That cooperatives are member-based, member-owned and member controlled enterprises is not in dispute.
It is an established norm that cooperatives globally are guided by the seven universally accepted cooperative principles and driven by values that aim to professionalise management of their affairs for the benefit of members.
Universal cooperative principle no. 2 is on “democratic member- control” which provides that all members enjoy equal voting rights, the one-man-one vote principle irrespective of the number of shares held.
That contrasts with companies where shareholding determines the shareholders’ degree of voting rights or control in the affairs of the companies.
Notwithstanding the foregoing, governments intervene to formulate policies and enact laws deemed necessary to safeguard best interests of ordinary members.
For instance, it is mandatory for all registered cooperatives to carry out annual statutory audits besides having elected supervisory or audit committees that are mandated to regularly oversight the performance of the elected management committees or directors, as the case may be, and submit their findings to annual general meetings for members’ appropriate action.
Despite having the above governance structure in place, one may ask to what extent have the elected officers been transparent and accountable to their members as they manage the day-to-day affairs of their cooperatives.
What guarantee is there that these men and women have the wherewithal to drive their enterprises in the most professional manner for the benefit of their members in the rapidly-changing business environment driven by technology?
Finally, what guarantee is there that these elected officers inspire confidence that would enhance the attractiveness and competitiveness of their cooperatives at a time when the image of some of these cooperatives has been tainted beyond repair?
Some time back, a don from Cooperative University of Kenya sought to know whether Saccos are “informal associations with superficial regulatory frameworks that only existed on paper.”
It is generally accepted that companies set the pace in corporate governance because they exist purposely to generate profits for their shareholders.
They, therefore, appoint independent directors, the men and women who can bring on board some invaluable ideas that may not be available within the elected board of directors.
Such independent directors don’t possess voting rights hence their mandate is limited to provision of expertise the companies desperately needs.
In similar vein, what would stop cooperatives from also appointing such directors to augment the elected officers so that their members benefit from such ‘outsourced expert knowledge’ that is not locally available?
Would such a development in any way compromise or conflict the democratic nature of cooperatives?
I subscribe to the view that since independent directors are not electable, their role would purely enhance the credibility of cooperatives from an outsider’s perspective since they have no vested interests.
Therefore, even as we seek to deepen the cooperative identity, there is absolutely no conflict in paving way for independent directors in the cooperative movement whom I believe would further boost the profile of cooperatives as preferred vehicles for transforming the socio-economic and cultural interests of their members.
By our reporter
