Abstract
This study comprises a qualitative analysis of the governance structures within the two largest agricultural cooperatives in Sweden, both of which have large and heterogeneous memberships, as well as sizeable and complex business operations. Interviews were conducted with district council members and representatives from the boards of directors. The data from both case cooperatives indicate a genuinely traditional democratic member governance structure. There is a great deal of social capital in the governance system. A tentative explanation of the member involvement is that the cooperatives’ equity capital is owned by the individual members, and the members are free to sell and buy their shares at a market rate. The members are satisfied with the return on the capital they have invested in the cooperatives. They receive bonus shares and dividends above what most members would get in other investments. A conclusion is that very large cooperatives may succeed well with a member-democratic governance system of the traditional cooperative type, which in this case is probably due to the members’ satisfaction with the individualized ownership of the cooperatives.
Highlights
The study presents unique cases about the ways in which large agricultural cooperatives could contribute to sustainability
“The internal governance refers to the decision-making processes, the role of different governing bodies, and the allocation of control rights to management” [5] p. 6
Some interviewees believed that the low frequency of the contact from the members was because the members perceived a long distance between them and the district council delegates
Summary
The study presents unique cases about the ways in which large agricultural cooperatives could contribute to sustainability. Since the two investigated cooperatives introduced individualized ownership structures, more social capital within the memberships have strengthened the member democracy, whereby the cooperatives have added to the economic, social, cultural and environmental sustainability for their members, as well as for non-members, the countryside and society at large [1]. The investigated cooperatives play a major role in the Swedish agricultural sector, and they—as well as their predecessors—have been important throughout the history of Swedish cooperatives [2,3,4]. This study investigates the internal governance of the two largest agricultural cooperatives in Sweden. Both of them have diversified operations and heterogeneous memberships. “The internal governance refers to the decision-making processes, the role of different governing bodies, and the allocation of control rights to management (and the agency problems that goes with delegation of decision rights)” [5] p. 6
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