2020 CO-OPS & CREDIT UNIONS REPORT FROM THE BOARD ROOM Table of Contents 1. Introduction ...... 1 2. Co-op Demographics ...... 3 3. Board Composition ...... 5 4. Board Service ...... 11 5. Director Compensation ...... 13 6. Delegate Compensation ...... 19 7. Conclusion and Recommendations ...... 21 References...... 23 Appendix A...... 25

This report was written and designed by Travis Reynolds on behalf of the Canadian Centre for the Study of Co-operatives. Co-operative principles and organizations have had a formative influence on the lives of Canadians for more than a century. Extending this tradition, researchers at the Canadian Centre for the Study of Co-operatives explore the integral role co-operatives play in promoting economic justice, development, and sustainability in communities around the world. The Centre’s work addresses policy and governance issues, and examines how co-operatives innovate in finding solutions to the world’s pressing problems. Known for its community-based research, the Centre makes significant contributions to global studies of the social economy and stimulates exchanges of information across local, provincial, national, and international boundaries. For more on the Canadian Centre for the Study of Co-operatives, please see our website at: https://usaskstudies.coop This report, and the associated survey, were made possible by the generous support of the United Farmers of Alberta Co-operative. 1. Introduction

Overseeing a co-op is challenging. The democratic This report, prepared by the Canadian Centre process does not guarantee that a board of directors for the Study of Co-operatives, allows co-operatives will have the experience, expertise and attitude to see how their board practices compare to those to effectively guide and monitor management, of other co-ops and . particularly as co-operatives grow in size Through an online survey administered from and complexity. Co-operatives have to balance August to September 2019, 26 co-ops and credit compensating directors enough to attract strong unions shared information about many aspects candidates with ensuring their compensation of their corporate governance. The full sample programs are affordable. is listed below in Table 1. Unlike public companies with shares that trade on an exchange, co-operatives cannot tie director compensation to share performance. Co-operatives also have to be mindful that their mission is to serve members as owners and users over the long term. It is not to generate profits for shareholders whose interest is likely to be in short-term returns. This adds further complexity to questions about governance and compensation.

Table 1: Participating Co-ops and Credit Unions

Affinity Credit Union Agrifoods International Connect First Credit Union MEC Agropur Credit Union Central of Alterna Credit Union Desjardins Northern Credit Union Arctic Co-op Federated Co-ops Ltd. United Farmers of Alberta Atlantic Central Gay Lea Foods Co-operative Credit Union Calgary Co-op Kawartha Credit Union WFCU Credit Union Co-operators Kindred Credit Union

1 This page is intentionally blank.

2 Figure 1: Co-op Type 2. Co-op Demographics Figure 1: Co-op Type Consumer 17 FigureConsumer 1: Co-op Type 17 Twenty-six co-ops and credit unions participated FigureMulti-Stake. 1: Co-op Type 6 Multi-Stake. 6 ConsumerProducer 3 17 in the online survey. Most were consumer co-ops ConsumerProducer 3 17 Multi-Stake. 0 6 10 20 (65%, n=17), six were multi-stakeholder, Multi-Stake. 0 6 10 20 Producer 3 and three were producer (see Figure 1). Looking Producer 3 0 10 20 Figure 2: Primary0 Sector 10 20 at Figure 2, most co-ops operated primarily in Figure 2: Primary Sector the financial sector (70%, n=18). Agriculture 3 FigureAgriculture 2: Primary3 Sector FigureFinancial 2: Primary Sector 18 The majority of participants (73%, n=19) Financial 18 ManufacturingAgriculture 1 3 were Tier One, or primary, co-ops (see Figure 3). ManufacturingAgriculture 1 3 FinancialRetail 4 18 FinancialRetail 4 18 There were also five Tier Two co-ops in the sample. Manufacturing 0 1 10 20 Manufacturing 0 1 10 20 Tier Two co-operatives are regional, district Retail 4 Retail 4 0 10 20 or provincial co-ops, usually owned by Tier One 0 10 20 organizations. Additionally, two Tier Three co-ops Figure 3: Tier Type participated in the survey. Tier Three co-ops Figure 3: Tier Type Tier 1 19 are national organizations, usually owned FigureTier 3: 1 Tier Type 19 FigureTier 3: 2 Tier Type 5 by Tier Two co-operatives. Tier 2 5 Tier 13 2 19 Tier 31 2 19 Tier 2 0 5 10 20 In terms of market, most co-ops operated regionally Tier 2 0 5 10 20 Tier 3 2 (n=19). Four co-ops had national markets, two had Tier 3 2 0 10 20 international markets, and one was local only Figure 4: Market0 10 20 Figure 4: Market (see Figure 4). Figure 5 shows where participants Local 1 FigureLocal 4: Market1 operated. Most co-ops had operations in FigureRegio 4:nal Market 19 Regional 19 (n=14), Alberta (n=11), Manitoba (n=10) NatLocalional 1 4 NatLocalional 1 4 and British Columbia (n=9). InternationalRegional 2 19 InternationalRegional 2 19 National 0 4 10 20 National 0 4 10 20 International 2 International 2 0 10 20 0 10 20

Figure 5: Organizations per Province or Territory

13+ 9-12 Nunavut: 3 5-8 Yukon: 2 Northwest Territories: 3 1-4

Newfoundland and Labrador: 4

British Columbia: Alberta: Manitoba: 9 11 10

Ontario: 14 Quebec: 5

Saskatchewan: 8 Prince Edward Island: 4 New Brunswick: 4 Nova Scotia: 5

3 Table 2: Attributes of Participating Co-ops Name Average Minimum 25% Median 75% Maximum Assets (million $) 17,512 1 640 4,602 8,177 295,500 Revenue (million $) 2,047 0 105 351 1,187 16,576 # of Members 480,650 25 2,950 112,500 229,250 5,400,000 # of Employees 3,284 75 383 834 2,358 46,000 Figure 5: Average Assets by Sector (billion $)* Figure 5: Average Assets by Sector (billion $)* Agriculture 1.9 Data for assets, revenue, number of members and Figure 5: Average Assets by Sector (billion $)* AgricultureFinancial 1.9 23.5 number of employees are all positively skewed. Agriculture 1.9 AgricultureFinancialRetail 1.92.3 23.5 Financial 23.5 In other words, there are extremely high values FinancialRetail 2.3 23.5 Retail 0 2.3 5 10 15 20 25 that upwardly bias the averages. To account Retail 0*The co-op2.3 in the5 manufacturing10 sector did not15 provide asset data20 25 0*The co-op in the5 manufacturing10 sector did not15 provide asset data20 25 0 5 10 15 20 25 for this, the medians are considered, as well *The co-op in the manufacturing sector did not provide asset data *The co-op in the manufacturing sector did not provide asset data as percentiles. Figure 6: Average Revenue by Sector (million $)* Figure 6: Average Revenue by Sector (million $)* Agriculture The median asset level was $4.6 billion (see Table 2). Figure 6: Average Revenue by Sector (million3,119 $)* AgricultureFinancial 1,532 3,119 Asset levels for the sample are high because most Agriculture 3,119 AgricultureFinancialRetail 1,532 3,1193,174 of the organizations surveyed were credit unions. Financial 1,532 FinancialRetail 1,532 0 1,100 2,200 3,174 3,300 Due to the nature of their business, these co-ops Retail 3,174 Retail 0*The co-op in the manufacturing1,100 sector did not2,200 provide revenue3,174 data 3,300 tend to have higher asset values compared 0*The co-op in the manufacturing1,100 sector did not2,200 provide revenue data 3,300 0*The co-op in the manufacturing1,100 sector did not2,200 provide revenue data 3,300 to non-financial organizations. *The co-op in the manufacturing sector did not provide revenue data Figure 7: Average Members by Sector (thousand) The median revenue for the co-ops surveyed Figure 7: Average Members by Sector (thousand) FigureAgriculture 7: Average48.9 Members by Sector (thousand) was $350.5 million. The median membership size Figure 7: Average Members by Sector (thousand) AgricultureFinancial 48.9 360.4 Agriculture 48.9 was 112,500 members, and the median number ManufacturingAgricultureFinancial 2.948.9 360.4 Financial 360.4 of employees was 834. ManufacturingFinancialRetail 2.9 360.4 1,465.1 Manufacturing 2.9 ManufacturingRetail 2.9 0 500 1,000 1,465.11,500 Retail 1,465.1 To get a better understanding of how co-ops differ, Retail 0 500 1,000 1,465.11,500 0 500 1,000 1,500 Figures 5 to 8 break down average assets, revenue, 0 500 1,000 1,500 number of members, and number of employees by primary sector. Figure 8: Average Employees by Sector (thousand) Figure 8: Average Employees by Sector (thousand) Agriculture 3.60 Figure 8: Average Employees by Sector (thousand) AgricultureFinancial 3.603.63 Agriculture 3.60 ManufacturingAgricultureFinancial 0.48 3.603.63 Financial 3.63 ManufacturingFinancialRetail 0.48 2.19 3.63 Manufacturing 0.48 ManufacturingRetail 0.48 2.19 Retail 0 1 2 2.19 3 4 Retail 0 1 2 2.19 3 4 0 1 2 3 4 0 1 2 3 4

4 3. Board Composition

The corporate governance literatures emphasizes Figure 9: Number of Directors per Board board composition. The assumption is that 1 22 the right mix of directors will have the expertise, 2 22 experience and temperament to effectively monitor 3 15 management and guide the firm. In co-ops 4 15 and credit unions, directors are usually placed 5 12 on boards via democratic processes. These processes 6 12 7 12 are often framed and influenced by legislation, 8 12 what are considered best practices, research, 9 12 history and circumstance. 10 12 11 12 The data gathered by the Canadian Centre for 12 12 the Study of Co-operatives highlights the current 13 12 board composition for select Canadian co-ops 14 11 and credit unions. Characteristics include levels 15 11 of diversity and independence, two of the areas 16 11 emphasized in recent corporate governance 17 11 18 10 literature. The survey also collected information 19 9 about board size, how many directors serve on 20 9 multiple boards, the number of visible minorities 21 9 on a board, and the number of directors with 22 9 executive-level or relevant industry experience. 23 9 24 9 3.1 Board Size 25 8 26 7 The governance literature tends to favour smaller 0 5 10 15 20 25 boards (Jensen, 2010; Lipton & Lorsch, 1992). Larger boards are associated with diminished effectiveness, that two co-ops have almost twice the average a lack of cohesion, and higher co-ordination costs. number of directors. Although boards this big may However, all of this depends on the type of the firm be unwieldy, they may also fit the advising and a board oversees. For instance, managers of complex representation needs of larger, more complex firms. organizations require more advice, which larger boards may be better able to provide. 3.2 Female Directors Looking at the co-operatives that participated in While research suggests that female directors the survey, the average number of directors was 12 positively impact firm and board performance, there (see Table 3). This is similar to Canadian investor- is some evidence that a board must have at least three owned firms (IOFs). They average 11 directors women to realize any improvement (Konrad, Kramer, (Spencer Stuart, 2019). Figure 9 demonstrates & Erkut, 2008; Torchia, Calabrò, & Huse, 2011).

Table 3: Board Size and Number of Female Directors of Participating Co-ops Name Average Minimum 25% Median 75% Maximum Directors 12 7 9 11.5 12 22 Female Directors 4 0 3 4 5 7

5 On average, participating co-operatives had Figure 10: % of Female Directors per Board four female directors, which exceeds that critical 1 78% (7) threshold (see Table 3). 2 67% (6) 3 56% (5) Figure 10 shows the percentage of female directors 4 55% (6) on the boards of participating co-operatives. 5 50% (5) On average, just over one-third (34.4%) of directors 6 45% (5) were female. This is higher than Canadian IOFs, 7 44% (4) which only had an average of 20.5% (Statistics 8 42% (5) 9 42% (5) Canada, 2019). 10 40% (6) 3.3 Diversity Targets 11 36% (4) 12 33% (4) Figure 10 also shows which organizations 13 33% (4) had some sort of board diversity target or quota. 14 33% (5) 15 32% (7) Over the past decade, diversity quotas have 16 32% (7) become increasingly commonplace. Such quotas 17 25% (2) are usually intended to increase female 18 25% (3) representation on corporate boards. 19 25% (3) 20 25% (3) Looking at Figure 10, there does not seem to be 21 25% (3) a relationship between female representation and 22 18% (2) Co-op has diversity targets 23 14% (1) whether an organization has a diversity target. Less Co-op has no diversity targets 24 11% (1) than half of the co-ops surveyed (35%, n=9) had (Number of female directors on each board) a diversity quota, and of the five boards with the 25 8% (1) *Co-op has diversity targets but no female directors highest degree of female representation, only one 26 0%* had a diversity target. 0 20 40 60 80 100 3.4 Indigenous and Minority Representation Figure 11: Average % of Director per Board Female Directors 34% Compared to the degree of female representation, Indigenous Directors 5% participating co-ops and credit unions have Visible-Minority Directors 4% much lower visible-minority and Indigenous 0 20 40 60 80 100 representation on their boards (see Figure 11). On average, only 5% of directors were Indigenous, Despite a relative lack of ethnic diversity, a number and 4% were a visible minority. of co-ops surveyed recognized the importance of Figure 12: # of Outside and Inside Directors, board diversity. As one respondent stated, “Diverse and % Independent boards are believed to make better decisions by “ A diverse board helps reducing1 the risk of “group think”. Diversity 22/0 (100 leads%) the organization to better to 2creativity in problem solving and 19/3 (innovative86%) 3 15/0 (100%) solutions. A diverse board helps the organization understand the issues and 4 15/0 (100%) concerns of the members it serves. […] to 5better understand the issues 12/0 (100and%) concerns of the Diverse boards are cross-generational, members6 it serves. A truly diverse 12/0 (100%) board reflects the7 community in which the 12 organization/0 (100%) operates. multicultural and gender representative. Diverse8 boards are cross-generational, 12/0 (100%) multicultural — Survey Respondent and9 gender representative.” 12/0 (100%) “ 10 12/0 (100%) 11 12/0 (100%) 12 12/0 (100%) 13 12/0 (100%) 6 14 11/0 (100%) 15 11/0 (100%) 16 11/0 (100%) 17 11/0 (100%) 18 10/0 (100%) 19 9/0 (100%) 20 9/0 (100%) 21 9/0 (100%) 22 9/0 (100%) 23 9/0 (100%) Outside directors 24 9/0 (100%) Inside directors

25 8/0 (100%) (% of board that is independent) 26 7/0 (100%) 0 5 10 15 20 25

Figure 13: Average % of Independent Directors

Co-operative 99% Investor-Owned Firm 81% 0 20 40 60 80 100 Figure 11: Average % of Director per Board Figure 11: Average % of Director per Board Female Directors 34% IndigenousFemale Directors 5% 34% Visible-MinorityIndigenous Directors 4%5% Visible-Minority Directors 4% 0 20 40 60 80 100 0 20 40 60 80 100

Figure 12: # of Outside and Inside Directors, 3.5 Independent Directors andFigure % Independent12: # of Outside and Inside Directors, and % Independent The most common criterion for a well-functioning 1 22/0 (100%) 1 board is that the majority of its members are 2 19/3 ( 8622%)/0 (100%) 2 19/3 (86%) independent. Independent directors are usually 3 15/0 (100%) 43 15/0 (100%) defined as directors who are not employed by the firm 54 12/0 (100 15%)/0 (100%) they oversee, beyond their role on the board. 65 12/0 (100%) 76 12/0 (100%) While inside directors (i.e., directors employed 87 12/0 (100%) by the firm beyond their directorships) can be fired 98 12/0 (100%) by management, independent directors (also referred 109 12/0 (100%) to as outside directors) can only be removed 110 12/0 (100%) by individuals with voting rights (e.g., investors, 121 12/0 (100%) members, etc.). They can also disqualified from 132 12/0 (100%) 143 11 12/0 /(0100 (100%)%) holding their position for such reasons as exceeding 14 11/0 (100%) term limits, or being convicted of a crime. Since 15 11/0 (100%) 165 11/0 (100%) independent directors cannot be fired, they should 176 11/0 (100%) better challenge management because they do not 187 10/ 110 (/1000 (100%) %) fear losing their board seats. 198 9/0 10 (100/0 (%)100%) 2109 9/0 (100%) Of the organizations surveyed, all boards 210 9/0 (100%) were independent (see Figure 12). Only one 221 9/0 (100%) 22 co-operative had any inside directors, and even 23 9/0 (100%) Outside directors its board was mostly independent (86% of its 243 9/0 (100%) InsideOutside directors directors 24 9/0 (100%) Inside directors directors were outside directors). Overall, 25 8/0 (100%) (% of board that is independent) 265 7/0 8 (/1000 (100%)%) (% of board that is independent) the average board was 99% outside directors. 26 7/0 (100%) 0 5 10 15 20 25 This is more than the boards of investor owned 0 5 10 15 20 25 firms (IOFs), which are 81% independent (Spencer Stuart, 2019). Figure 13 shows Figure 13: Average % of Independent Directors Figure 13: Average % of Independent Directors the level of independence for co-ops and IOFs. Co-operative 99% Investor-OwnedCo-operative Firm 81%99% It is important to note that having outside directors Investor-Owned Firm 81% 0 20 40 60 80 100 does not guarantee that a board becomes more 0 20 40 60 80 100 skeptical, objective, or critical of management. Even directors who are not employees may still economic livelihoods. In such cases, any ability be linked to their co-operatives in ways that to influence directors’ financial wellbeing may impact their independence, particularly if they give management undue influence over the board, have significant business or personal relationships and negatively impact the board’s independence. with the co-operative. To have directors who are able to impartially oversee management, a board may want to 3.6 Non-Member Directors consider including directors who are neither employees nor members. By being members of the co-op they oversee, some directors may still be financially connected Aside from greater independence, non-member to management, even if they are not employees. directors may have requisite skills and experience This may be more true for producer co-ops, because not found in a co-op’s membership. However, care these co-ops tend to be tied to their members’ must be taken when adding non-member directors

7 Figure 14: % of Non-Member Directors 1 25% (3) 2 22% (2) 3 22% (2) 4 9% (1) 5 9% (2) 6 8% (1) 7 0% 3.7 Director Experience to the board. Failing to abide by democratic principles 8 0% when nominating or appointing a non-member 9 0% director may open an organization up to criticism As10 co-ops0% become larger and more complex, about the legitimacy of its decision-making processes. there11 0% is increasing pressure to ensure directors Non-member directors may also have a weaker have12 0 %the appropriate experience. The exact mix affinity for the co-operative model than directors of13 skills0% and expertise will vary depending who are members. on14 the0% demands of the organization. Corporate governance15 0% best practices, legislation and empirical Still, the expertise and independence possessed research16 0% often emphasize financial acumen, by non-member directors may be worth the effort 17 0% and18 0C-suite% (i.e., corporate officers or “chiefs”) to place them on the board. Some survey or19 executive-level0% experience. respondents appear to echo this sentiment. 20 0% Six organizations had at least one non-member Of21 the0% 26 organizations surveyed, just over a quarter director on their board (see Figure 14). Of those (27%,22 0% n=7) had boards where the majority of directors six organizations, three were consumer co-ops had23 0executive-level% experience (see Figure 15). Consumer or multi-stakeholder co-ops 24 0% and three were producer. This could change in One board was entirely comprisedProducer co-ops of directors the future. Three other participants were considering with25 0executive% experience. Conversely, two boards 26 0% adding non-member directors to their boards. had no directors with such experience. 0 20 40 60 80 100

Figure 14: % of Non-Member Directors Figure 15: % of Board with Executive Experience

1 25% (3) 1 100% (9) 2 22% (2) 2 83% (10) 3 22% (2) 3 75% (9) 4 9% (1) 4 67% (8) 5 9% (2) 5 67% (6) 6 8% (1) 6 56% (5) 7 0% 7 55% (6) 8 0% 8 50% (4) 9 0% 9 45% (10) 10 0% 10 40% (4) 11 0% 11 33% (5) 12 0% 12 33% (3) 13 0% 13 27% (3) 14 0% 14 22% (2) 15 0% 15 22% (2) 16 0% 16 20% (3) 17 0% 17 18% (2) 18 0% 18 17% (2) 19 0% 19 17% (2) 20 0% 20 17% (2) 21 0% 21 14% (1) 22 0% 22 9% (1) 23 0% 23 8% (1) Consumer or multi-stakeholder co-ops 24 0% 24 5% (1) Producer co-ops 25 0% 25 0% 26 0% 26 0% 0 20 40 60 80 100 0 20 40 60 80 100

Figure 15: % of Board with Executive Experience

1 100% (9) 8 2 83% (10) 3 75% (9) 4 67% (8) 5 67% (6) 6 56% (5) 7 55% (6) 8 50% (4) 9 45% (10) 10 40% (4) 11 33% (5) 12 33% (3) 13 27% (3) 14 22% (2) 15 22% (2) 16 20% (3) 17 18% (2) 18 17% (2) 19 17% (2) 20 17% (2) 21 14% (1) 22 9% (1) 23 8% (1) 24 5% (1) 25 0% 26 0% 0 20 40 60 80 100 Compared to executive-level experience, fewer Figure 16: % of Board with Industry Experience boards had directors with experience in the same 1 100.0% (12) industry as the co-operatives they oversee. 2 100.0% (12) Over one quarter of organizations surveyed 3 100.0% (15) lacked directors with related-industry experience, 4 91 % (10) and all were consumer co-ops (see Figure 16). 5 82% (9) Comparatively, 91% of all producer co-op 6 78% (7) 7 67% (6) directors had experience in related industries. 8 50% (6) Overall, producer co-ops had more non-member 9 44% (4) 10 42% (5) directors and more directors with related-industry 11 36% (8) experience (see Table 4). This suggests that producer 12 22% (2) co-ops have different governance requirements 13 18% (2) compared with other types of co-operatives. 14 17% (2) (Note: Results should be interpreted cautiously, 15 14% (3) given the small sample size of the survey. 16 11% (1) Only three producer co-ops participated.) 17 10% (1) 18 8% (1) 19 0% Table 4: Board Demographics (% of directors) 20 0% Sector Industry Exp. Non-Member 21 0% 22 0% Consumer 24 1 23 0% Consumer or multi-stakeholder co-ops Multi-stakeholder 36 3 24 0% Producer co-ops Producer 90 19 25 0% 26 0% 0 20 40 60 80 100 3.8 Director Age

The average age of directors for the co-operatives Table 4: Director Age (years) surveyed was 57 years old (see Table 4). Just under Average Minimum Median Maximum three quarters of directors were between 51 and 70 57 29 58 80 years old (see Figure 17). The median age was 58. This is relatively young compared to the boards Figure 17: Director Age Distribution of Canadian IOFs. Approximately 1% of directors 40% 36% of publicly traded companies are 40 years old 35% or younger, and only 6% are between 41 and 50 30% years old (Korn Ferry, 2018). The majority of IOF rs ct o directors (62%) are at least 61. In comparison, r e 20% D i less than half (40%) of the directors for organizations f 14% % o 10% surveyed were older than 60, and just under one 10% quarter of directors (24%) were 50 or younger. 5%

0% 40 and 41 to 50 51 to 60 61 to 70 71 and Younger Older

9 Alongside having younger boards, participating Only six organizations surveyed had at least co-ops and credit unions also distinguished one non-member director. Two co-operatives themselves from IOFs by the absence of a mandatory had no directors with executive-level experience, retirement age for directors. No co-ops or credit and eight co-operatives lacked a director with unions had mandatory retirement, whereas 31% experience in the same industry as the organization. of IOFs do (Korn Ferry, 2018). Finally, the average age of directors was 56. Table 5 summarizes the board demographics of participating 3.8 Summary co-ops and credit unions. The average board size for participating organizations was 12 directors. In terms of gender representation, the boards of most co-ops and credit unions were at least one-third female. Comparatively, they were much less diverse regarding Indigenous and visible-minority representation. Most boards lacked any Indigenous or visible-minority directors.

Table 5: Board Demographics (% of directors) Director Type Average Minimum 25% Median 75% Maximum Directors w/ Executive Exp. 35 0 17 25 53 100 Directors w/ Industry Exp. 34 0 0 17 63 100 Independent Directors 99 86 100 100 100 100 Non-Member Directors 0 0 0 0 0 3 Female Directors 34 0 25 33 44 78 Indigenous Directors 5 0 0 0 0 86 Visible-Minority Directors 4 0 0 0 0 44

10 4. Board Service

As co-operatives become larger and more complex, Table 6: Director Commitment (hours/year) board service becomes more demanding. Effective Average Minimum Median Maximum oversight may require directors to commit upwards of 100 hours per year (Lipton & Lorsch, 1992). Bear 70.5 8 35 405 in mind, this is only an estimate. Good governance is more than just time served. Numerous factors Table 7: General Board Meetings per Year affect board performance, including director Average Minimum Median Maximum expertise, group dynamics, and the quality of 8 4 6 27 information provided by management. For the organizations surveyed, board service Table 8: Average Board Meeting Length (hours) required a median commitment of 35 hours Average Minimum Median Maximum annually (see Table 6). This does not include 9.5 2 8 45 time spent serving on committees or preparing for board meetings. On average, participating co-ops and credit unions held eight board Figure 18: % of Directors Who Are “Busy” meetings per year and these averaged 9.5 hours 1 100% each (see Tables 7 and 8). This is similar to Canadian 2 100% IOFs, which also held an average of eight board 3 100% meetings annually (Korn Ferry, 2018). 4 86% 5 83% 4.1 Busy Directors 6 67% 7 67% On its own, serving on a board requires a significant 8 67% amount of time. This commitment may become 9 63% strained if directors serve on multiple boards. 10 60% Of the 26 co-operatives in the study, three had 11 58% 12 56% boards entirely comprised of busy directors. 13 56% In other words, all of their board members held 14 56% multiple directorships (see Figure 18). Conversely, 15 55% three organizations had no busy directors. 16 50% 17 50% It is important to point out that simply serving 18 50% on multiple boards does not necessarily impair 19 42% a director's effectiveness. Research suggests that 20 36% busy directors may be effective if the firms they 21 25% oversee are somehow similar, such as operating 22 20% in the same industry (Clements, 2015). 23 18% 24 0% 25 0% 26 0% 0 20 40 60 80 100

11 Figure 19: Do Directors Have a Maximum Tenure

4.2 Director Term Limits FigureYes 19: Do Directors Have a Maximum16 Tenure

YesNo 10 Most of the co-ops and credit unions surveyed 16 No 0 5 1010 15 20 25 restricted how long a director could serve before 0 5 10 15 20 25 standing for re-election (85%, n=22). Of those, all but one limited a single term to three years Figure 20: Director Maximum Tenure (years) (95%, n=21). The only organization that did not, Figure 20: Director Maximum Tenure (years) had a four-year term. 1 18 12 15 18 Most co-operatives limited the total number 23 15 of years someone can serve on the board (62%, 34 12 15 45 12 n=16, see Figure 19). Maximum lengths of service 6 12 ranged from seven to 18 years, with an average 5 12 67 12 of 11.4 (see Figure 20 and Table 9). 78 12 9 12 Evidence on the effects of limiting director tenure 8 12 190 12 is mixed. On the one hand, long-serving directors 101 9 12 may become overly friendly with management 112 9 or become out-of-touch with changes to industry, 123 9 technology or regulations. On the other hand, 134 9 limiting director tenure may interfere with board 145 8 9 cohesion and organizational memory, or stunt 156 7 8 directors’ acquisition of firm-specific knowledge. 16 0 5 7 10 15 20 0 5 10 15 20 Interestingly, only 19% of IOFs restrict how long Table 9: Director Maximum Tenure (years) someone can serve on the board (Korn Ferry, Average Minimum Median Maximum 2018). The most common limit is 15 years. 11.4 7 12 18 4.3 Summary

On average, participants had eight board meetings per year, which is the same as Canadian publicly traded companies. Only three co-operatives had no busy directors serving on their boards. Almost two thirds of organizations surveyed had some limit on director tenure. The average maximum length of service was 11.4 years.

12 Figure 21: Compensation per Director (thousand $)

1 166.67 2 105.81 3 77.32 4 66.67 5 65.00 6 61.11 7 60.73 8 57.39 5. Director Compensation 9 51.55 10 50.83 Overall, average pay for directors was $48,380. Table11 10: Compensation45.18 per Director ($) Figure 21 shows compensation levels for participating 12 43.16 Average Minimum Median Maximum organizations. However, this is only an approximation. 13 43.11 Amounts in Figure 21 are based on the survey 14 48,380 36.79 8,123 43,135 166,667 question, “What is the total amount of compensation 15 36.36 received by your board as a whole?” These results To16 get a better33.3 understanding3 of how much directors 17 31.46 received, their base compensation and annual were then divided by the number of directors. 18 30.00 retainer should also be considered. Figure 22 It is unclear how participants calculated total 19 27.70 shows20 the20.0 distribution0 of base compensation compensation. For instance, was Board Chair levels.21 The15.83 highest amount paid was $81,750. compensation included? Regardless of any 22 14.95 imprecision, Figure 21 provides an indication As23 with12.0 total4 compensation, it is unclear how of the range of compensation levels; the highest participants24 8.12 calculated base compensation. 25 * was $166,667, while the lowest was $8,123. For one respondent, it was a combination* Dataof directors’ not provided The median level of compensation was $43,125 annual26 * retainer and the amount received for serving (see Table 10). on one0 committee.50 What others100 did is15 not0 known.200

Figure 21: Compensation per Director (thousand $) Figure 22: Base Director Compensation (thousand $)

1 166.67 1 81.75 2 105.81 2 60.00 3 77.32 3 48.64 4 66.67 4 39.00 5 65.00 5 35.28 6 61.11 6 32.00 7 60.73 7 30.00 8 57.39 8 30.00 9 51.55 9 30.00 10 50.83 10 30.00 11 45.18 11 26.00 12 43.16 12 17.10 13 43.11 13 13.00 14 36.79 14 12.54 15 36.36 15 12.00 16 33.33 16 11.00 17 31.46 17 7.96 18 30.00 18 1.20 19 27.70 19 0.51 20 20.00 20 * 21 15.83 21 * 22 14.95 22 * 23 12.04 23 * 24 8.12 24 * 25 * 25 * * Data not provided * Data not provided 26 * 26 * 0 50 100 150 200 0 20 40 60 80 100

Figure 22: Base Director Compensation (thousand $)

1 81.75 2 60.00 3 48.64 13 4 39.00 5 35.28 6 32.00 7 30.00 8 30.00 9 30.00 10 30.00 11 26.00 12 17.10 13 13.00 14 12.54 15 12.00 16 11.00 17 7.96 18 1.20 19 0.51 20 * 21 * 22 * 23 * 24 * 25 * * Data not provided 26 * 0 20 40 60 80 100 Figure 23 shows the distribution of base retainers Figure 23: Director Retainer (thousand $)

paid to directors. On average, directors received 1 60.00 an $18,030 retainer. The highest retainer paid 2 51.50 was $60,000, while several participants said 3 48.64 their directors did not receive a retainer. If these 4 35.28 co-operatives are removed from analysis, 5 35.00 the average retainer climbs to $30,909. 6 32.00 7 30.00 Looking at other aspects of director compensation, 8 30.00 Tables 11 and 12 show mileage reimbursement 9 30.00 10 26.00 rates and per diem, respectively. Of the co-ops 11 25.00 and credit unions surveyed, four did not reimburse 12 15.80 for mileage. The average reimbursement rate 13 13.00 for those that did was $0.51 per kilometer. 14 0.51 The highest was $0.60, while the lowest was $0.42. 15 0.00 16 0.00 Similarly, not every co-op or credit union paid 17 0.00 directors a per diem. Of the seven organizations 18 0.00 that did, the average per diem was $524. The lowest 19 0.00 per diem was $300, and the highest was $900. 20 0.00 21 0.00 22 0.00 Table 11: Director Mileage Reimbursement ($/km) 23 0.00 Average Minimum Median Maximum 24 0.00 25 * 0.51 0.42 0.51 0.60 * Data not provided 26 * 0 10 20 30 40 50 60 Table 12: Director per Diem ($) Figure 24: Disclose Total Compensation

Average Minimum Median Maximum FigureYes 24: Disclose Total Compensation16 No 9 524 300 500 900 Yes 16 No 0 5 910 15 20 25 0 5 10 15 20 25 5.1 Compensation Disclosure and Review Figure 25: Frequency of Compensation Review The majority of participants disclosed the total amount of compensation paid to their boards FigureEvery 4 mo25:nths Frequency1 of Compensation Review Every year 9 (64%, n=16, see Figure 24). Board compensation Every 4 months 1 Every 2 years 9 was usually reviewed at least every two years Every year 9 Every 3 years 3 Every 2 years 9 (73%, n=19, see Figure 25). It is worth noting that Every 5 years 2 Every 3 years 3 one co-op conducted reviews at random intervals, Random 1 Every 5 years 2 which risks reviews being held either too often Random 0 1 2 4 6 8 10 or too seldom. 0 2 4 6 8 10 Figure 26: Spousal Travel Benefits Provided

FigureYes 26: Spousal6 Travel Benefits Provided No 20 Yes 6 No 0 5 10 15 2020 25 0 5 10 15 20 25 Figure 27: Reduced Fees Provided

14 FigureYes 27: Reduced6 Fees Provided No 20 Yes 6 No 0 5 10 15 2020 25 0 5 10 15 20 25

Figure 28: Product/Service Discount Provided

FigureYes 28: Product/Service5 Discount Provided No 21 Yes 5 No 0 5 10 15 20 21 25 0 5 10 15 20 25 Figure 29: Medical or Other Insurance Provided

FigureYes 29: Medical or Other10 Insurance Provided No 16 Yes 10 No 0 5 10 15 16 20 25 0 5 10 15 20 25 Figure 30: Life Insuance Provided

FigureYes 30: Life Insuance Provided15 No 11 Yes 15 No 0 5 10 11 15 20 25 0 5 10 15 20 25 Figure 24: Disclose Total Compensation

FigureYes 24: Disclose Total Compensation16 No 9 FigureYes 24: Disclose Total Compensation16 No 0 5 910 15 20 25 Yes 16 0 5 10 15 20 25 FigureNo 24: Disclose Total9 Compensation FigureYes 0 24:25: DiscloseFrequency5 Total1 of0 Compensation Compensation15 16 2 Review0 25 No 9 YesEvery 4 months 1 16 Figure0 25: Frequency5 1 of0 Compensation15 2 Review0 25 No Every year 9 9 Every 4 months 1 FigureEvery 25:2 years Frequency of Compensation Review9 0 Every year 5 10 15 20 9 25 EveErvye 4ry mo 3 yenthsars 1 3 Every 2 years 9 FigureEveErvy e 25:5ry ye years arFrequency2 of Compensation Review9 Every 3 years 3 EveryRand 2 yeoarsm 1 9 FigureEveErvye 4ry mo 25:5 yenthsars Frequency1 2 of Compensation Review Every 3 years 3 EvRandery yeomar 0 1 2 4 6 8 9 10 EveErvye 4ry mo 5 yenthsars 1 2 Every 2 years 0 2 4 6 8 9 10 Every year 9 EveryRand 3 yeoarsm 1 3 Every 2 years 9 FigureEvery 26:5 years Spousal0 2Travel2 Benefits4 6 Provided8 10 Every 3 years 3 FigureYes Rand 26:o m Spousal6 1 Travel Benefits Provided Every 5 years 2 No 0 2 4 6 208 10 FigureYes Rand 26:o m Spousal6 1 Travel Benefits Provided 0 5 10 15 20 25 No 0 2 4 6 208 10 Yes 6 0 5 10 15 20 25 FigureNo 26: Spousal Travel Benefits Provided20 FigureYes 0 27:26: Reduced Spousal5 6 TravelFees10 Provided Benefits15 Provided20 25 Figure 31: Board Chair Compensation (thousand $) No 20 FigureYes 27: Reduced6 Fees Provided 1 3,005.91 No 0 5 10 15 2020 25 FigureYesNo 27: Reduced6 Fees Provided 20 2 300.00 No 0 5 10 15 2020 25 3 265.00 Yes 6 4 150.00 0 5 10 15 20 25 FigureNo 27: Reduced Fees Provided 20 5 100.00 FigureYes 0 27:28: ReducedProduct/Service5 6 Fees10 Provided Discount15 Provided20 25 6 80.00 No 20 7 77.08 Yes 6 FigureYes 0 28: Product/Service55 10 Discount15 Provided20 25 8 73.50 No 20 No 21 9 63.28 FigureYes 28: Product/Service5 Discount Provided 0 5 10 15 20 25 10 60.00 No 0 5 10 15 20 21 25 Yes 5 11 60.00 0 5 10 15 20 25 FigureNo 28: Product/Service Discount Provided21 12 40.00 FigureYes 0 28:29: Product/ServiceMedical55 or1 Other0 Discount Insurance15 Provided Provided20 25 13 40.00 No 21 14 36.78 FigureYes 29: Medical or Other10 Insurance Provided Yes 5 15 33.60 No 0 5 10 15 16 20 25 FigureYesNo 29: Medical or Other10 Insurance Provided21 16 32.10 0 5 10 15 20 25 No 0 5 10 15 16 20 25 17 30.00 Yes 10 0 5 10 15 20 25 18 24.00 FigureNo 29: Medical or Other Insurance16 Provided Figure 30: Life Insuance Provided 19 20.50 FigureYes 0 29: Medical5 or1 Other010 Insurance15 Provided20 25 20 20.00 FigureYesNo 30: Life Insuance Provided15 16 21 20.00 Yes 10 No 0 5 10 11 15 20 25 22 14.40 FigureYesNo 30: Life Insuance Provided15 16 0 5 10 15 20 25 23 11.92 No 0 5 10 11 15 20 25 Yes 15 24 1.82 0 5 10 15 20 25 FigureNo 30: Life Insuance 11Provided 25 0.51 5.2 Director Benefits * Data not provided FigureYes 0 30: Life5 Insuance10 Provided1515 20 25 26 * InNo terms of benefits received,11 most organizations 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Yes 15 surveyed0 did5 not cover10 spousal 1or5 partner20 travel 25 No 11 (77%, n=20, see Figure 26). Similarly, the majority Table 13: Board Chair Compensation* ($) 0 5 10 15 20 25 of co-ops and credit unions did not provide directors Average Minimum Median Maximum with reduced fees (77% n=20, see Figure 27), product or service discounts (81%, n=21, 64,770 506 38,390 300,000 see Figure 28), or medical or other insurance * This is excluding the highest compensation of $3,005,910 (62%, n=16, see Figure 29). Most organizations did, however, provided directors with life insurance It is worth mentioning that this co-operative (57%, n=15, see Figure 30). was the only one surveyed where the CEO served as both the Chief Executive and the Board Chair. 5.3 Board Chair Compensation If the $3 million is removed from analysis, The highest compensation paid to a Board Chair the average compensation for the Board Chair was $3,005,906 (see Figure 31). This is ten times is $64,470 (see Table 13). This is less than a quarter more than the next highest amount of $300,000. of the $291,385 that the Board Chairs of Canadian This is because the Board Chair with the highest IOFs receive, on average (Korn Ferry, 2018). compensation is also the CEO of their co-operative. The pay differential is not unexpected (nor limited The publicly disclosed $3 million figure is the to Board Chairs), given the differences between chief executive’s salary. This individual receives co-operatives and IOFs, such as the latter’s ability nothing for their role as Board Chair. to use equity-based compensation.

15 Figure XX: Committees Figure 32: Board Committees 5.4 Committee Compensation

Mem. Relations Compensation Environmental Compensation Environmental Audit/finance Audit/Finance Governance Nominating Resolutions Governance Nominating Resolutions All participating co-ops and credit unions had Executive Relations Executive

Ethics Ethics an audit/finance committee (see Figure 32). CSR CSR HR HR Most had a governance committee (92%, n=24), a human resources (HR) committee (65%, n=17), and a nominating committee (62%, n=16). Although directors were usually paid for chairing a committee, serving as a committee member was mostly uncompensated. Looking at the four most common committees (audit/finance, governance, HR and nominating), chairs were compensated 76% of the time, whereas members were only compensated 30% of the time. Figure 33 shows what percentage of survey participants compensated committee chairs and members. For those organizations that paid for committee service, the average extra compensation received by committee chairs was $5,518. For committee members, average extra compensation was $1,174. Focusing on the four most common committees, the average extra compensation received by audit/ finance committee chairs was $6,134. For committee members, average compensation was $1,657 (see Table 14).

Figure 33: % of Co-ops that Compensated For the governance committee, the average extra for Committee Service compensation for committee chairs was $5,173 (see Table 15). For committee members, Audit/Finance Committee (%) the average was $1,738. Committee chair 76 Committee member 32 Table 14: Audit/Finance Committee (Compensation $) 0 20 40 60 80 100 Role Average Min. Median Max. Governance Committee (%) Chair 6,134 160 6,000 15,000 Committee chair 63 Committee member 29 Member 1,687 400 1,500 4,000 0 20 40 60 80 100 Table 15: Governance Committee (Compensation $) HR Committee (%) Committee chair 82 Role Average Min. Median Max. Committee member 29 Chair 5,173 160 5,000 10,000 0 20 40 60 80 100 Member 1,738 400 1,500 4,000 Nominations Committee (%)

Committee chair 81 Committee member 31 0 20 40 60 80 100

16

Figure 28: Audit/Finance Committee (% compensated)

Committee chair 76 Committee member 32 0 20 40 60 80 100

Figure 29: Governance Committee (% compensated)

Committee chair 63 Committee member 29 0 20 40 60 80 100

Figure 30: HR Committee (% compensated) Committee chair 82 Committee member 29 0 20 40 60 80 100

Figure 31: Nominations Committee (% compensated)

Committee chair 81 Committee member 31 0 20 40 60 80 100 Continuing with the organizations that paid for Comparing co-operatives and IOFs is not entirely committee service, average HR committee chair fair, however. The compensation gap between compensation was $4,671 (see Table 16). For HR the two types of organizations is partially due committee members, the extra compensation to publicly traded companies being able to offer for committee service was $1,858, on average. equity to directors. If mandatory shares are removed, the average retainer falls to $86,370 Lastly, nomination committee chairs received (Korn Ferry, 2018). While this narrows the gap, an average of $4,699 in extra compensation for there is still a significant difference between their service, while committee members received co-operatives and IOFs. $1,958 (see Table 17). What is important to recognize is that when it comes Table 16: HR Committee (Compensation $) to attracting skilled or experienced directors, Role Average Min. Median Max. co-operatives may not be able to compete with IOFs Chair 4,671 160 5,000 10,000 on compensation alone. What co-ops must do Member 1,858 400 1,500 4,000 is attract individuals who identify with member- ownership and the seven co-operative principles Table 17: Nomination Committee (Compensation $) (see Appendix A for the list of principles). Role Average Min. Median Max. In other words, co-ops and credit unions must Chair 4,699 160 4,480 10,000 play upon those things that make them unique. Member 1,958 900 1,500 4,000 5.6 Summary

5.5 Comparison to Publicly Traded Companies Roughly calculated, the average director received $48,380 in total compensation. Within that amount, Relative to surveyed organizations, IOF boards co-operatives and credit unions paid an average are better compensated. At medium-sized Canadian retainer of $18,030, although ten of the co-ops publicly traded companies with assets between surveyed paid no retainer at all. Interestingly, $3.5 billion and $10 billion, directors earned an the benefits provided to directors were limited. average retainer of $166,315 (Korn Ferry, 2018). Most participants did not cover spousal or partner This includes cash and shares. Board Chairs earned travel, or provide product or service discounts, $321,950. Committee chairs received additional reduced fees, or medical insurance. compensation of $18,163, and committee members received $7,860. Table 18 compares co-ops and IOFs.

Table 18: Average Compensation ($) Role Co-operative Small IOF Board Chair 182,416 321,950 Member (retainer) 18,030 166,315 Committee Chair 5,518 18,163 Committee Member 1,774 7,860

17 This page is intentionally blank.

18 6. Delegate Compensation

Only 13 co-operatives had delegates (see Table 19). Table 19: Participants with Delegates Of those, the average number of delegates was 188 (see Figure 34). Most co-operatives paid their Federated Co-ops Ltd. delegates (62%, n=13, see Figure 35). Agrifoods International Gay Lea Foods Co-operative Agropur Kawartha Credit Union Only six co-operatives answered the question, “What is the total amount of compensation Arctic Co-op Libro Credit Union received by all of your delegates combined?” Atlantic Central Manitoba Central Based on their answers, the average compensation Co-operators United Farmers of Alberta received by delegates was $1,188 (see Figure 36). Desjardins Looking at the individual aspects of compensation, Figure 34: Number of Delegates Figure 34: Number of Delegates two co-operatives paid delegates per meeting 1 1,128 1 1,128 21 325 1,128 fees of $100 and $225. One co-op paid delegates 2 325 32 303205 an honorarium of $1,196, and two reimbursed 3 300 43 180 300 4 180 delegates for orientation, $270 and $300 respectively. 54 121180 5 121 65 101201 Most participants reimbursed delegates 6 100 76 7109 0 7 79 for mileage (77 percent, n=10). Table 20 shows 87 6729 8 62 information about mileage rates. Three co-ops 98 62 9 62 reimbursed delegates for training, paying an average 109 3692 10 39 of $1,423. One co-operative compensated delegates 1110 2329 11 22 Consumer or multi-stakeholder co-ops 1211 202 Consumer or multi-stakeholder co-ops for time spent in meetings on behalf ProducerConsumer co-ops or multi-stakeholder co-ops 12 20 13 8 Producer co-ops of the co-op, paying $35 per hour. 13 8 13 0 8 200 400 600 800 1000 1200 Only three of the 13 co-ops and credit unions 0 200 400 600 800 1000 1200 with delegates compensated delegates for spousal Figure 35: Does the Co-op Pay Delegates or partner travel. No delegates were paid a retainer, Figure 35: Does the Co-op Pay Delegates Yes 8 and no co-operative compensated delegates for Yes 8 YesNo 5 8 meeting preparation. No 5 No 0 2 4 5 6 8 10 0 2 4 6 8 10 6.1 Summary 0 2 4 6 8 10

The data collected on delegate compensation Figure 36: Compensation per Delegate ($) Figure 36: Compensation per Delegate ($) are not as robust as what were collected on director 1 2,048 1 2,048 12 1,568 2,048 compensation. This is partially because only half 2 1,568 23 1,481,561 8 of the co-ops that participated in the survey actually 3 1,481 34 1,111 1,481 4 1,111 have delegates. It could also be that co-ops keep 45 875 1,111 5 875 better records on directors than they do on delegates. 56 47 875 6 47 6 0 47 500 1000 1500 2000 2500 0 500 1000 1500 2000 2500 Table 20: Delegate Mileage Reimbursement ($/km) Average Minimum Median Maximum 0.48 0.42 0.49 0.55

19 This page is intentionally blank.

20 7. Conclusion and Recommendations

Overall, for the aspects of corporate governance In the end, the question of what constitutes examined in this report, co-operatives appear “good governance” in a co-operative may come strong, at least relative to publicly traded companies. down to the dynamics around the boardroom Compared to IOFs, the co-ops and credit unions table. Are directors able to effectively challenge had more independent boards with higher female management, operate cohesively, encourage representation. Moreover, co-op boards were competing views of the future, and solicit younger than those of IOFs. The age of co-op vigorous, non-confrontational dialogue? boards could be an issue if directors do not have suitable skills and experience. But more than one The findings from the survey do not tell that story. quarter of the organizations surveyed had boards However, by looking at the structural features of that were primarily composed of directors with co-operative boards—their size, demographics, executive-level experience, so the assumption compensation, and practices—this report provides is that the requisite skills are present. insight into how co-ops and credit unions can nurture effective boards. It also allows co-operatives to see In terms of director compensation, equity schemes how their corporate governance compares to that place IOF compensation levels at four times what of their peers. participants in this survey paid their directors. This may be of some concern, especially if co-ops and IOFs are looking in the same talent pools for potential directors. Attracting high-quality directors is not simply a function of remuneration, however. Individuals may be willing to sit on a co-op’s board if they believe in its mission, even if they would be better compensated overseeing an IOF (Besley & Ghatak, 2003). Potential directors found in a co-op’s membership may already be attached to its mission and the seven co-operative principles (Birchall & Simmons, 2004). If looking for non-member candidates, however, it may be trickier to find individuals who strongly identify with the co-op, or with the benefits of member-ownership. This is not to dissuade co-operatives from looking for non-member directors. It simply means they may have to look a little harder to find suitable individuals (or be prepared to pay more).

21 This page is intentionally blank.

22 References

Besley, T., & Ghatak, M. (2003). Incentives, choice, and accountability in the provision of public services. Oxford Review of Economic Policy, 19(2), 235–249. Birchall, J., & Simmons, R. (2004). What motivates members to participate in the governance of consumer co-operatives? A study of the Co-operative Group. University of Stirling. Clements, C., Neill, J. D., & Wertheim, P. (2015). Multiple directorships, industry relatedness, and corporate governance effectiveness.Corporate Governance: The International Journal of Business in Society, 15(5), 590–606. International Co-operative Alliance. (2005). Co-operative identity, values & principles. Retrieved from http://ica.coop/en/whats-co-op/co-operative-identity-values-principles Jensen, M. C. (2010). The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems. Journal of Applied Corporate Finance, 22(1), 43–58. Konrad, A. M., Kramer, V., & Erkut, S. (2008). Critical Mass: The Impact of Three or More Women on Corporate Boards. Organizational Dynamics, 37(2), 145–164. Korn Ferry. (2018). Corporate Board Governance and Director Compensation in Canada. Korn Ferry. Lipton, M., & Lorsch, J. W. (1992). A modest proposal for improved corporate governance. The Business Lawyer, 48, 59–77. Spencer Stuart. (2019). 2018 Canada Spencer Stuart Board Index. Spencer Stuart. Statistics Canada. (2019). Study: Representation of Women on Boards of Directors, 2016. Statistics Canada. Torchia, M., Calabrò, A., & Huse, M. (2011). Women directors on corporate boards: From Tokenism to critical mass. Journal of Business Ethics, 102(2), 299–317.

23 This page is intentionally blank.

24 Appendix A: Seven Co-operative Principles

The International Co-operative Alliance (2015) advocates seven principles to guide co-operatives in their operations. 1. Voluntary and Open Membership

Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. 2. Democratic Member Control

Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner. 3. Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership. 4. Autonomy and Independence

Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy. 5. Education, Training and Information

Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public — particularly young people and opinion leaders — about the nature and benefits of co-operation. 6. Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures. 7. Concern for Community

Co-operatives work for the sustainable development of their communities through policies approved by their members.

25 Canadian Centre for the Study of Co-operatives 196 Diefenbaker Building, University of Saskatchewan, Saskatoon SK, S7N 5B8 (306) 966–8509 http://www.usaskstudies.coop