There is a remarkable degree of scrutiny on governance matters in the co-operative movement at the moment. The way the Co-operative Group is organised is under fundamental review. The basic tenets of the co-operative movement – collective ownership, democratic member control, active participation – have been called into question, not least by a sceptical media. The whole process gives, in fact, an opportunity for careful reflection, despite the overtones of geekiness which Lord Myners detects.
Ownership by the wider community is not peculiar to the co-operative movement, and there are other sectors where there have been similar debates. The development trust movement, championed by national charity Locality, has been supporting the growth of neighbourhood based community enterprises since the foundation of the Development Trust Association (Locality’s predecessor) in 1993. Development trusts are defined as organisations that are:
In the 1990s and the early noughties, partly supported by an enthusiastic wave of New Labour regeneration funding through the New Deal for Communities programme, open elections to the boards of community regeneration bodies were all the rage. Often that meant anybody from the neighbourhood – whether they were technically a “member” of the organisation or not – got to vote in the elections to the board, and even to stand if they wanted to.
But the successful partnerships, like Royds Community Association in Bradford (which started life under the Major government’s Single Regeneration Budget scheme, and is still going) recognised that as well as local community involvement, they needed additional skills to be able to make informed decisions. It was a key principle that those brought in as “experts” needed to be “on tap, but not on top” – so the independent directors should not outnumber the community, but rather sit alongside to help the board as a whole make wise policy.
The challenge was always managing the tension between ownership and leadership; between accountability and competence. This tension is made more acute by the legal demands that being “on the board” puts on individuals, who become subject to a range of legal duties and responsibilities to the organisation (and its members and creditors). This means that no one can truly sit on a board in a “representative” capacity, because they owe legal duties to the whole organisation, not just to the stakeholders that put them there.
The same tension can be seen in the world of housing associations, where the role of “tenant board members” has again been the subject of debate. As housing associations have grown larger and larger, and (in some cases) more and more remote from the neighbourhoods they serve, increasingly the model has moved away again from “tenant led” to “tenant focussed”. The same seeming tensions emerge in relation to capacity, skills and leadership, with an active regulator looking to boards to exercise effective strategy and business acumen in their decision making (sound familiar?)
Some themes emerge consistently, across these divergent types of organisation. Ownership in name is not enough, unless it is matched by a consistent, locally focused, and determined effort to engage. The larger an organisation becomes, the more remote it will get from those it seeks to serve, without a deliberate and prioritised strategy (and sometimes even anyway). When things work well, it is because of a strange alchemy between the right kind of people and the right kind of strategy. And democracy in and of itself is not the same as empowerment; just because an organisation has some kind of democratic process built into its structure, that does not make its governance either accountable or effective. As Ken Livingstone said:
“If voting changed anything, they’d abolish it”.
David Alcock is a senior associate at Anthony Collins Solicitors, where he regularly works on legal structures and governance matters for all kinds of community organisations, social enterprises, and co-operatives.
Contact David Alcock on david.alcock@anthonycollins.com or 0121 214 3652.
Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
A long-awaited decision of the Court of Appeal has clarified that a lower standard of proof should apply than previously thought before an Inquest can return a conclusion of suicide.
New regulations come into force on 1 June 2019, amending the Section 21 (s21) prescribed form template for use with assured shorthold tenancies.
In a challenging economic climate with continuing budget cuts and increasing expectations of staff, sickness absence remains an ongoing problem that is important to address.
Social housing providers will routinely have a number of construction projects underway at any one time. It is essential for client teams to understand and avoid key contract management pitfalls.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.