Good governance is crucial to the effective operation of societies - particularly those looking to grow.
Good governance is crucial to the effective operation of societies - particularly those looking to grow - regardless of size, legal form or business sector. Over the past few months we have been asked by a number of Co-ops about how they bring the key features of their society's governance into one document in a way which is clear, user friendly and easy to understand - both internally, for the society's officers and employees, but also externally, for the society's stakeholders. The answer - The Co-operative corporate governance code.
Developed by Co-operatives UK, the Co-operative corporate governance code is a great tool to help implement good governance. It's applicable to all co-ops, regardless of size or sector. The code offers a set of principles that all Co-ops can reflect upon and use to encourage and enable good governance practice - operating on a so called "comply or explain" basis. Alongside the code, Co-operatives UK have a range of appendices, covering roles and responsibilities for various key roles within a Co-op including a co-op secretary, co-op directors and co-op chairs; terms of reference for a range of committees; codes of conduct for directors; model induction checklists; and whistle-blowing.
The code covers six distinct areas:
- Member voice, participation and engagement
- Co-operative leadership and purpose
- Roles and responsibilities
- Board composition, succession and evaluation
- Risk, financial management and internal controls
- Remuneration of the board and executive leadership
Each area sets out a series of principles against which commentary is included as to the steps (provisions) that a Co-op should take to achieve those principles. For example, under roles and responsibilities, the code includes the following principle...
Directors must promote the success of the co-operative and act in the best interests of the co-operative as a whole, for the benefit of its members and should discharge their duties in ways that are consistent with the ICA Values and Principles. Directors should act objectively and fairly and serve the interests of the members, including the protection of the assets of the co-operative and its members.
...and to achieve this, the code states that...
A conflict of interest policy should be in place and should be provided to all directors, executive leadership and senior employees. All conflicts of interest should be dealt with appropriately and recorded in a register that is available for inspection by members.
You can download a copy of the Co-operative corporate governance code here: https://www.uk.coop/resources/co-operative-corporate-governance-code.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.