Abstract
Agricultural cooperatives are economic organizations that arise due to market failures and that adopt relevant roles in the organization of producers in different countries around the world. Research on the corporate governance of these organizations is abundant due the peculiarities of their structure and property rights. In Brazil, studies in this area are infrequent and in need of furtherexplanation. The aims of the present study were to identify and characterize the incentive mechanisms (remuneration) used by agricultural cooperatives and, in addition, to determine if they have an effect on the president’s longevity in office in agricultural cooperatives. The study was conducted by considering the different models of corporate governance and analyzing a sample of cooperatives from the State of São Paulo. The methodology asked for access to the bylaws, Minutes of general assembly s (MoGA) and registration forms, available for download on the website of the CommercialCouncil of the State of Sao Paulo (JUCESP). The sample consisted of data from 49 agricultural cooperatives. The results indicate that larger cooperatives tend to develop governance structures that separate ownership and control. Moreover, these organizations have the best-paid presidents.In general, apparently there is a positive relationship between entrenchment and remuneration and company size. These exploratory results identify interesting elements for further researchon cooperative governance. However, the methodological challenges for determining causalitymust be overcome by research designed to demonstrate the effect of remuneration on entrenchmentof the president and its effect on the performance of the cooperative.
Highlights
Agricultural cooperatives are companies that play important roles in the organization of producers in different countries around the world
66% of the cooperatives used a model with the following bodies: general assembly (GA), board of directors (BoD), executive board (ExB) and supervisory board (SB)
It was noted in organizations that adopt the first model, that the GA focuses on the most relevant control decisions of the institution, as for example, changes in bylaws, BoD elections, approval of accounts, and other issues that determine the future of the company
Summary
Agricultural cooperatives are companies that play important roles in the organization of producers in different countries around the world. In some sectors of the economy, mainly those that require economies of scale, the family producer or holder of small productive modules is viable due to its economic relationship with the cooperative (CHADDAD et al, 2009; COOK; ILIOPOULOS, 2009; BARTON, 1989). The peculiarities of structure and property rights of these organizations make the study of their governance important and necessary. The fact that the cooperative owner is a user of its products and services, and that property rights are vaguely defined, as Cook (1995) points out, makes the structure of the incentive mechanisms and controls used in the agency relationship between principal and agent specific to this type of organization. Studies on corporate governance of cooperatives are normal. For instance, by Bialosrkorski Neto (2004), Pozzobon and Zylberstajn (2013), Costa, Chaddad and Azevedo (2012) and Costa, Chaddad and Azevedo (2013)
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