Cooperative Social Responsibility: A Case Illustration of the Unique Character of Cooperative Governance and Its Relation to the Concept of Corporate Social Responsibility

Abstract

The present paper analyses the governance structure of cooperatives and their relation to the concept of corporate social responsibility (CSR). The historical perspective illustrates that this particular governance structure which traces back to the nineteenth century has been influenced by the economic, political and social circumstances since inception. Values, like democracy, self-help and solidarity, are essential elements of present-day cooperatives although the relevance of these values has experienced volatility over time. Focusing on European cooperative banks and the management concept of member value, this explorative case illustration shows how the traditional values and principles manifest into a modern business strategy. While the focus is on the members, cooperative activities also benefit the society. Although they have similar inspirational roots and are both characterised by a variety of interpretations, there is one major difference between corporate and cooperative social responsibility: The orientation towards the local community and the society has always been part of the cooperative DNA. In this sense, cooperatives serve as role models of a democratically-organised and socially responsible way of doing business. Consequently, using the example of financial cooperatives, the author argues that it is upon the management of those organisations to turn the unique governance structure into a competitive advantage in order to benefit from the cooperative social responsibility.