Article 4 of the Organic Law on Popular and Solidarity Economy (LOEPS) establishes the principles governing cooperatives, including democratic control by members, equitable economic participation, and institutional autonomy. These principles constitute the axiological foundation on which the cooperative governance structure is built, characterized by voluntary membership, non-discrimination, and common ownership of capital.
Cooperative governance is configured as a set of institutions and rules designed to facilitate the fulfillment of social purposes, preventing conflicts within the core group of members, representatives, directors, and management. Unlike corporate governance, which is oriented toward the protection of shareholders and investors, cooperative governance seeks the effective enforcement of cooperative values and principles, guaranteeing the rights of participation, transparency of information, and voice and vote of the members.
Cooperative governance and management
Cooperative governance involves the ability to interrelate and balance internal bodies: the General Assembly, Board of Directors, Supervisory Board, and Management. This balance is essential to protect the interests of members and ensure institutional stability. The fundamental requirements for its viability are legitimacy, effectiveness, and adherence to the rule of law.
Governance, for its part, studies the mechanisms by which strategic decisions are made and executed, determining the actors involved and the accountability processes. In the cooperative sphere, transparency is an inherent obligation of leaders, administrators, and officials, whose failure to comply leads to a loss of credibility and the consequent weakening of the institution.
Recurring problems and guidelines for improvement:
Experience shows common problems in cooperative management: inefficient communication between the Board of Directors and Management; unclear roles; insufficient participation by the General Assembly; lack of accountability mechanisms; and conflicts of interest between members and managers. These shortcomings undermine the identity of the grassroots with the cooperative and can lead to abuse of power.
The recommendations of multilateral organizations such as the OECD, applicable to the cooperative sector, emphasize: respect for the rights of members and their equitable treatment; clear delineation of administrative functions and responsibilities; transparency and completeness of information; and effective communication with stakeholders. In addition, ongoing education in cooperative values, transparent electoral mechanisms, and the formation of committees to promote member participation are required.
In summary, good cooperative governance requires an organizational structure that harmonizes the powers of its internal bodies, ensuring genuine representation of members and the adoption of assessable administrative policies. Only by following these guidelines can the cooperative fulfill its mission of sustainable community development, based on trust, transparency, and institutional integrity.
