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Research article2020Peer reviewedOpen access

The Logic behind the Internal Governance of Sweden's Largest Agricultural Cooperatives

Hakelius, Karin; Nilsson, Jerker

Abstract

This study comprises a qualitative analysis of the governance structures within the two largest agricultural cooperatives in Sweden, both of which have large and heterogeneous memberships, as well as sizeable and complex business operations. Interviews were conducted with district council members and representatives from the boards of directors. The data from both case cooperatives indicate a genuinely traditional democratic member governance structure. There is a great deal of social capital in the governance system. A tentative explanation of the member involvement is that the cooperatives' equity capital is owned by the individual members, and the members are free to sell and buy their shares at a market rate. The members are satisfied with the return on the capital they have invested in the cooperatives. They receive bonus shares and dividends above what most members would get in other investments. A conclusion is that very large cooperatives may succeed well with a member-democratic governance system of the traditional cooperative type, which in this case is probably due to the members' satisfaction with the individualized ownership of the cooperatives.

Keywords

hybrid cooperative; agency costs; social capital; dividend; bonus share; preferred shares; board of directors

Published in

Sustainability
2020, Volume: 12, number: 21, article number: 9073Publisher: MDPI

      SLU Authors

      • Sustainable Development Goals

      SDG16 Peace, justice and strong institutions

      UKÄ Subject classification

      Economics

      Publication identifier

      DOI: https://doi.org/10.3390/su12219073

      Permanent link to this page (URI)

      https://res.slu.se/id/publ/109363