Co-governance, Social Responsibility and Economic Democracy

Abstract

Abstract This article contributes to the justification of social responsibility and economic democracy, which can create a sustainable society through co-governance The word co-governance is not the same as co-management, although it is also very often used in translations that do not distinguish between management and governance. Rozman explains: “Owners-shareholders have started to employ professionals called managers to manage their companies. The once unified function of governance (and management) has been divided into two organizational functions: governance, making decisions to protect owners’ interests, and management, coordinating business activities in a most efficient way while striving to attain goals and execute policies set by governance.” (Rozman 2000, 95) Later he explains: “The goal remained profitability, and corporate governance was conducted on the basis of ownership but not necessarily by the owners themselves. This was the first form of ‘non-owners’ or ‘nonself-governance’. Corporate governance and management went separate.” (Rozman 2013, 4) Clarke (1998, 182–194 as cited in Rozman 2013, 6) recalls of different stakeholders’ governance similar processes in the past, like mutual funds, cooperatives, Mondragon cooperatives, Israeli kibbutzes and Yugoslav self-governance. in companies. Each of these areas is specifically described as well as the contribution of each to a sustainable society. Importantly, the message that capital, which predominates in the current socio-economic system, does not allow the development of co-governance of stakeholders in companies. This severely curtails the making of socially responsible decisions in companies, which does not contribute to the development of economic democracy. By equating the rights of labour owners with the rights of capital, the conditions of co-governance of stakeholders would be met, which would give them the right to self-actualization based on the results of their work. This would lead to the development of economic democracy and further to a sustainable society. A sustainable society, supported by the co-governance, social responsibility and economic democracy is the ultimate goal of society.