Corporate governance and management control systems in European co-operatives
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This document has been made available in electronic format
by the International Co-operative Alliance ICA
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November 1995
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CORPORATE GOVERNANCE AND MANAGEMENT CONTROL SYSTEMS
IN EUROPEAN CO-OPERATIVES
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GENERAL TRENDS, FINDINGS AND RECOMMENDATIONS
November 1995
Table of Contents
I. Reference and Working Procedures
II. Co-operative Objectives
III. Co-operatives and Membership
IV. Formal Democratic Structure
V. External Control (Auditing)
VI. Education and Information
VII. Financial Involvement
VIII.Findings and Recommendations
IX. Co-operatives in Eastern and Central Europe
Annexes
I. Reference and Working Procedures
*************************************
Since the beginning of 1994 the review of corporate governance
and management control systems in European co-operatives has
been a top priority within the work of the ICA Region Europe.
This topic came to the fore because more and more
co-operatives in different sectors and different parts of
Europe had experienced grave problems, which have threatened
the profile and identity of the whole co-operative system.
These problems include mismanagement, financial scandals, poor
management control, growing distance between members and their
co-operative society, failure of democracy and an unbalanced
relationship between management and elected lay directors.
Similar experiences appear to be common and therefore, for all
co-operatives, there are valuable lessons to be learned and
dangers to be avoided.
On behalf of the ICA European Council an in-depth study of the
problems mentioned above was made in 1994, with particular
respect to four co-operative sectors: consumer, agriculture,
banking, and housing. Similar findings may be true for other
co-operative sectors. The review was based on personal
interviews with around 45 key persons in several European
co-operatives. In addition various books, articles and
published research have been considered.
After having presented a detailed analysis of the specific
problems in the four sectors to the ICA European Council in
Seville in May, 1994, a second summarized report was
submitted to the Regional Assembly of the ICA Region Europe
in Prague in October 1994. This report was also published in
the Review of International Co-operation 3/94 providing
co-operatives in other parts of the world with the
opportunity to evaluate the findings and recommendations.
In order to discuss further some important aspects of the
Corporate Governance report a seminar was held on the 11th
July, 1995 in St. Petersburg. The lectures and discussions
focused on Governing Bodies, balance of power between elected
lay persons and management as well as on strengthening ties
with members (see Annex 1). Information about the findings
of the Governance project was given to the ICA Congress,
October 1995 in Manchester.
This final report can only touch upon the most important
trends and common problems and ends with some conclusions and
recommendations which have been discussed and agreed upon
during the presentations. It has not been possible to deal
with the specific differences that exist from society to
society. There are still a lot of societies in all sectors
which are operating successfully with good governance and
management control systems.
II. Co-operative Objectives
****************************
The main objective of co-operatives today, as in the past, is
to promote the interests of members. This was also
underlined by the statement on the Co-operative Identity
adopted on the ICA Congress in Manchester October 1995 (see
Annex 2). Additional objectives include: to safeguard the
right of consumers, to protect the environment, to work for
healthier products, to offer information and education and to
pursue social activities as a form of solidarity.
Without members there exist no co-operatives. Members are the
owners, goalsetters and users of their own organisation and
have in this context to safeguard good governance and
management control systems. That means in relation to their
jointly owned and democratically-controlled enterprise.
The members expect from their co-operatives good performance
including special benefits. This could be high selling
prices for agri-products, accommodation of a good standard
and at reasonable prices, comprehensive financial services,
low prices/quality products, special offers, discounts,
bonus-payments, dividends etc.
An efficient and profitable business operation is an absolute
precondition to reach the economically based targets for
member promotion.
III. Co-operatives and Membership
*********************************
Co-operatives and their central institutions have large market
shares within their respective fields of activities and
employ significant work forces. The overall figures include,
however, very different sizes, structures and development in
each European country. Planned expansion and profit goals
have not always been reached. In some countries co-operatives
have stagnated or failed with heavy losses e.g. consumer
co-ops, banks, agriculture co-ops.
With a membership of around 75 million, the four co-operative
sectors still hold a strong position within the West European
population. Continuous increases can be noted within the
housing co- operatives and co-operative banks in larger towns
and communities, whilst decreases can be observed within the
consumer and agricultural co-operatives.
The recruitment of new members has frequently been neglected
because of insufficient resources and information. Too often
the members have been regarded by management as a necessary
evil; as a hindrance for quick decisions and expansion. The
business transacted with non-members has grown considerably.
As a consequence, the interest and loyalty of members is
often very low. From their role as owners and goalsetters,
the members are changing to mere customers, interested in
immediate benefits from the society or elsewhere. The
co-operative profile has become blurred and interchangeable
with that of private competitors.
At present, however, there is evidence of some change. In
several co-operative organisations there is lively debate and
action programmes introduced to revitalize membership. It is
increasingly recognized that good economic performance is a
precondition to serving the members properly and also in
offering them special benefits.
In general, members of agricultural marketing societies and
housing co-operatives are far more interested in the economic
activities of their society than members in the consumer and
banking sector where many alternatives exist in the market
place.
Despite varying interests between the co-operative sectors, it
can be observed that the participation of members within the
formal democratic structure is low. The distance between
members and societies has grown, especially in large-scale
societies.
Some of the reasons are:
- poor performance, no benefits from the society.
- members do not know very much about the special
characteristics of co-operation in general, and about their
society specifically, due to lack of information, Management
is not really interested in membership.
- members do not feel at ease with the growing size and
complexity of the business operations.
- members do not want to take responsibility or offer their
spare time. They want to use the services and obtain the
economic benefits, but do not want any other involvement.
- genuine membership rights are transferred to delegates who
are often not known to the ordinary members.
- active members are disappointed about the real opportunity
for influencing and controlling the operations of the society
and consequently they resign from the Governing Bodies.
- rotation within elected delegates and members of the
Boardrooms is low, giving interested members very limited
chances to participate.
IV. Formal Democratic Structure
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The formal democratic structure is similar in all countries
and co-operative sectors, with some variations in detail.
Within this structure both the monist and the dualist systems
are used: Shareholders' Meetings, Board of Directors/
Shareholders' Meetings, Supervisory Board, Executive Board.
Annual Shareholders' Meetings are either open to all members
(in small and medium sized societies and most British
consumer co-ops) or only to delegates. Delegates are elected
for between two and four year terms at district meetings or
on tickets (lists) voted upon in special election offices or
by letter. On average, participation in elections is low.
Elections are rarely contested. Often it is difficult to find
a sufficient number of candidates.
The duties for Shareholders' Meetings are almost the same in
each country and co-operative sector. These include the
approval of the annual accounts and balance sheet, elections
of Board members, change of rules, decision about mergers,
election of auditors.
Critical comments and questions to the Senior Management (CEO)
about the current situation and development of the society
are rarely heard in many Shareholders' Meetings.
The Board of Directors/Supervisory Board is elected for a two
to four year term. Except for being a loyal member, no
formal qualifications for candidates are required. In many
co- operatives, elections are not often contested but this
has increased somewhat during recent times. It is known and
generally accepted, that candidates are often preselected and
proposed by the sitting Board and chief officials.
Re-election is possible and frequent.
In the monist system, it is the Board which legally exercises
the ultimate power and responsibility in all matters of the
society but it delegates the running of the daily operations
to the chief official (CEO) and his management team who are
appointed/approved by the Board. In some countries and
societies, the chief official is member of the Board e.g. in
Sweden, or its President e.g. holding the office of PDG in
many French and Italian societies, thus putting him in a very
strong position.
In the dualist system, e.g. in Germany and Austria the exact
responsibilities of the Supervisory Board and the Executive
Board are laid down in the co-op laws and/or rules of the
society.
The Supervisory Board monitors closely the development of the
operation and performance of the management, examines the
financial statements and balance sheets, follows up the
results of the auditors and, most importantly, appoints and
removes the Executive Board. The Executive Board runs the
business in its own right and in the framework of given
guidelines and limitations set by the law and the statute of
the society. In large societies, the Executive Board
consists increasingly of full time salaried executives only.
Employee representation in the Boardrooms i.e. elected by the
employees, is governed by workers' participation laws or by
voluntary agreements. Representation ranges from nil to 50
per cent. Severe conflicts of interests between employee
representatives and the general interests of members were not
reported but, realistically must occur in case of crisis,
staff reductions and closures. Urgent changes and decision
making may be slowed down because of such conflict of
interest. On the other hand, there are also examples e. g.
Sweden) where employee representation helped to implement
necessary changes.
In Great Britain, most consumer co-ops have some directors who
are employees but who are elected by members. This can cause
conflicts as mentioned. The Registrar of Friendly Societies
is limiting numbers of employees to below quorum level.
The frequency of Board meetings varies between six and twelve
times a year, with dates set beforehand e.g. up to one year.
In general the attendance is high, up to 90 to 100 per cent.
A varying degree of sophisticated information is sent out
before the meetings, supplemented by further documentation
and reports by senior management at the meeting.
To a varying extent the Boards, especially of larger
societies, work with sub-committees on specific areas, such
as finance and financial accounts (auditing), investments,
membership, personnel, loans etc. A special committee
chaired by the President is often responsible for preparing
the appointment of chief officials and senior management and
determining their remuneration package.
Only a few women are represented on the Boards, which means
that they do not necessarily represent the interests of all
members, especially in those societies with a large share of
women within the membership.
In all West European co-operative sectors and societies
strengths and weaknesses in the functioning of the formal
democratic structures and in the collaboration between Boards
and management are to be found. In successful societies
there are normally few problems in the Boardroom and there is
confidence in the ability of the management to run the
business in a proper way promoting the interests of members.
But there is a warning voice from Sweden which has to be
taken into account - that continuous success creates inaction
and lack of drive for new initiatives and innovations with
the danger of future failure.
The following weaknesses and problems in the Boardroom and in
the collaboration with management have occurred in one way or
another:
-The elected directors have not been strong enough to exert
the authority and power given to them by the law and rules in
relation to management. In the case of continuously failing
to meet budgets and excessive losses, the Boards did not
take, or only hesitantly took, the necessary measures e.g.
the removal of the executives.
- Some of the Board members did not have the background and
ability (and/or time and commitment) to lead and monitor
large complex business operations thus failing to recognise
wrong developments, mismanagement and heavy losses in time.
Matters became worse by gaps in vital information provided by
management.
-The balance of power is sometimes inappropriate. The real
power lies with chief officials. Only they have detailed
knowledge of the business. They have more or less an
information monopoly and may decide, to a large extent, the
information to be given and the topics to be dealt with on the
agendas of the Boards.
-The Board appointed inadequately qualified management who
lost control of a growing, complex business in an
increasingly competitive environment, thus leading to
disaster.
-Management is not generally interested in membership nor in
responding to a questioning Board but in pursuing own
priorities in relation to rapid expansion and own careers.
-Boards have grown too close to management, leaving too little
room for critical questioning and unpopular decisions.
-Board rotation is too low, giving younger active members very
little chance to participate.
V. External Control (Auditing)
********************************
The important external control and supervision role is
executed by external auditing. As a rule, co-operatives are
audited every year under law e.g. in Austria and Germany
and/or in accordance with the rules of the societies. These
services are provided by external professional auditing
companies elected by the Shareholders' Meetings or by the
co-operative federations. In several organisations,
additional auditors from the membership, are appointed by the
Shareholders' Meetings. Their role is to monitor the
professional audits and to ensure that the results and
decisions are in accordance with the interests of members.
The audit reports are given to the Governing Bodies for
discussion and for taking necessary action. At the annual
Shareholders' Meetings, it is normal for a short summary of
the audit to be presented, including a statement on the
accuracy of the balance sheet and accounts. The audit
reports help the Boards to carry out the control duties,
despite the fact that the information about the performance
of the society is historical. In reality, Shareholders and
elected directors do not always recognise the importance of
the auditors' role.
VI. Education and Information
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To a varying degree, most co-op organisations offer their
elected directors introductory seminars and/or educational
programmes on commercial and co-operative matters. In
general the interest in participating is high. Training
seminars for elected delegates and ordinary members are only
available in exceptional cases, e.g. in Denmark, Norway,
France or Germany. In some organisations e.g. in Great
Britain, Germany and Norway, Board members are provided with
a detailed handbook about the background and structure of
their co-op society and the rights and duties of the elected
lay-persons. These are well received.
As a rule, management and staff training has a high priority
in most societies and is carried out internally by own
educational facilities, and externally using outside training
schools and seminars. The training concentrates largely on
commercial matters and on improving professional skills.
Employee knowledge about co-operation is generally low and is
often not seen as important by management.
In large societies it is inevitable that only a small number
of members are able to be directly involved in the formal
democratic structure. In varying extent, societies are
trying to explore new ways of providing information and
improving information and consultation with members,
especially within consumer co-op organisations but also in
some agricultural co-operatives e.g. in Denmark and housing
co-ops. Examples given include members' meetings around
shops or housing complexes, district meetings, shop
committees, study circles, debate evenings, cultural and
leisure time arrangements, consumer forums, women's guilds
etc.
However, generally these are not sufficient to improve the
often poor knowledge of members about co-operation or to
revitalize the interest of members in the affairs of their
society. Important and additional activities include the
giving of regular information via member magazines,
newsletters, press releases, films and TV spots, short annual
reports, social balances etc. These information channels are
known but used insufficiently. High costs are mentioned by
management as a reason for doing little or nothing.
VII. Financial Involvement
**************************
It was underlined by many of those interviewed that a
substantial financial involvement is able to contribute to
stronger loyalty and commitment by members in the affairs of
their society and this involved paying them an attractive
dividend or interest rate.
In most countries members invest one or more shares in their
co-op society, with a minimum and maximum amount. As the
amounts are widely different, anything from 1 pound to 20,000
pounds, members play a varying role in financing and risk
bearing in their society. In addition to the member shares,
parts of the profits are retained and transferred to the
equity capital, especially important in Denmark, Holland and
Denmark, where member shares are not required.
For improving the level of risk bearing equity capital, new
financial instruments for attracting more capital have been
developed. Some German societies e.g. consumer Co-op
Dortmund - Kassel have issued "participation certificates"
(Genuss-scheine) via the Stock Exchange and banks. In France
and Italy new legal regulations provide the possibility of
placing preferred non-voting shares with "investor members"
or to float co-operative investment certificates. The
envisaged European Co-operative Statute includes similar
regulations.
Several European consumer and housing co-operatives collect
savings from members, which are shown as liabilities in the
balance sheet, but add to liquidity and financing of the
societies (but are withdrawable on short notice). Members of
housing co-operatives have to make a substantial extra
contribution in shares and loans, when moving into a new
co-operative home.
Limited liability companies and stock holding companies are
widely used at secondary levels (central co-operative
institutions) for large scale business operations,
subsidiaries, daughter companies and takeovers. In Germany,
several co-operatives were changed into stock holding
companies trying to maintain the co-operative character by
corresponding regulations in the new statutes e. g. voting
rights, auditing. That proved to be a failure in the case of
the consumer co- ops and in the end the majority of shares
were taken over by large competitors.
VIII. Findings and Recommendations
**************************************
1. Ready-made solutions to improve corporate governance and
management-control systems are not available. It is
recommended that the individual societies and their
Boards carefully consider their own situation and, if
necessary draw up and implement the necessary measures.
Against the background of the Corporate Governance report
and experience of members, the ICA could act as a
catalyst for information and recommendations.
2. In theory, the message and corporate identity of
co-operation is very clear but in practice not very well
recognized by members, customers and public. It has
become blurred and interchangeable with that of private
competitors. Weaknesses in detail can easily be detected
by each society by member interviews and feedback.
A radical change can only be made if both Boards and top
management really want it and implement the necessary
action programmes. The policy and strategies of the
society have to be redefined with priorities set for
member orientation and member promotion, but which will
in no way harm or hamper the efficiency and
profitability of the business operations. They are, on
the contrary, preconditions to reach the necessary
economically based targets for member promotion.
At present profile programmes have been introduced e.g.
in Italy, Sweden, Norway, France and Denmark. The
success story of the consumer co-operatives in Norway
was presented at the seminar in St. Petersburg (see
Annex 3), which is worth studying in more detail.
3. It is mostly recognised that an active and involved
membership remains the motor of each society. On the
basis of an agreed Board policy, strong efforts have to
be made to revitalise the interests of members and to
recruit new members. Appropriate financial and
management resources have to be budgeted for. It is
recommended that responsibility for membership should be
placed with the top management with the obligation to
report regularly to the Board about the development and
measures taken.
Furthermore, membership lists should be updated from time
to time, allowing a realistic review and launching of
action programmes aimed at existing members loyal to the
society.
4. With the revitalisation of member interests it should be
possible to encourage qualified members to become
candidates for elected delegates to annual meetings or
directors of the Boards. Whilst it seems to be
legitimate and in order for elected delegates, Board
members and/or administration to identify and propose
suitable candidates it should be normal practice that
candidates are nominated by grassroot members either in
writing or spontaneously at the election meetings. An
election committee chaired by the President could be of
great help.
For a healthy democracy it is of great advantage if
elections are contested. Direct elections at election
meetings are to be preferred but participation could be
improved by more attractive arrangements at these
meetings. If list votings are used, information on all
candidates should be added to the lists to allow
informed voting. New methods of voting should be
examined e.g. postal ballots, ballots in election
localities in easy reach (shops, banking branches).
5. To be a loyal and active member should still be the only
formal qualification for the elected member
representatives to the Governing Bodies. Further formal
qualification conditions, even if desirable, would limit
the rights of members to nominate and elect a candidate
of their own choice and reduce further the grassroots
interest. As many examples show, it is possible,
especially in societies with large membership, to find
member representatives with the appropriate skills,
strength and qualifications. More important is that
these elected delegates and directors are willing and
able to offer sufficient time and commitment for their
new office, to become acquainted with the business and to
fully involve themselves in the demanding duties of the
Governing Bodies, not least in the Boardrooms, and to
attend ongoing training programmes.
6. In order to improve the knowledge and skills of the
elected Governing Bodies it should be the obligation of
all co-op societies to offer introduction courses and
comprehensive training programmes on commercial and
co-operative matters. At the same time it should be an
obligation for the elected directors, to attend any
training that is provided. In addition, handbooks and
other written documentation could be of great help in
explaining the co-op structures and targets as well as
the duties of the Governing Bodies.
7. In co-operative societies, especially with a large share
of females in membership it should be an objective to
elect more women to the Governing Bodies and, within the
staff, employ at all levels. A corresponding resolution
was unanimously adopted by the ICA Congress in
Manchester, October 1995 (see Annex 4).
8. There should be a clear cut division of legally binding
responsibilities between the Board of Directors and
chief officials, (and the respective Supervisory Board
and Executive Board) written down in the society's rules
and/or standing orders where the law does not provide for
it.
The advantages and disadvantages of the monist and of the
dualist system were presented and discussed at the
previously mentioned seminar in St. Petersburg (see
Annex 5). Further research is recommended, also in
connection with the role of the chief official (CEO)
including the question of whether the CEO should be a
member or even President of the Board. Another important
topic could be employee representation in the Board rooms
and possible conflicts.
9. An age limit for elected member representatives,
introduced already by several co-op organisations, is
one example which other societies may wish to consider.
The purpose of age limits is to improve rotation, giving
interested members the possibility to participate within
the Governing Bodies.
10. For their important, responsible and time-consuming work
the Board members should be paid a realistic financial
compensation. The level of this fee could be fixed in
collaboration with the co-op federations or in
accordance with guidelines provided by the federations
and should be carefully balanced. In the comments to
the financial statements presented to the Shareholders'
Meetings, information about the total sums paid to
elected directors and top executives should be given as a
sign of full openness to members.
11. Board meetings, with set agendas, should be held at
regular periods, with timetables fixed well in advance.
An absolute minimum seems to be six meetings a year.
The notices for meetings are sent out by the society but
in the name of the Board's President, who is also
responsible for setting up the agenda. The topics on
the agenda should be well documented.
The Board (Supervisory Board) has to instruct the chief
officials (Executive Board) which information and key
figures are to be supplied to directors on a regular
basis between meetings and before and at the meetings.
The information has to be comprehensive, but short and to
the point, and easily understandable.
At any time, the Board has the right to full information
about the affairs of the society. On the basis of an
agreed Board policy and guidelines Board members should
have the right to seek independent advice if special
problems, developments and proposals have to be clarified
in more detail. For such requests, the elected auditors
or the auditing departments of the co-op federation
should be available.
12. Dependent on the size of the Board, it is advisable to
employ sub-committees for special areas, which are able
to consider the subjects in question in more detail and
inform the Board as a whole accordingly. Such
sub-committees are used for example for finance and
financial statements (auditing), investments, loans,
personnel, membership.
One of the most important duties of the Boards is to
appoint a qualified management, This duty implies that
Boards must also be prepared to issue management with
warnings, and even removal, if objectives are not
achieved. In many cases, a special Board committee for
senior management has the responsibility of preparing
for the appointment of the chief official and his
management team, deciding service contracts with
remuneration and terms of office. The appointment of
the top management (Executive Board) is often made for a
four to five year term. Re-appointment is possible and
common but gives the directors the possibility of
reconsidering the qualifications and achievements of the
management in question.
13. The important role of the President/chairperson of the
society should be fully recognized. The election of a
suitable person with ability, power and commitment has
to be considered very carefully as he or she has to
guide and organize the work of the Board, agree the
agenda of Board meetings, initiate and monitor strategic
decisions and oversee and collaborate with the top
management.
14. As with the functioning of the formal democratic
structures and management within primary co-operatives,
the collaboration between the primary societies and
their central organisations is of great importance for
the progress of the whole group. Due to weaknesses and
flaws e.g. lack of confidence, much time, energy and
resources have been wasted during recent years. As
shown by successful examples, it is important to have a
clear division of work and responsibility on all sides
and on different levels. In this context, the election
of qualified member representatives into the Governing
Bodies of the central organisations is highly desirable,
giving them influence in protecting the overall
membership interests.
15. The reports of external audits, either by elected
independent professional auditing companies or by
auditing departments of the co-op federations, can be of
great assistance for the control of the business
operations of the society. They support the supervising
duties of the Governing Bodies. Furthermore the
auditors are available if special audits are required.
The results of the audits should be thoroughly evaluated
by the Board. In this context the sub-committee for
Finance and Financial Statements (sometimes called the
Audit Committee) should examine the audit report
together with the auditors and formulate, if necessary,
critical questions to be put to the management.
In order to guarantee, from the outset, the necessary
distance between the auditors and the administration of
the society it is advisable to change the auditors from
time to time.
16. In large co-operatives only a small number of members are
able to participate actively within the Governing
Bodies.
Therefore, it is of the utmost importance that societies
develop and introduce new ways for consultation and
information as already adopted by consumer co-ops and
societies in some other sectors. Among other methods
mentioned are district meetings, shop committees, study
circles, debate evenings, consumer forums, cultural and
leisure activities etc.
In addition, members should receive by right, on a
regular basis, information about their own society and
other co-operative and consumer related matters. Only
informed members are loyal members and therefore
providing information must be a priority. The existing
information channels are known, and to a varying degree
used, e.g. member magazines, news letters, press
releases, films and TV spots, short annual report,
social report etc.
17. Co-operative aims and targets can only be reached if the
employees at all levels are motivated and encouraged to
achieve these targets. They need a high standard of
professional skills which are mostly obtained through
training provided internally in own schools and
externally at seminars. It is also important that the
employees identify themselves with co-operative
philosophy and with the special profile of co-operatives
in order to understand the significance of the
economically based targets of member promotion in their
daily work. In this context, staff education in
co-operative matters should be intensified.
18. In many societies, financing and increasing the
risk-bearing own capital are a high priority. Besides
the traditional form of member shares, new financial
instruments are available or under consideration. It is
recommended that the Co-op Banks of the EU in Brussels
keep ICA members informed of the latest developments.
19. As demonstrated above, Corporate Governance and
Management Control systems include many aspects of
membership and membership involvement. In some
countries (Great Britain and France) Co-op organisations
are trying to identify the most important aspects in
Codes of Behaviour or Codes of Best Practice. It should
be of great interest for the European co-op
organisations to follow the working of these codes and
the future experiences. The British Co-op Code of Best
Practice was presented at the seminar in St. Petersburg
and attracted great interest from the participants. It
is suggested that a code similar to the British Consumer
code be prepared on an European level which should cover,
if possible, all co-operative sectors.
IX. Co-operatives in Eastern and Central Europe
************************************************
A separate section on co-operatives in Eastern and Central
Europe is required because of the very different
circumstances which affect them. These co-operatives are
heavily engaged in adopting and streamlining their operations
to the conditions of the free market economy. Despite the
difficulties they have made remarkable progress and are still
holding significant market shares in their respective fields
of activities. But they are aware of the fact that the
growing competition from private companies and the needs of
members make it necessary to improve further the efficiency
and profitability of their operational units. This means high
investments in reconstruction, modernizing and closing down of
unprofitable units. As a consequence this requires large
investment in education and training thus improving the
professional skills at all levels.
In addition one of the most important tasks seems to be to
revitalize membership and the functioning of the formal
democratic systems. In the past members were not accustomed
to (nor permitted to) influence and control the affairs of
their society. At present, most of them are not interested
in doing so, leaving the affairs of the society more or less
without guidance and control by members. In this context many
problems are similar to those in West European co-operatives
meaning that similar solutions have to be found.
A continuous close collaboration between the member
organisations of the ICA Region Europe and with the ICA
headquarters in Geneva is of great importance to supporting
the ongoing process of reconstruction and modernisation.
November 1995
by Reimer Volkers
