This result occurs because outside investors or joint venture partners focus more on financial returns of the business and less on meeting the needs of members- a conflict difficult to overcome. John Tyrell, Director General of the Irish Cooperative Organization Society, shared the experience of the Irish dairy cooperatives forming plc subsidiaries. Its been nearly 10 years since the six cooperatives have formed plcs. No others have stepped forward because they consider that too many questions remain about whether the other cooperatives have made the right choices. While current members significantly increased share wealth commensurate with market value of the cooperative, the question is how then next generation of members will control the cooperative and benefit from it.
Boards can improve their governance system and improve business at the same time.
An efficient and effective governance structure will consider returns on management time, return on board time, organizational stability and leadership. Sophisticated but direct communication with members about the cooperative s direction as well as the cooperative's value to members will be required. Complexity in business is not going away. Board members need to define the strategic direction for the cooperative, determine the success factors in their sectors, and ensure resources are provided and performance is monitored. That means governance will become more and more important, and Boards will be held more accountable for their decisions and actions.