People power on the rise as history repeats itself

There I was, trundling along in the car the other day when an interview on Radio National pricked my interest.

There was this chap chatting to Fran Kelly about co-operatives as a modern – and paradoxically, a rather old – answer to the growing trend of governments and businesses exiting from certain services.

He was saying citizens are increasingly coming together to take ownership of the problem or challenge and to do something for themselves.

And he should know, his people power story is wholly heartening, especially as it’s a view I share…and I’m always intrigued when history repeats itself!

This guy lives on the outskirts of Canberra, where GP practices were closing one by one, leaving the community with few medical services. He called the community together and after much gnashing of teeth they decided to create a co-operative medical centre.

They raised the necessary funds and soon employed their first doctor. It wasn’t long before more followed and today it’s a thriving practice of 32 happy doctors and an equally happy community, probably getting better medical attention than ever before.

Co-operatives – or mutual organisations – you may remember, were very much in vogue when people of my generation were growing up. There was the credit union, the building society, the agricultural co-op, to name a few. And while they straddled many sectors, they had one thing in common – they comprised groups of people with similar interests who bandied together to create an entity that benefitted all of them as a group, usually when these services were not being provided by others.

The members are effectively the owners. And when profits are made, they’re not distributed among members but channelled back into the organisation to make it stronger.

Whereas the business philosophy is to provide goods and services to make a profit, co-ops believe they ‘profit to provide goods and services’.

Profit, though, often turned out to be their own worst enemy as they became so successful that they were either taken over and commercialised or they themselves decided to demutualise and become commercial, often listed, companies.

So what has all of this to do with governance, you might ask?

Well, as people power gains momentum and we anticipate a new wave of co-ops, it’s sobering to remember that they were not all raging successes. A good number failed – and mostly for the same reason.

They fell short on governance, and these failures could be solved through three key remedies.

A more balanced representation of stakeholders in the governing body would have had a significantly positive effect, as would higher levels of expertise among those governing body members, something easily addressed through training or the use of independent trustees.

And finally, implementing a code of conduct that addresses, among others, conflicts of interest, would have spared many a failed co-op countless headaches and the ignominy of failure.

These three simple steps will go a long way to ensure history doesn’t repeat itself in the failure department!

Until next time,
Kate.

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