General Trends, Findings and Recommendations (1996)

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA=20
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                         December, 1996


          (Source: Review of International Co-operation
                    Vol.89, No.4/1996, pp.37-49)

          General Trends, Findings and Recommendations

               by Moira Lees and Reimer Volkers*
          *********************************************



Reference & 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=20
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 11 July 1995,=20
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.=20
Information about the findings of the Governance project was
given to the ICA Congress in October 1995, in Manchester.

This final report can only touch upon the most important trends
and common problems and ends with 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.

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 at the ICA
Congress in Manchester in October 1995. 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.

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.

Formal Democratic Structure
---------------------------
The formal democratic structure is similar in all countries and=20
co-operative sectors, with some variations in detail. Within this

structure both the monist and the dualist systems are used:=20
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. =20

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=20
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=20
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=20
     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.

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=20
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=D5 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.=20
In reality, shareholders and elected directors do not always
recognise the importance of the auditors' role.

Education and Information
-------------------------
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=20
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=D5
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.=20
High costs are mentioned by management as a reason for  doing
little or nothing.

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.=20

In addition to the member shares, parts of  the profits are
retained and transferred to the equity capital, especially=20
important in Denmark and Holland, where member shares are not=20
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"
(Genussscheine) via the Stock Exchange and banks. In France and
Italy new legal regulations provide the possibility of placing=20
preferred non-voting shares with "investor members" or to float=20
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=20
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=20
trying to maintain the co-operative character by corresponding
regulations in the new statutes e. g. voting rights, auditing.=20
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.

Findings and Recommendations
----------------------------
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.=20

Against the background of the Corporate Governance report and
experience of members, the ICA could act as a catalyst for
information and recommendations.

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=20
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, which is worth studying in more detail.

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.

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 grassroots members either in writing or
spontaneously at the election meetings. An election committee
chaired by the President could be of great help.=20

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).

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=20
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. =20

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=20
in explaining the co-op structures and targets as well as the
duties of the Governing Bodies.

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.

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. 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.

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.

For their important, responsible and time-consuming work the
Board members should be paid a realistic financial compensation.=20
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.

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.

Depending 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.
   =20
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.

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.

As with the functioning of the formal democratic structures and=20
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.

The reports of external audits, either by elected independent=20
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.

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=20
introduce new ways for consultation and information as already
adopted by consumer co-ops and societies in some other sectors.=20
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.=20

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=20
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.

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 keep ICA
members informed of the latest developments. =20

As demonstrated above, Corporate Governance and Management
Control Systems include many aspects of membership and membership
involvement. In some countries (Great Britain and Rance) 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 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.

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=20
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=20
training thus improving the professional skills at all levels.=20

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.

--------------------
*    Ms. Lees works at the Co-operative Wholesale Society in
     Manchester as Deputy-Secretary and Mr. Volkers recently
     retired from the senior management of Coop Dortmund in
     Germany.