Executive capture is not a modern phenomenon. Members were complaining about their society managers in the 1850s. In those days it wasn’t sophisticated boardroom power struggles, just managers running off with the takings. But the theme is the same. If a co-operative is an association of people set up to provide for their needs, how can we ensure our employee managers are really running the enterprise in our interests?
Of course this problem isn’t confined to the co-op movement. Experts have long pondered the ‘agent/principal’ problem when managers act in their own interests rather than for their investors’. A series of corporate governance initiatives and reports have unsuccessfully tried to address this problem, each following a corporate collapse. Enron, WorldCom, Rover, Northern Rock, RBS, HBOS, Lloyds TSB, Southern Cross, City Link… The procession seems unstoppable.
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