SASKATOON (Staff) – A co-operative can never be the same after it invites in outside investors, co-operative leaders said last week.
But whether such a company ceases to be a co-operative depends on how management and members handle the new financial situation.
“Financing is never neutral,” said Byron Henderson of the University of Saskatchewan’s Centre for the Study of Co-operatives. “Financing affects the way we think and act,” he said, whether it’s as individuals, organizations or government.
Henderson was speaking at a conference on how co-operatives can face the future.
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The subjects under discussion ranged from the impact of new technology, to the definition of co-ops, to coping with the global marketplace.
But for many delegates from Sask-atchewan, the issue of how to finance co-ops in the future was the main focus of speeches, discussion groups and hallway debate.
Impact principles
With United Grain Growers having gone public in late 1992 and Saskatchewan Wheat Pool preparing to do the same thing, questions are being asked about what impact outside investment has on basic co-op principles.
Dan Ish, another academic from the co-op studies centre, told a discussion group that while it goes too far to say that a co-op should never seek outside financing, it’s equally wrong to pretend that it doesn’t change the nature of a co-op.
“The fear is it’s a slippery slope that may lead to violation of basic principles of democracy and member control,” he said.
In two presentations to the three-day conference, Sask Pool president Leroy Larsen outlined the company’s plans to convert member equity to share capital and eventually sell shares on the Toronto Stock Exchange.
He said the new-look pool will remain true to the basic co-op principles, including open voluntary membership, a democratic structure, commitment to service and co-op education.
The owners of non-voting common shares will have no say in the company’s business or policy decisions, he said, with the board of directors continuing to be made up of farmer-members.
Paul Wilkinson, a community development manager for the Saskat-chewan social services department, told Larsen that outside investors will have a strong indirect influence because the pool’s number one concern will become maintaining the share price.
Financial considerations will become the driving force in board decisions, he said, and the pool is bound to lose sight of its social and policy interests.
Larsen acknowledged outside investors will have an influence, but added that concerns about financial viability are already a major factor in board deliberations: “The directors have to make sure the co-op as a business survives into the future.”
Ian MacPherson of the University of Victoria, who is reviewing co-op principles at an international meeting in England this fall, said in an interview it’s too early to say whether the pool will still be a co-op under its new financial structure. It all depends how vigilant the directors and management are in adhering to co-op principles.
“I think it’s at risk,” he said. “It would be foolish to say it isn’t, but it would be equally foolish to say it can’t be done.”
