in three ways: profits from commercial contracts
are reinvested back into further transport
services or projects in the communities it serves;
training services are delivered for people who
are long term unemployed that specifically focus
on employment and skills; and employment
opportunities are created for people in deprived
communities as the organisation “actively
seeks new ways to make our communities
better places to live and work through the way
we operate”.
Joining Dai Powell are Ken Skates (the economy
secretary for Wales) and Guy Singh-Watson (the
founder of Riverford Organic Farmers, which
recently switched to employee ownership), while
the event will be hosted by Sarah Dickins, BBC
Cymru Wales economic correspondent. Additional
workshops will cover topics from risk management
of national scale, creating over 1,500 jobs and
servicing over 30 million passenger trips annually
across England and the Channel Islands.
“In 1993, with traditional grants under threat,
we came to the realisation that the best way to
become a sustainable social enterprise was to
become an effective enterprise,” says HCT Group.
“We began to compete for commercial contracts
in the marketplace to ensure we could continue to
provide community transport.”
This approach has seen HCT Group grow from a
handful of volunteers and a couple of minibuses
with a turnover of £202,000 in 1993, to a largescale
social enterprise with 1,500 employees,
depots spread across London, Yorkshire, the
south west, the north west, Derbyshire and the
and developing technology for growth, to engaging
the workforce of the future, measuring social
impact and using Welsh language to generate
commercial value.
Businesses attending the event will also be
able to connect with a range of exhibitors from
the public, private and social enterprise sector in
Wales. The exhibitors will feature all the finalists
from the Social Business Wales Awards 2018.
The Social Business Wales Awards and
Conference take place at Cardiff City Hall.
Awards: Wednesday 26 September, 6.30pm-
10.30pm. Conference: Thursday 27 September,
9:30am-4.30pm. For more information, and
to book your free conference place, visit:
wales.coop/sbwconf2018
SEPTEMBER 2018 | 31

CAN BIG CO-OPS LIVE UP TO THE
CO-OP VALUES AND PRINCIPLES?
BY ANCA VOINEA
INTERNATIONAL
EDITOR
When they set up their co-op in 1844, the
Rochdale Pioneers developed seven principles
that are still followed around the world today.
And those values, which show how co-ops
are different from other forms of business, are
more important than ever. A recent YouGov
survey for Co-operatives UK found just 36% of
Britons believe most companies in the UK are
fair to consumers, down from 44% in 2000 and
61% in 1983. But 62% trust businesses such as the
Co-op Group or John Lewis, which are owned
by their members, who have a say in how their
organisations are run.
But are the old co-op values losing ground in
the movement?
ETHICS GAINING GROUND
Traditionally, co-ops are based on the values
of self-help, self-responsibility, democracy,
equality, equity and solidarity. The ICA statement
on co-op identity points out that members
should also believe in honesty, openness, social
responsibility and caring for others.
The Rochdale Pioneers’ society evolved into
today’s Co-op Group. While being memberowned
and governed remains crucial, the
business places strong emphasis on concern
for community. A current campaign focuses on
tackling modern slavery across its supply chains.
“In the 1860s, when the Rochdale Pioneers
took a strong line against slavery by boycotting
cotton produced in the southern states during
the American Civil War, they were upholding
the same values,” says Sterling Smith, a former
official of the International Labour Organization.
“Co-ops need to look at co-operative values
and principles and see how they can be put in
practice today and not have the same corporate
social responsibility strategies as plcs.”
Ethical trading and serving communities are a
consideration for other big co-ops too, following
the rise of the conscious consumer.
A recent Global Retail Trends report by
accounting firm KPMG revealed that honesty and
authenticity were the attributes that mattered
most to customers. Businesses need to stand for
something and reflect that message consistently
throughout the business, from top to bottom.
According to Deloitte’s Human Capital Trends
2018 survey, businesses are no longer judged
just on financial performance and the quality
of products and services, but also their social
impact. The survey involved 11,000 business and
HR leaders across 124 countries. Around 77% of
respondents said that citizenship, defined as an
organisation’s impact on society, was important,
with 18% saying it was a top priority.
Other trends include increased transparency,
higher expectations from millennials over
corporate social responsibility, and a growing
number of businesses taking a political stance.
Should co-ops seek to position themselves as
leaders in these areas? A 2006 research paper
by Sonja Novkovic pointed to literature which
questioned social responsibility as a co-op
“trademark”, given that many investor-owned
businesses were introducing corporate social
responsibility and business ethics.
She surveyed 60 co-op managers and board
members from Canada and the USA. Around 5%
found the co-op business inferior to investorowned
models – and 23% of respondents, mostly
from large co-ops, saw profit as the key goal.
Overall, 93% of respondents found co-op
values and principles important for the
functioning of their co-operative. Respondents
from consumer, agricultural, housing and
utility co-ops chose democracy as the most
important co-operative value. Managers and
representatives from financial co-operatives
and credit unions went for self-responsibility.
Generally, equality was second most important
value, followed by self-responsibility and
equity. The last on the list was solidarity,
even though it was listed as important by
62% of respondents.
The study revealed that while honesty and
openness are more important to the managers,
social responsibility and caring for others matter
more to board members.
THE IMPORTANCE OF SECTOR
In 2014, a survey by Sebastian Hill and Reiner
Doluschitz of more than 300 managers of retail
and banking co-ops in the German state Baden-
Württemberg identified key values. The top five
co-op values were: reliability and honesty (joint
first); sustainability; fairness; and security. Thus,
there were values in the top five, which are not
mentioned by the ICA in its identity statement.
32 | SEPTEMBER 2018

Managers identified other factors such as
“good and fair customer advice”, “proximity,
partnership and professionalism”, “commitment”
and “sense of community”. There was general
agreement between sectors, but banking co-ops
tended to place a stronger emphasis on fairness,
security, reliability, honesty and sustainability,
due to the lack of public trust in the banks
The founder of the German co-op movement,
Friedrich Wilhelm Raiffeisen, based his model on
solidarity and self-sufficiency – values no longer
seen as crucial by all co-ops in the country.
MULTINATIONAL MODELS
For large co-ops, maintaining co-op values and
principles while keeping up with business rivals
is a challenge – and can see them adopt policies
that contradict those values and principles. And
globalisation has pushed many co-ops to go
multinational by establishing subsidiaries,.
In his 2016 paper on the Mondragon Group’s
Chinese subsidiaries, Anjel Errasti describes the
model as “coopitalist”.
Mondragon, a Spanish federation of worker
co-ops, was set up around the concept of
community welfare and solidarity. It is guided by
the seven traditional co-op principles, with three
more added to reflect the importance of workers
owning capital and the preservation of jobs.
In the 1990s Spain’s industrial sector met
fierce competition from foreign multinationals.
In response, Mondragon created subsidiaries
abroad without closing plants at home. Today,
it employs 74,635 people and has a turnover
of €12bn. Around 12,000 people work in its 140
foreign production subsidiaries – but none of
these is a co-op. Unlike worker-members in
Mondragon’s Basque Country base, workers
abroad have no stake in the business, the
distribution of profit, the election of governing
bodies or the daily management of the firm.
The research paper found that these workers
in felt disempowered. Mondragon has aimed to
promote employee participation in some of these
subsidiaries and has talked about converting them
into co-ops – and some domestic subsidiaries
have indeed been converted. But no foreign
subsidiary has been transformed into a co-op,
partly because there is a lack of legislation on
co-operatives in some of these countries.
Errasti’s research concluded that the
management of human resources in Mondragon
foreign subsidiaries did not fit well with the
people-centred approach of co-ops.
LOSE VALUES, LOSE EVERYTHING?
Failure to understand and implement co-op
values can lead to co-op failure. A 2016 study
by Peter Couchman and Murray Fulton – When
Big Co-ops Fail – indicates that co-ops which
fail present similar early warning signs. These
include falling silent on co-op identity and having
managers with no interest or belief in the model.
The research is based on analyses of crises
at big co-ops. It found that directors who fail
to understand their role in a co-op are likely to
appoint managers who are not supportive of
the movement’s values and import mainstream
solutions rather than adopt a co-op one. The
paper suggests the root of failure is being unable
to understand the nature of a co-operative.
“The earliest sign is a co-operative which
sees being a co-operative as a problem, not a
solution,” they warn.
MONDRAGON’S
NETWORK
OF FOREIGN
SUBSIDIARIES – NONE
OF WHICH TAKE A
CO-OP STRUCTURE
SEPTEMBER 2018 | 33

Q&A: DEFINING CO-OP VALUES
IN THE CURRENT ENVIRONMENT
WHAT ARE CO-OP VALUES?
Co-ops are part of a movement sharing a set of
global values and principles. Members believe
in the ethical values of honesty, openness, social
responsibility and caring for others.
CAN WE STILL REFER TO UNIVERSAL
CO-OPERATIVE VALUES?
DOLLY GOH
CHIEF EXECUTIVE
OF SINGAPORE
NATIONAL
FEDERATION OF
CO-OPERATIVES
(SNCF)
We can, although some regions/sectors may use
different words to describe them, or customise
them for local application. For example, at
SNCF, our co-operative values are co-operation,
self-help, mutual help, equality and care for the
community. These values do correspond with
the universal set of values.
DO THEY VARY DEPENDING ON SECTOR
OR REGION? HAVE THEY EVOLVED?
The primary role of co-ops is to meet their
members’ needs. The values are implemented
throughout the process of delivering benefit
to members and ensuring their needs are met.
While the values may be phrased differently by
sector or region, the DNA of co-ops remains
unchanged: to do good and to do well.
WHAT CHALLENGES DO BIG CO-OPS
FACE WHEN PUTTING THESE VALUES AT
THE CENTRE OF THEIR ACTIVITY?
It depends on whether you see the cup half
full or half empty. Some see challenges while
others see opportunities. Most important is to
YOUNG CO-OPERATORS AT SNCF
remember the co-operative DNA which is core
to co-operative existence and that is to do
good and to do well. For example, one may
see the large membership base of a big cooperative
as a key challenge – the difficulty of
managing many stakeholders with diversified
views. But from another perspective, a large
membership base could be seen as a large
number of people who are there to support their
very own business, where they will all benefit
besides helping others in the community. The
big co-operatives have a ready customer base.
It is important to remember the co-operative
DNA and the values that co-operatives are
founded on – and to work from there.
HOW DO YOU MEASURE A CO-OP’S
ADHERENCE TO VALUES, AND THEIR
IMPACT ON THE BUSINESS?
‘MOST IMPORTANT IS TO
REMEMBER THE CORE
TO CO-OPERATIVE
EXISTENCE: TO DO GOOD
AND TO DO WELL’
There is no standard tool to measure the results
derived from adopting the values. However, if
sustainability and loyalty of members – especially
in a crisis – are a measure of success, then co-ops
have done well based on the values.
HOW ARE VALUES AND GOVERNANCE
INTERCONNECTED?
Values define one’s DNA, your roots on which
your strategy, directions, and policies are based.
Governance ensures these values stay at the
core of the co-operative’s heartbeat.
34 | SEPTEMBER 2018

WHAT ARE CO-OP VALUES? DO THEY
VARY DEPENDING ON SECTOR OR
REGION? HAVE THEY CHANGED?
For me, co-op values are the norms and beliefs
that guide the behaviour of co-op members,
leaders (elected and non-elected) and
employees. While co-op values are not the same
as the ICA principles, the principles do share
some of the core elements of the values.
Co-op values contain a sense of reciprocity
– the sense that the actions of each person
will be reciprocated by others, be it the board,
management, employees or other members.
Co-op values also contain a sense of identity:
they reflect concern for the wellbeing of an
identified group (often understood as the
membership, but sometimes extending beyond
that to the community). Within this group,
however, there is a belief and an expectation
that individuals will flourish – the purpose of
the group is to assist the individual members
in some way. These three elements are brought
together by a sense of fairness that is understood
in proportional terms – that benefits and costs
are allocated in proportion to the effort exerted
or the resources committed, and by a sense of
independence. Then the members get to decide
the rules by which they abide.
While the expression of these values has
changed over time, I think the underlying
elements have been a part of co-ops since they
were first formalised. I believe co-op values are
applicable to most settings and most co-ops.
WHAT CHALLENGES DO BIG CO-OPS
FACE WHEN PUTTING THESE VALUES AT
THE CENTRE OF THEIR ACTIVITY?
The big challenge faced by co-ops, big or
small, is to ensure that the values inform and
permeate the decisions made on a daily basis.
In smaller co-ops it is sometimes easier to make
sure the values are in place, although there is
no guarantee that these co-ops won’t suffer the
loss of one or more of the values – i.e., that the
sense of fairness is violated or that the reciprocal
nature of relationships is no longer recognised.
Perhaps the difference is that when the values
break down in small co-ops, the cause is often
linked to particular personalities while when
values break down in large co-ops the cause is
often linked to policy decisions made by leaders.
The key challenge is that the values will often
conflict with particular objectives the co-op has
at a particular point in time. These objectives
are often very important – economic survival –
and need to be addressed. But in doing so, it is
critical that co-op leaders don’t dispense with
the core values. To take an example, in a time of
rapid economic change, co-op leaders may feel
compelled to impose new decision-making rules
or a new organisational structure; such moves
can undermine the sense of independence that
members feel should be present in the co-op.
The core of the problem in these conflicts is
that the co-op did not set the stage for dealing
with them. Co-ops can deal with rapid economic
change, but the process has to be worked on in
advance by, for instance, making sure they have
kept their decision-making processes updated
and their members engaged so that changes can
be made quickly. In other words, conflicts will
always arise – they key is to recognise this and
plan accordingly, with the values firmly in mind.
HOW DO YOU MEASURE A CO-OP’S
ADHERENCE TO VALUES, AND THEIR
IMPACT ON THE BUSINESS?
Since values are associated with beliefs, they are
inherently difficult to measure. Even if a co-op
asks its members about their identity with
the co-op and whether they feel its policies
are fair, members may not truthfully respond.
Furthermore, the beliefs may be simply present
or not present. If this is the case, then a decline
in a belief cannot be used to signal trouble in the
future; instead, the belief may simply collapse
after some tipping point is reached, taking with
it member commitment.
MURRAY FULTON
DIRECTOR AND
FELLOW IN
CO-OPERATIVES
AND PUBLIC POLICY,
CENTRE FOR
THE STUDY OF
CO-OPERATIVES

One way for a co-op to take co-op values into
account in the decisions it makes is to engage
in organisational learning. Instead of spending
most of its resources on getting messages out to
members and other stakeholders, co-ops should
allocate some of those resources to actively
listening to what members, employees and the
community are saying. Active listening requires
an openness to alternative perspectives and a
commitment to respond appropriately. In short,
taking account of co-op values means practising
them on a daily basis. Organisational listening is
key (see s.coop/2aj29 for more details).
HOW ARE VALUES AND GOVERNANCE
INTERCONNECTED?
Closely. Governance is the set of formal and
informal arrangements by which power is
allocated and exercised in any system with
interdependent actors. Governance is thus
the set of formal and informal arrangements
that determines whose (and, by extension,
which) information is privileged, which
individuals and stakeholder groups define
and shape the organisation’s values and
strategy, and who or what shapes the
incentives and norms that focus behaviours.
The co-op values outlined above form a key part
of governance, since they are a critical part of the
norms that determine how power is allocated
and exercised in a co-operative.
Governance – and hence co-op values – affect
the core elements necessary for the financial
and organisational success of the co-operative.
Governance determines how well the various
groups in the co-op are able to solve the myriad
of co-operation and coordination problems
that are critical for strong performance. It also
determines how the co-op views and plans for
the future – determining what is going to be
focused on and how this focus is to occur. Finally,
governance determines the extent to which the
various groups and individuals in the co-op view
its policies and procedures as being legitimate.
Co-op values help address all three of these
challenges – they create the conditions for
co-operation and coordination, they provide
buy-in by members for the direction that is taken,
and they underpin legitimacy.
MERVYN WILSON
FORMER PRINCIPAL
OF THE CO-OP
COLLEGE AND
MEMBER OF THE
ICA PRINCIPLES
COMMITTEE THAT
DEVELOPED THE
GUIDANCE NOTES
WE SEE CO-OPS NOT CALLING
THEMSELVES CO-OPERATIVES
AND CO-OPS PLACING A STRONGER
EMPHASIS ON ETHICAL CREDENTIALS
AND SOCIAL RESPONSIBILITY. ARE WE
WITNESSING A SHIFT FROM TRADITIONAL
CO-OPERATIVE VALUES AND THE
PRINCIPLE OF BENEFITING MEMBERS
TOWARDS MODERN ETHICAL VALUES?
This is a new problem that the movement has
faced for many years, best described as the
denial of our co-operative identity. In the 1970s
and 80s – when the movement was fast losing
market share to the rapidly growing multiples,
mergers were too often reluctantly entered when
bankruptcy was the alternative, and new trading
names flourished along with management think
– the public perception of co-operatives was
defined by the worse examples.
This was also the era of the management
mantra “We need customers not members”.
That led to the erosion of member benefits
and a cataclysmic collapse in member
recruitment – something only reversed when
boards and management recognised the
vulnerability of societies created by decades
of neglect of the membership function in the
face of the demutualisations in the building
society sector and the attempts of speculators to
gain control of the CWS. In addition, governance
failings in the sector led to recognition that an
active and engaged membership was key to
improving governance.
Key to the renaissance of co-operatives in the
noughties was the adoption of the Statement on
the Co-operative Identity in 1995. By providing
a clear and succinct definition, the ICA secured
policy support from the UN, followed by the
International Labour Organization. 2012 as UN
International Year of Co-operatives could never
have happened without this process.
Some found the six co-op values challenging,
preferring to leave them unmentioned, focusing
instead on the social values. The problem
with this approach is straightforward: any
organisation can, and most do, claim to embrace
them. What organisation doesn’t want to be seen
as socially responsible, honest, open and caring?
It’s the co-operative values that differentiate
co-ops. It’s not a pick and mix list – it is the set of
values that makes co-operatives what they are.
CAN WE STILL REFER TO UNIVERSAL
CO-OPERATIVE VALUES?
The Statement on the Co-operative Identity
was adopted after a global consultation lasting
several years. The Co-operative College arranged
workshops throughout the UK. They were seized
36 | SEPTEMBER 2018

upon by members who identified with the issues
arising from the movement’s responses to rapid
economic and social change. Workshops on the
various drafts of the statement were similarly
enthusiastically supported with passionate
debate, leading to the unanimous adoption
of the statement at the ICA Congress.
That was why the ICA Congress in 2011 passed
a resolution to ensure that any changes to the
statement would be subject to a similar global
consultation. The movement recognised that the
globally agreed values are too important to be
tampered with.
WHAT AFFECTS A CO-OP’S ABILITY TO
PURSUE THESE VALUES AND PRINCIPLES?
Leadership and ownership of the process from
the top – the board and senior management.
Shortly after Sir Graham Melmoth was
appointed chief executive of the CWS [in 1996]
he approached the College to develop and run
a programme on the Co-operative Values and
Principles. He recognised that in the decades
of the movement’s retreat it had stopped telling
its managers and employees of its character and
values and their role in implementing them. That
programme, delivered first to the management
executive, then to the 200 most senior managers
in two-day programmes followed by one-day
workshops for the next 1,000, had enormous
impact. But, with personnel changes it was taken
in house and steadily eroded. You cannot blame
managers and colleagues for not knowing what
they have never been told – so a simple check is
to ask: “What training in our co-operative identity
do all new staff receive?”. And perhaps adding:
“Does the appraisal and reward system provide
opportunities to explore how the appraisee has
implemented our co-operative values? Are we
rewarding co-operative success?”
HOW DO YOU MEASURE A CO-OP’S
ADHERENCE TO VALUES, AND THEIR
IMPACT ON THE BUSINESS?
Many co-operatives produce some form
of social report but these would benefit from
greater work to report against our globally
agreed values alongside the appropriate social
reporting standards.
CAN FAILURE TO UNDERSTAND AND
IMPLEMENT CO-OP VALUES LEAD TO CO-
OP FAILURE?
Many governance failings in recent decades
can be described as failure to apply the values.
How many boards have actively encouraged
contested elections, vibrant challenge at
members meetings and seen such challenge
as a reflection of success in building an active
and involved membership, rather than a threat
to their personal hold on power? Are members
being properly informed of setbacks as well as
successes in reporting?
‘DOES THE APPRAISAL
AND REWARD SYSTEM
PROVIDE OPPORTUNITIES
TO EXPLORE HOW
THE APPRAISEE HAS
IMPLEMENTED OUR
CO-OPERATIVE VALUES.
ARE WE REWARDING
CO-OP SUCCESS?’
SEPTEMBER 2018 | 37

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38 | SEPTEMBER 2018

CO-OP VALUES
IN THE
MODERN WORLD
It may seem like the soft side of business, but
values are at the heart of every example of cooperative
excellence – and core to the advisory
work of Co-operatives UK.
The International Co-operative Alliance has
codified 10 values – six co-operative and four
ethical. The co-operative values – self-help,
self-responsibility, democracy, equality, equity,
solidarity – describe the design of the business.
The ethical values – honesty, openness, social
responsibility, caring for others – describe its
operation.
Alongside these are seven principles – three on
how co-op ownership should be structured, three
on co-op culture and one on the independence of
the business as a democratic enterprise. As Sion
Whellens of Calverts Worker Co-op says, while
the structure and independence of ownership
makes you a co-op, it is your commitment to
co-operative culture that makes you part of the
wider co-op movement.
The evolution of the values is in itself a
fascinating example of deliberation within a
social movement. The list emerged from an
extensive global dialogue, with around 10,000
meetings around the world. One of the key
figures involved in that process, Professor Ian
MacPherson, said the list “does not induce
tidy uniformity… the application of ‘honesty’
can vary across different cultures and kinds of
co-operatives. Openness depends as much on
social relations within a given society and the
management culture of a given co-operative
as it does on generally accepted accounting
standards. The point is that values, while they
can have some similar characteristics around the
world, also vary greatly in kinds of understanding
and ways of being expressed.”
Academic research on values tends to support
this. The European and World Values Survey
draws on a framework applicable to every culture
around the world, even if every culture will have
its own very different emphasis and inflections.
The co-operative components of these surveys
are what Co-operatives UK has used in widely
cited work to track public attitudes in relation to
co-operative values.
Of course, co-ops come in all shapes
and sizes, and this is also true for what they
do in terms of values. The research centre
EURICSE interviewed opinion leaders in
the sector in 2013. They said that, while
co-ops worldwide tend to be strict on their
structure, they are looser in terms of culture.
Many fail to fulfil at least one of the seven cooperative
principles – the least complied with
being the commitment to education, training
and information.
So, to explore this, Co-operatives UK set out
to research two dozen co-operatives worldwide.
Each one does communicate values of some
kind. The global value most commonly promoted
is ‘social responsibility’, followed by reference to
democracy and then openness. The least cited
were self-help, solidarity and caring for others.
The impact of the co-operative sector having
a global set of values is hard to test, but there is
some evidence to suggest that businesses with
distinctive values may act in distinctive ways.
The global values offer a prompt, or default,
for co-ops that can be a reference point for its
members. In France, co-ops are now required
to conduct an independent audit for members
at least once every five years to assess their
co-operative difference.
In many countries, ethical values are core to
the brand values of co-ops. Ethical Consumer
magazine, which draws on an extensive
database of ethical screening, states that cooperative
businesses are in the top third of
ethical performers in 80% of the markets that
they surveyed, and are the top performers in
23% of markets.
Co-operatives UK has championed the role
of values and culture across the UK economy.
A recent and notable success has been the
introduction of values and purpose by the
Financial Reporting Council into the new
governance code for all listed businesses. Of
course, it is easy to proclaim values but do little
to live up to them or to set an ethical purpose
and use it only for marketing, and arguably many
corporates do this, but the move will put more
scrutiny on those companies and it helps to point
to co-ops as best practice.
A World Values Day has been established,
with our input, and takes place this year on 18
October 2018: worldvaluesday.com.
BY ED MAYO
SECRETARY GENERAL,
CO-OPERATIVES UK
SEPTEMBER 2018 | 39

HOW DOES CRÉDIT AGRICOLE
STAY LOCAL WHILE OPERATING
MULTINATIONALLY?
BY ANCA VOINEA
INTERNATIONAL
EDITOR
With a 23.3% market share of French household
deposits and total assets of €1.72tn, Crédit
Agricole is France’s second largest bank.
Perhaps less known is the fact that the bank is a
co-operative. Through a network of local
credit co-operatives and a number of
subsidiaries, in France and abroad, it provides
retail, corporate, insurance, and investment
banking services.
We spoke to Pascal Delheure, deputy general
director of Crédit Agricole’s national federation,
to learn how the group has sought to stay
loyal to its co-operative roots while remaining
competitive in a tough market.
“Crédit Agricole was born out of the need for
finance within the agricultural sector,” he says. “It
developed locally, based on geographical
proximity and the will of the people to empower
each other and create solidarity among
themselves to finance agriculture.”
The bank emerged at a time when the
agricultural sector struggled to find affordable
credit. In 1884, France passed an act allowing
freedom of association, breaking the Jacobin
centralised tradition. On 5 November 1894,
members of farm unions were authorised to set
up Crédit Agricole’s local banks.
“Our values have always been community,
responsibility and solidarity. They have
not changed but the world has,” said
Mr Delheure.
The value of community is twofold, bringing a
geographical presence in local communities and
‘OUR VALUES HAVE ALWAYS
BEEN COMMUNITY,
RESPONSIBILITY AND
SOLIDARITY. THEY HAVE
NOT CHANGED BUT THE
WORLD HAS’
fostering relationships with people who lived in
them. With 39 regional banks, 27 million retail
customers in France, Crédit Agricole serves a
wide range of customers, including farmers.
Mr Delheure says the bank still strives to
support people and help them develop,
something determined by its values of
responsibility and solidarity. It has helped the
agricultural sector during multiple crises as well
as helping it keep up with the rapid changes
of modern society. This includes developing
financial tools to help people deal with issues
such as job losses or restructuring.
“The three values are still current. Combining
our three values is our raison d’être. We are still
serving a purpose,” he said.
Looking at the wider picture, confidence of
customers in the banking sector is falling but Mr
Delheure says the image of Crédit Agricole has
“not been deeply affected by the financial crisis
in the USA”.
“This is due to the financialisation of credit and
the way in which finance is given in the Anglo-
Saxon states, which is different from how things
are done in the French banking system,” he says.
“Credit co-operatives are not speculative banks,
they collect money. Our co-operative model
ensures there is a real benefit for members who
are also represented in governance structures.”
Due to its approach and local roots, Crédit
Agricole has not suffered to the same extent as
regular banks during the crisis, nor did it require
a state bailout.
“We are a group of 39 banks, which function on
a decentralised, co-operative model,” says Mr
Delheure. “Executive management is separated
from the board of directors, which is made up of
member representatives of the local territories.
This makes it safer and more responsible than
banks with independent directors.”
Since 2003, Crédit Agricole has had an ethical
policy, developed to ensure common standards
across its institutions.
The Crédit Agricole Group includes a network
of regional co-operative banks and Credit
Agricole SA, a national structure whose business
lines provide a wide range of solutions to the
local network. The regional banks own 54% of
40 | SEPTEMBER 2018

Crédit Agricole SA. This hybrid model enables
it to raise capital.
“We thought that it was important to have an
ethical policy for our organisation. In response to
the 2008 crisis, we wanted to show our identity
and social responsibility,” says Mr Delheure,
adding that Crédit Agricole does not sell its
members’ data. Similarly, the bank chose not to
operate in countries that do not exchange fiscal
information to avoid tax evasion.
Figures published on 3 August revealed that
Crédit Agricole’s second-quarter net profit had
grown 6.4% to €1.44bn (£1.28bn). The bank is
the world’s largest co-operative by turnover,
according to the World Co-operative Monitor.
“It is not something we necessarily pride
ourselves on,” says Mr Delheure. “What is
important for us is distinguishing what that says
about us – that we are a co-operative bank.
Our governance system is our great strength
and we defend this. The one member/one vote
principle; our local presence and representing
our members determine our way of working.”
He adds: “If we do not perform well as a bank,
that does not mean anything for the customer.
Our mutualist nature determines our approach
and behaviour. It guides our actions. For
example, we are open to all clients, we do not
choose them, and we enable them to fulfil their
projects and achieve what they want in life. We
do not have clients who choose us because we
are a mutual bank.
“Being a mutual bank is about maintaining our
presence at local and rural level. Our proximity
enables us to do so. We have a strong position
and we create connections at local level. In a
world where everything is going global, our
model is local, but it benefits from a local
presence.”
To support rural areas, Crédit Agricole
developed a network of start-ups across 25
villages, connecting aspiring entrepreneurs with
established enterprises. The bank now plans to
roll out the initiative to other countries.
“We create wealth within the territory and we
stay there,” adds Mr Delheure.
Through its network of 39 regional banks, the
co-operative ensures that decisions are taken
at local level, rather than in Paris, he says. “We
didn’t restructure around the great regions, we
have stayed local for the client, this is what it
means being a mutual bank.”
Regional banks can also experiment with
providing new services. If these are successful,
they can be implemented in other territories, as
well as nationally.
Does the growing importance of digital
services pose a threat to its model? Mr Delheure
says Crédit Agricole gives clients a range of
digital services while focusing on one-to-one
advice and support in its branches.
Last November, it introduced a low-cost
online banking service. The EKO service, created
to address competition from fintechs and
other online financial providers, will provide an
account, debit card, mobile app and access to
local branches for €2 a month.
The bank hopes the app will help customers
improve their budgeting by sending alerts when
their account balance is below €20, if they don’t
have an authorised overdraft. They will also gain
access to other services offered by the bank,
such as credit, insurance or saving.
“As a co-operative bank, we have a specific
governance model and decentralised approach,
but also just because we are a co-operative bank,
it does not mean clients will come to us. We need
to maintain our local presence, have confidence
in ourselves and provide excellent services.”
“Our ambition is being more than a bank. It is
in our DNA. Crédit Agricole was set up in France
due to a need for solidarity and autonomy, just
like other credit co-operatives were set up in
Europe around the same time. There is still a
need for values. Our model is bottom-up, from
local to global.”
Just like Crédit Agricole itself, Mr Delheure
feels very connected to his local roots. He joined
Crédit Agricole’s local network in Aveyron in
1984, and has been with the mutual ever since. “I
am Aveyronnais, French, European and a global
citizen, in this order,” he says.
SEPTEMBER 2018 | 41

CASE STUDY:
HOW DOES MIDCOUNTIES MAINTAIN
ITS CO-OP VALUES AS IT GROWS?
u MIDCOUNTIES
COLLEAGUES AT THE
SOCIETY’S AGM
The Midcounties Co-operative was recently
voted Leading Co-op of the Year 2018. This
award, given to the society for the third time, is
presented by Co-operatives UK for co-ops with
a turnover above £30m, and is voted for by the
UK public.
“This honour reflects the society’s ongoing
commitment to its members, colleagues and
the communities it serves,” says Mike Pickering,
Midcounties’ community and sustainability
manager. “The society has strong and consistent
core values – known to colleagues as the ‘DOES’
values. DOES stands for Democracy, Openness,
Equality and Social Responsibility, and reflects
the ICA Co-operative values in an easy-toremember
format.”
These values are introduced to all new
colleagues on their first day, as part of the
induction process – and have been a vital part
of ensuring co-operation stays at the heart of
the organisation as it has grown to become the
largest independent co-op in the UK.
Midcounties’ roots go back to 1853 when the
Swindon Society was founded. By the end of
the 19th century, it was neighboured by dozens
of other co-op societies, which merged over
the years until there were just two – Oxford,
Swindon and Gloucester Co-op (OSG) and West
Midlands Co-op. These came together to form
Midcounties in 2005.
Today, the society has over 667,000 members,
539 sites, and 8,500 colleagues working for a
wide range of businesses including Food, Travel,
Healthcare, Funeral, Childcare, Post Offices
and Energy. It has recently broadened its utility
offering following the recent merger with the
Phone Co-op. Its gross sales for 2017-18 were
£1.48bn.
“The Society has stayed true to its roots as
it has grown by having strong and consistent
‘THE SOCIETY HAS STAYED
TRUE TO ITS ROOTS AS IT HAS
GROWN BY HAVING STRONG
AND CONSISTENT VALUES’
values, encompassed by our ‘Blueprint for the
Future’,” says Mr Pickering. “The Blueprint
consolidates our core DOES values and includes
an ‘Imagined Future’ to inspire activity and guide
everything we do.”
Midcounties’ management ensures that
the Blueprint for the Future is reflected in all
aspects of business planning, and present back
to the board on an annual basis on how all its
businesses are doing against co-op values.
Mr Pickering adds that the consistency of
language used among colleagues to talk about
the values “is key”, as is the reinforcement of
these values with the regular reporting of both
financial and non-financial measures.
The Society has created a ‘steering wheel’
model, to enable consistent monitoring across
the key areas of co-operation, people, customers
and delivery. “Each section has a number of
objectives, monitored on a monthly basis; they
are coloured red, amber or green to indicate
whether they are below target, nearly on target,
on or above target,” says Mr Pickering.
“All our sites have their own steering wheel
targets which ensures the Society is addressing
its co-operative aims as a business on a
continuous basis.”
He believes that having the core DOES values,
a Blueprint for the Future and its steering
wheel in place has helped Midcounties grow
significantly while staying true to its roots. As
well as the Leading Co-op of the Year award, the
society also received recognition in 2018 with a
5 star rating in the Business in the Community
Corporate Responsibility Index, while in 2015 it
was awarded the Queens Award for Enterprise in
Sustainable Development.
42 | SEPTEMBER 2018

THE CO-OP COMPASS
A CO-OPERATIVE METHODOLOGY FOR
REVIEWING OUTCOMES AND PERFORMANCE
BY GILL GARDNER
SECRETARY OF THE
CO-OP GROUP’S
NATIONAL MEMBERS’
COUNCIL
The National Members’ Council of the
Co-op Group is a unique body among UK co-ops.
It is a key element of the Group’s new governance
structure and processes, now bedded in, which
together ensure that democratic member
control remains strong.
After it was formed, the council’s elected
members, led by its president Nick Crofts, began
to consider the best way it could collectively
effectively ‘hold the board to account’ and act as
‘the guardian of the ICA values and principles’.
These responsibilities are set out in the
rules – but without any guidance as to how this
should be done. A unique solution was needed.
The objective was to create an effective
framework which would prioritise those issues of
fundamental concern to members.
Throughout 2016, working very closely with
Co-operatives UK – whose expertise was
instrumental – four clear themes were identified
as the lenses through which the performance
indicators would be determined.
These are:
• Member Value
• Member Voice
• Ethical and Sustainable Leadership
• Co-operative Leadership.
As there are four of them, we pictured them
as quadrants – and therefore called it ‘the
Co-op Compass’.
All co-operative values and principles were
taken into account so the golden thread
running through all of the four themes and their
KPIs is co-operative difference.
‘IT’S BEEN HEARTENING THAT
THE IDEAS THAT EMERGED
FROM THE COMPASS HAVE
QUICKLY RESONATED WITH
A VARIETY OF AUDIENCES.’
MEMBER VALUE
It’s vital that any co-op remains commercially
strong, particularly when facing a very
competitive and testing economic environment.
The Member Value theme looks at the value
for members financially and also socially
to ensure the society is meeting members’
needs. Reviewing the balance sheet and
underlying profit is the core catalyst for further
discussion with the board. We also monitor
the member benefit derived from the 5+1
reward and member experience.
MEMBER VOICE
The council has a responsibility to represent and
promote the interests of members; it is tasked
with being the voice for the various constituencies
(geographically and also independent society
constituencies). We’re working hard on being
more visible and active on social media after
council meetings about what has been going on.
Member voice also reflects what the society
as a whole is doing to involve our membership
in democracy and participation more generally.
The Compass reports on voting statistics as
well as engagement in the allocation of local
community funds. The Compass includes a
brand tracker so that the council can reflect
and challenge on co-op perception among its
members and shoppers.
We also review the number of active trading
members, which has increased from 4 million
on 31 December 2016 to 4.6 million as of 6
January 2018.
ETHICAL AND SUSTAINABLE LEADERSHIP
The council has adopted KPIs under this theme
to open discussion between the council and
board on the Group’s ambition on ethical and
sustainability targets. The council has a role
to act as the guardian of co-operative values
and principles. Through the Co-op Way Policy
Committee, council members were involved
in the consideration of nine policy position
statements, including an overarching statement
setting out our society’s business ethics and
44 | SEPTEMBER 2018

ehaviours. Having understood the ambition, the
council will review through the Co-op Compass
how these ethical policies are embedded.
The council also has a role to review and
comment on the society’s sustainability plan. This
area of the Co-op Compass will be developed to
reflect the Group’s ambition.
CO-OPERATIVE LEADERSHIP
The council is a champion of Principle 6 and
is keen for the society to play an active role in
the national and international co-operative
conversation. The Co-op Compass currently
monitors our colleague engagement and also
the value of trade with other co-operatives.
Further KPIs are to be developed within this
theme but success will be a broad recognition
of the society’s participation and connection in
the co-operative movement, whether through
campaigning, trading, or other means of support.
The Compass identified some measurements
for those aspects of performance and
governance which are at the heart of
co-operation. They have allowed the council to
prioritise those areas which are key to members.
It’s been heartening that the ideas that emerged
from the Compass have quickly resonated
with a variety of audiences. The Compass is
simple to understand, but at the same time
operates on many levels, providing focus and
flexibility in how it can be applied. It has created
a common language to link co-operative
difference and Values and Principles with
business strategy and performance – and
distinguish the co-op difference.
The development of the Compass drew on
learning from many co-ops. In this spirit of shared
learning, with agreement, the core concept
and design (excluding the specific KPI’s) were
shared with Co-operatives UK’s Co-operative
Performance Committee (CPC) and Governance
Forum, linking to other work being developed.
Co-operatives UK’s recently published Narrative
Reporting: A Framework and guidance for
co-operatives developed by the CPC drew on
the Compass’s work as part of its own review of
best practice.
The council recognises that after successful
rebranding, the re-launch of the member
proposition, and major re-investment, the
forward plan under the banner of ‘Stronger
Co-op Stronger Communities’ will be our
ambition in the years ahead. Great progress has
been made and the council is so pleased we’re
on the front foot again on campaigning.
‘“STRONGER CO-OP
STRONGER COMMUNITIES”
WILL BE OUR AMBITION IN
THE YEARS AHEAD.’
THE COUNCIL
DISCUSSES MEMBER
VALUE WITH
GROUP DIRECTOR
STEVIE SPRING
SEPTEMBER 2018 | 45

CO-OP BANKS IN CRISIS:
YOU CAN’T PUT A PRICE ON VALUES
BY PAUL GOSLING
WRITER, PUBLIC
SPEAKER,
BROADCASTER
& RESEARCHER
THE SWISS
SUBSIDIARY OF
RAIFFEISEN, AN
AUSTRIAN CO-OP
BANKING GROUP,
HAS ALSO HIT
PROBLEMS
CO-OPERATIVE BANKING
“The Co-operative Bank has largely avoided
the consequences of the market turmoil.
Our cautious and responsible approach to
business development limited our exposure
to the problems that have afflicted many in the
sector.” Those words by the then chief executive,
David Anderson, of The Co-operative Bank still
reverberate a decade on – they were written for
the Bank’s 2008 financial results. The Co-op’s
executives and non-executives were chortling at
their competitors’ misfortune, complacent about
their own vulnerability.
Sadly, the triple sins of over-reach, lack
of internal challenge and flawed structure
of accountability that did for the UK’s
Co-op Bank, have hit many other ambitious
co-operative banks across Europe.
Raiffeisen is an Austrian-based co-operative
banking group, with a history that dates back to
the 19th Century. It was one of Europe’s largest
banking operations, with subsidiaries across
central and eastern Europe. It hit problems that
had similarities to the crisis that ended the status
of the Co-operative Bank as a subsidiary of the
Co-operative Group.
An investigation by the Swiss banking regulator
FINMA of the Raiffeisen Schweiz subsidiary cast
doubt on the future of its co-operative structure.
“FINMA identified various control issues and
problems, including significant shortfalls in the
group’s overall corporate governance practices
related to the management of shareholdings
and related persons,” said a report by Moody’s
credit ratings agency.
“Raiffeisen Schweiz failed to effectively oversee
and control its own management and mitigate
potential conflicts of interest arising from the
management’s and the supervisory board’s
involvement in day-to-day decision making. This
led to breaches of several supervisory laws and
best practices.”
Failings included inadequate risk management
around loans to individuals connected to the
bank and a miscalculation of the capital held by
the bank.
The probe by FINMA led to former chief
executive Pierin Vincenz being placed under
investigation for mismanagement, accused
of generating personal financial gain at the
expense of the bank. He denies the allegation,
but spent 15 weeks in jail being investigated.
Vincenz’s replacement as chief executive and
former deputy, Patrik Gisel, recently announced
that he will leave the bank, to help clear the way
for a new start. Raiffeisen stressed that Gisel’s
“integrity is not in doubt”.
Raiffeisen’s crisis led FINMA to question
whether it was appropriate for banks to be
structured as co-operatives. As part of FINMA’s
ongoing response, it will consider “the pros and
cons of converting Raiffeisen Switzerland into
a limited company”. Should FINMA conclude
that public companies are a better structure for
banks, there would be significant repercussions
across Europe – Moody’s calculates that
co-operative banks have market shares of around
50% in Germany, 50% in France and almost 30%
in the Netherlands.
The Financial Times quotes Moody’s as saying
there is no evidence that co-operative banks have
weaker control and risk management practices
than do joint stock companies. However, if there
is a problem, co-operatives obviously have
substantial difficulty in obtaining new risk capital
without demutualising.
For the moment at least, Raiffeisen Schweiz
and the Raiffeisen Group remain co-operative
institutions. The same is not true for the Cyprus
Co-operative Bank, which failed because nearly
60% of its loan book was non-performing, and
which was accused of poor corporate governance.
46 | SEPTEMBER 2018

It was split into two, with the good assets sold
to the Hellenic Bank and non-performing assets
converted into a special purpose vehicle with the
objective of maximising debt recovery.
An official investigation will consider the
causes of the Cypriot bank’s failures. Factors may
include, say observers, poor lending practices,
staffing weaknesses, lack of internal challenge
and inadequate regulatory oversight. But
another factor has been poor ethical behaviour,
with the bank improperly overcharging on loans
by applying the wrong interest rate. This not only
led to a fine, but also undermined the capacity of
borrowers to repay their loans.
Across these failures, some themes recur.
Each of the three co-operative banks – Cyprus,
Raiffeisen and the UK’s Co-op Bank – were
damaged by poor corporate governance,
which led to poor quality decision-making.
Accountability mechanisms were defective. In
the case of Raiffeisen and Cyprus, this allowed
borrowers who were close to the banks to be
better treated in terms of loans and loan terms.
This was also true of the Irish Nationwide Building
Society, which was structured as a mutual, but
treated by its senior management and board
almost as if it were a private company.
In all four of these cases, there were substantial
regulatory failings. With the Irish Nationwide
Building Society, even a cursory examination
of its internal practices would have found
catastrophically weak corporate governance
and serious breaches of its own procedures. In
the case of The Co-operative Bank, regulators
regarded its merger with the Britannia Building
Society – the most significant factor in the failure
of the bank – as having been a rescue of the
society. Yet the Co-op Bank’s directors were
not told of this judgement and the regulators
approved the chief executive of the rescued
institution to become chief executive of the
enlarged Co-op Bank.
Yet it would be wrong to conclude that these
failings are specifically attributable to the
co-operative structures. RBS failed because of
the combination of over-reach, weak corporate
governance, lack of accountability and poor
regulatory oversight – an identical set of factors
to that behind the Co-op Bank’s failure. The
same is true for the Anglo-Irish Bank, whose
failure was very similar to that of the Irish
Nationwide Building Society. And the demise
of the Halifax Building Society was related to its
demutualisation and subsequent over-reach.
But nor would it be true that the failings are
simply the result of financial institutions getting
too big. The Kent Reliance Building Society was
‘SWISS REGULATORS ARE
NOW ASKING IF IT IS EVEN
APPROPRIATE FOR BANKS TO
TAKE A CO-OP STRUCTURE’
small and had a reputation for innovation and
excellence. It suffered a crisis related to getting
too big, too quickly, without a sufficiently large
capital base. Meanwhile, a number of credit
unions in Ireland have failed, some because their
loans were secured on properties that declined
substantially in value. Others are in crisis because
of serious failings in corporate governance,
which in some instances enabled fraud.
Despite this variation in the character
of these institutions, it is nevertheless possible
to find common lessons. Weak structures of
accountability are connected to the corporate
governance failings. In
some instances, this
was also the result of
behaviour by excessively
strong chief executives
dominating boards
containing individuals
who can be short of selfconfidence,
knowledge
and specialist training.
A lack of judgement
and proportionality is
another common failing
– seeking scale of operation at all cost and at
substantial risk. In this, boards and executives fail
to differentiate between genuine organic growth
and ever increasing financial numbers that in
reality just reflect an unsustainable bubble.
Another common weakness – which can
certainly be associated with becoming a big
organisation – is losing sight of ethical values.
That both the UK and Cypriot co-op banks
were fined for mis-selling (PPI in the case of the
UK and excessive interest rates in Cyprus) says a
lot for what went wrong in those institutions.
In short, size is not what brings down large
co-operative banks – it is failing to act like
co-operatives.
Paul Gosling is the author of The Fall of the
Ethical Bank, which is out now. More details
at thenews.coop/falloftheethicalbank.
THE UK’S CO-OP
BANK IS NOW
OWNED BY HEDGE
FUNDS
SEPTEMBER 2018 | 47

REVIEWS
Humans may have values – but how do we act on them?
Values and
Behavior: Taking
A Cross Cultural
Perspective,
ed. Sonia
Roccas and
Lilach Sagiv
(Springer
International,
2017) £87.50
This fascinating collection takes at how values affect
human behaviour, with the writers taking a cultural
perspective to examine the link between principles
and action.
Values are important – not least to the co-op
movement, which has developed its own, central
to its identity. But a key question, crucial to this
analysis, is the definition of “value”. Here, the
writers define them as cognitive representations of
basic motivations. Values “are inherently positive,
they represent desirable goals and reflect what
people consider important and worthy,” they argue.
The book goes on to examine social psychologist
Shalom H. Schwartz’s theory of personal values,
which suggested that values differ in the type of
motivational goal they express. But the authors also
consider previous studies,
taking in more than 20
years of research on
the topic. And it argues
that values transcend
specific circumstances.
Giving examples
of existing literature,
they explain that
a person who views
concern for others as
an important value in
the work context is also
likely to attribute high
importance to this value
in other social contexts.
People also see their own
values as more desirable
and closer to their
ideal self than their
personality traits.
Co-Utility –
Theory and
Applications,
Josep Domingo-
Ferrer and David
Sánchez (Springer
International
2018) £119.99
Finding co-operation’s selfish gene
Co-utility takes a novel look at ideas of mutually
beneficial collaboration, asking where selfish
behaviour might fit into such systems.
The book argues that protocols based on mutually
beneficial co-operation can improve social welfare.
It describes the concept of co-utility as a framework
for co-operation between rational agents so that
they help each other achieve their best outcomes.
Domingo-Ferrer and Sánchez give the examples
of peer-to-peer networks for sharing of distributed
resources or virtual money as incentives to achieve
self-enforcing collaboration.
The book provides an overview of existing game
theory, looking at sequential moves – where, at the
time of choosing a move, previous moves made by
other agents are known. In a perfect-information
game, the agent who is about to make the move has
complete knowledge of the previous moves made
by other agents.
Co-utility is reminiscent of co-operative game
theory. But this model is based on the assumption
that each agent acts autonomously and keeps to
themselves the payoff they get, rather than dividing
it among the agents of a coalition, as happens in
co-operative games.
Where could this model be applied? Imagine
web search engines that are based on a co-utility
protocol for exchanging queries between users. In
the collaborative economy, such a protocol could
help to introduce artificial incentives like distributed
reputation or quality of service. Reputation
management would also need to be designed
to be co-utile.
A file-sharing system only works if agents share
files, rather than simply downloading other agents’
files. But by incorporating rewards in the form of
artificial utility, such as reputation, the problem can
be tackled.
The authors add that co-utility principles can
help to design a mechanism which ensures that
helping others is the best rational option, even for
selfish players.
48 | SEPTEMBER 2018

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Organic. Feed Your Happy campaign
financed with aid from the
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For more information visit www.goorganicfestival.co.uk

DIARY
FROM LEFT: Steve Reed MP speaks at
the CCIN Conference on 4 Oct; The Co-op
Group visits24 towns and cities across
the UK from Sep-Nov; and the theme for
International Credit Union Day 2018 is
‘Find Your Platinum Lining’
5 Sep: Joint Regional Co-op Council
meeting
Hosted by Co-ops East Midlands with
Co-ops East, Co-ops West and
stakeholders, this event takes place
at the Central England Co-op Ambient
Distribution Centre, Leicester, to explore
innovative ways to promote the
co-operative sector regionally.
WHERE: Leicester
INFO: cooperatives-em.coop/events
Sep-Nov Join In Live
This autumn the Co-op Group visits
24 towns and cities across the UK so
people can find out more about what
it is doing in their local community.
WHERE: UK-wide
INFO: co-operative.coop/JoinInLive
27 Sep: Social Business Wales
Conference 2018
A free annual conference to support
local businesses with aspirations to
grow and be more sustainable. Speakers
include Dai Powell (HCT Group), Guy
Singh-Watson (founder, Riverford Organic
Farmers) and Ken Skates (economy
secretary for Wales).
WHERE: City Hall, Cardiff
INFO: wales.coop/sbwc2018
4 Oct: Co-operative Councils’ Innovation
Network Annual Conference
A chance to hear how co-operative
councils from across the country are
working with local people to build
strong and resilient neighbourhoods.
Including a keynote from Steve Reed,
MP – honorary president of the CCIN
and shadow minister (digital, culture,
media and sport).
WHERE: Croydon
INFO: ccin2018.eventbrite.co.uk
12-14 Oct: Co-operative Party Conference
A weekend of inspiring stories, practical
ideas and skills you can use to begin
transforming your communities,
unleashing the power of ideas to build a
fairer, stronger Britain.
WHERE: Mercure Bristol Grand Hotel
INFO: s.coop/cooppartyconf18
18 Oct: International Credit Union Day
The day is recognised to reflect upon
the credit union movement’s history,
promote its achievements, recognise
the hard work and share member
experiences. The 2018 theme is ‘Find
Your Platinum Lining’.
INFO: woccu.org/events_and_
engagement/icuday
25 -28 Oct: Social Cooperative
International School
#SCIS2018 consists of three thematic
sessions and one international seminar.
Each thematic session consists of a
theoretic introduction on the topic,
the presentation of best practices and
a workshop to deepen the participants’
knowledge on different aspects of
social co-operative and social
enterprise activities.
WHERE: Hotel Royal Continental, Naples
INFO: s.coop/2ai3t
2-4 Nov: NASCO’s 50th Anniversary
Education and Training Institute
Over 400 participants will converge on
Ann Arbor, Michigan, to share ideas,
learn new skills, and look at issues
affecting the global co-op movement.
WHERE: Ann Arbor, Michigan
INFO: s.coop/asco50th
7-8 Nov: Locality Convention
Join hundreds of inspiring members,
partners and people working in the
community, voluntary and social
enterprise sectors to unlock the power
of community.
WHERE: Bristol Marriott City Centre
INFO: locality.org.uk/events/convention/
22 Nov: Co-operatives UK
Practitioners Forum
The Practitioners Forum offers
professional training for people operating
in key roles in co-operative businesses
large and small. This one-day event,
organised by Co-operatives UK, is made
up of a series of specialist forums:
communications; finance; governance;
HR; and membership.
WHERE: The Studio, Manchester
INFO: s.coop/29xlr
50 | SEPTEMBER 2018

#SBWConf18
#SBWConf17
Sarah Dickins
Alan Mahon
Dai Powell
Jo Wolfe
Guy Singh-Watson Ken Skates
Ken Skates AM Derek Walker
Keynote Host: speakers include:
Alan Sarah Mahon, Dickins, Co-founder, BBC Cymru Brewgooder Wales Economic
Jo Correspondent
Wolfe, Managing Director, Reason Digital
Ken Skates AM, Economy Secretary for Wales
Keynote speakers:
Derek Walker, Chief Executive, Wales Co-operative Centre
Dai Powell, CEO, HCT Group
Guy Singh-Watson, Founder, Riverford Organic Farmers
Topics
Ken Skates
to
AM,
be
Economy
covered
Secretary
include:
for Wales
• Future of finance
Topics to be covered include:
• Public sector procurement
• Digital transformation
• Getting contracts into communities
•• Leadership Risk management and succession
•• Developing new technology productsfor growth
•• Agile Engaging project the management
leaders of the future
• Innovative fundraising
•
•
Power
Measuring
of PR
social impact
•• Opportunities Using Welsh language for growth to generate commercial value
Social Business Wales
Conference 2017 2018
Supporting social businesses with aspirations
to grow and be more sustainable
Llangollen City Hall, Cardiff Pavilion, Denbighshire
Thursday 5th 27th October, September, 9:30am 9.30am-4.30pm
- 4.00pm
This free national conference will provide an environment
for knowledge exchange, sharing best practice and
networking within the sector; encourage innovation;
and provide opportunities to learn from and build
partnerships with the private and public sector.
To register for your free place, visit:
bit.ly/sbwconference2017
wales.coop/sbwconf2018

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