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Cooperatives are special enterprises created by and for their members. They share common values, united under the seven principles of the International Co-operative Alliance. Their functioning and their governance, considered democratic, differ from conventional private companies. Agricultural cooperatives share this same cooperative DNA, but they are rarely interested in the question of the participation of their employees in governance bodies. However, academic research and recent developments in French law highlight the need and the interest of welcoming directors representing employees at the heart of governance.
Agricultural cooperatives late
In terms of employee representation, France seems less advanced than other countries that have imposed a joint composition of governance bodies of commercial companies (so-called co-determination regime where half of the supervisory boards are composed of employee representatives).
The German model is thus regularly quoted, especially since research has shown that this representation of employees has rather a positive effect in companies across the Rhine. In France, the representation of employees on boards of directors or supervisory boards has gradually increased since the 2000s. A series of recent laws (2006, 2013, 2015, 2018) has notably lowered the minimum thresholds for triggering this compulsory representation. Can agricultural co-operatives, which have nothing to envy in terms of size or activities of large capitalist enterprises, stay away from this movement of substance longer?
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Involve employees in corporate governance: ideas and perspectives
An issue that is debating
The presence of employees in the governance of agricultural cooperatives, however, presents as many arguments in its favor as it does not. On the positive side, the presence of employees may seem justified because employees are often presented as one of the main levers of value creation. Some studies also note that their presence helps to improve the quality of debates and decisions taken at board meetings because they have the capacity to show tangible evidence about the strategies being considered or implemented.
However, the presence of employees is not natural in agricultural cooperatives whose governance is based on the association, more or less harmonious, representatives of farmers and leaders (employees). This classic tandem could be disturbed by the arrival of a third category of "rulers". In addition, the presence of employees could be perceived as less legitimate than that of farmers for example, because they are very engaged in the cooperative by being both suppliers, customers and usufructuaries.
It is this specificity in terms of governance that would explain why agricultural cooperatives have stayed away from the main changes in practices observed in private companies. However, the representation of employees remains possible. Some cooperatives have in fact modified their statutes in order to open a section of non-cooperative partners for their salaried employees. This is the case for Limagrain, Terrena, Triskalia and Acolyance, which have one to two salaried directors on their boards. In these cooperatives, like farmers, they must hold shares, which gives them the opportunity to be heard and possibly represented in council. Other foreign cooperatives, such as the Danish company Arla, have also implemented similar governance schemes with councils involving cooperating farmers and employee representatives.
Employees on the board: proposals and potential effects
Opening the governance of agricultural cooperatives to employees is a way of thinking that could prove beneficial. The work of economist Margaret Blair identifies four key aspects of the expected effects of this participation:
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The presence of employees would significantly strengthen the common identity around a shared enterprise project. A very important part of the value created by cooperatives comes from their employees and associating them with governance would make it possible to bring together farmers and employees around the same strategic project.
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Their presence improves the potential implementation of strategic decisions because they know better than the farmers the everyday life of the company. They can provide valuable information and analysis for administrators to make decisions.
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Their presence increases the portfolio of skills available to the board. One naturally thinks of the competence "social dialogue", but also to their fine and intimate knowledge of the workings of the organization in matters of finance or marketing. Elements that farmers do not necessarily have, and sometimes the leaders themselves.
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The presence of employees finally makes it possible to build and develop a culture of information transparency, which is itself one of the necessary ingredients for good governance. It helps to empower all the actors of the cooperative (members, elected officials, managers and employees).
However, this evolution, desirable on paper, forces cooperatives to meet several challenges. Should we limit the representation of employees to the only category of managers or engineers? One or more representative? What kind of representation in case of international activities (and employees from different countries)? Should they have specific training? What relations with the leaders present?
So many questions, now well identified and dealt with in the context of conventional enterprises that agricultural cooperatives still have to ask themselves. Especially since, as often, the devil of participation is nested in the details. In this respect, pioneering agricultural cooperatives can serve as precursory examples for other cooperatives that would like to open this site.
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