The First Leg of the Cooperative Triple Bottom Line: Ownership

Phil Kenkel Bill Fitzwater Cooperative Chair

The concept of a triple bottom line (economic, environmental and social) for corporations is coming into vogue. All firms have multiple objectives, but measuring success on a three dimensional scale is difficult. This discussion reminds me of a presentation of a cooperative’s triple bottom line. The three categories refers to the three steams by which members gain value from a cooperative.

The first value proposition is “member owned”. Cooperative members benefit and perceive value from the fact that they own and control the cooperative. It is this value that leads to the adage that “a good cooperative is hard to kill”. While members can, and sometime do liquidate a cooperative to recognize the value of assets, there are many more examples of members foregoing financial return to retain control of their local cooperative. In order to maximize this first leg of cooperative value, cooperative boards and managers have to work to maximize member input. As businesses cooperatives must make the right decisions but as member organizations cooperatives must engage members in the process. Just as community members back the high school sports teams because they are “our team”, every cooperative member must back the cooperative because it is “our business”.

Sometimes, this first leg of the cooperative value package is not enough. As cooperative membership becomes more diverse maintaining the ownership value is more difficult. When a minority of members has needs for special services they may conclude that the board and manager don’t value their input. The reality may be that the management is making a sound business decision that protects the overall financial interests of the members. Ownership value may also not be enough if the cooperative needs to obtain, or retain significant investment from the members. Members value ownership, but ownership, by itself doesn’t pay the bills. That is where the next two legs of the cooperative triple bottom line, and my next two newsletters, come into play,

June 18, 2010