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Top Co-op Issues 2020

For the third year running, a Canadian Centre for the Study of Co-operative survey has found that co-operative leaders identify the need to improve awareness of the co-operative model as the most pressing issue facing the sector.

This year, the issue was driven home as some of the Top Co-op Issues Survey’s 56 respondents pointed to the delayed roll-out of federal COVID-19 relief programs to the credit union sector as evidence of what happens when policymakers have only a dim awareness of the sector. 

For many respondents, the awareness problem begins with the education system and curricula that largely ignore cooperatives. Respondents said the problem is particularly acute in business schools, where many future co-operative leaders get their first taste of business education. To address these challenges, survey respondents stressed the importance of promoting the co-operative model to youth. They also said the sector could do more to advance the understanding that co-operatives are purpose-driven businesses that invest in local communities, help address income inequality, and are working on addressing climate change. 

After awareness, co-operative leaders said that governance challenges continue to be the second most pressing issue facing the sector. This is consistent with the findings from the 2019 survey. In support of this concern, a number of respondents pointed to the governance issues behind MEC, formerly known as Mountain Equipment Co-op, being sold to an American private equity firm as it struggled to manage a large debt load from over-expansion in the wake of the pandemic’s impact on retailing. 

Co-op leaders interpreted MEC as a cautionary tale, one that underlines the importance of building a board culture that views the co-operative model as a strength and not as a weakness. At the same time, respondents expressed concern, as they had in the past, about the ability of co-operatives to find directors with the appropriate level of understanding and skills to meet the needs of larger co-operative organizations. To address these challenges, respondents emphasized the importance of co-op-specific board governance training and education. Some respondents added another twist to the issue of board representation, stressing the need for co-operative boards to have better diverse gender, racial, and other forms of representation. 

In a departure from previous years, respondents ranked access to capital and financing as the third most important issue facing the sector. Respondents said they are feeling an increasing need to make long-term investments in technology, machinery, and research and development, with some noting that the COVID-19 crisis has accelerated the importance of these investments. Many suggested that established co-operatives could play more of a role in supporting and developing smaller co-ops in start-up phases and businesses converting into co-ops. 

While the findings from the 2020 survey are largely consistent with those of years past, they do seem to have been marked by the MEC sale, the COVID-19 crisis, and a growing concern with the need for more diverse board representation. It remains to be seen whether these concerns will continue to carry the same weight in 2021 as the world attempts to “build back better.”

Read the full report.

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