Accountability in Agricultural Co-Operatives: Issues for Governing Boards

Abstract

This paper reviews the literature on agricultural co-operatives and corporate governance to highlight some of the unique accountability problems faced by the governing boards of directors of producer-controlled agricultural co-operatives. Agricultural co-operative objectives and the problems of heterogeneity of cooperative membership highlighting the issues concerning to whom the co-operative board of directors is accountable and for what emerge. This literature illustrates various accountability mechanisms, to allow monitoring, evaluation and control made between the “normal” investor-owned firm with freely tradable shares and those of the producer-controlled agricultural co-operative. The relevant corporate governance and co-operative literature thus articulates the need for co-operatives and some of the reasons for cooperation among agricultural producers. The special nature of the co-operative enterprise and the new generation co-operative features in the literature, and their relationship with accountability issues is evaluated.