Author: admin

(First published 28/2/2013)

I’ve always been fascinated by Political Economy, to the extent that I did a Masters Degree in it at Sheffield University. I came away from that experience wanting to challenge the bi-polar conception of the economy that underpins so many of our preconceptions of how the world is run (i.e. the model that says that the State is the mechanism for delivery of public goods and the Market delivers everything else).  Yet nowhere could I find a reason why the market mechanism couldn’t be used to deliver public goods with the same benefits as the state and all the efficiency of a private company. For me, this comes down to the issue of ownership. Sure, the market fails to deliver public goods if all the organisations that operate in it are owned by investors that see profit as the only reward for risk and pursue profit-maximisation.  But there is no reason for this to have to be the case – what if some of those organisations are owned by investors pursuing other goals?

Essentially I would argue that profit is one of several https://valiumsedative.com/how-to-get-quality-prescription-diazepam-online/ rewards for risk, not the only one. Moreover in the real world, people invest for many reasons and there are many forms of investment. People may invest (whether financially or in terms of time and effort) because they want to see social value created, not pure profit. They may invest to protect their own futures and so that they can have a greater say in shaping their lives. They may invest as consumers of a service, simply to provide a form of support for the wider aims of the organisation they invest in.

Once this point is recognised, we can see that the problem of market failure lies not with the Share Capital company per se. Rather what counts is who the owners of the Share Capital company are, and indeed what drives them. Acknowledging this fact, led me to set up ESP Projects, a Social Enterprise using the share capital model but which is nevertheless owned jointly by private investors, staff and its third sector customers. FairShares is for me both an extension and a formalisation of this multi-stakeholder approach and I support it wholeheartedly!

(First published 1/2/2013)

The keynote speakers at yesterday’s Co-operatives Yorkshire & Humber AGM sounded notes of both caution and optimism about the next stage of co-op development.    The caution related to Co-operative Councils and the use (perhaps abuse) of the term ‘co-operative’ to help them through the current programme of austerity.  This was tempered by news from different parts of the country that there are new initiatives to develop member- (i.e. public-) led service delivery.  With a number of co-op councillors present, keynote speakers were not shy in outlining opportunities for co-operative development with Local Authorities.

Derek Walker from the Wales Co-operative Centre highlighted a bill making its way through the Welsh Assembly that includes a duty to provide a co-operative social care organisation in every region of Wales.   Laurie Gregory from the Foster Care Co-operative highlighted how their approach gives the recipients of care membership and voting rights in the organisation that provides their care.  Furthermore, patient / family member contributions towards care can supplement state funds to improve the quality of care for all.  Astonishingly, no other care organisation in the UK has this arrangement – not even the widely praised (employee-owned) Care and Share Associates (CASA).

Towards the end of his key note, Laurie called the co-operative ‘a cracker of a model’.  This theme also permeated the workshop on the FairShares Model, a new initiative by six educators and consultants to encourage multi-stakeholder (solidarity) co-operatives that include both producers and consumers as members.  Based on what works in practice, the FairShares Model draws on existing examples of power and wealth sharing.  During the workshop, participants learnt about the Bank of the People’s Labour in Mondragon (1/3 worker controlled, 2/3rds consumer controlled), its university (1/3 controlled by students, 1/3 by staff and 1/3 by supporters) and Eroski, the fastest growing retail chain in Spain (1/2 controlled by consumers, 1/2 by producers).

Closer to home, there were discussions of Stakeholder Model Ltd, developed by Geof Cox, which enfranchises people through stewardship, partnership and investment shares.  We discussed theNewCo Model (developed by Morgan Killick at ESP Projects Ltd with support from Sheffield’s Community Economic Development Unit).  Alan Dootson commented that it enabled a co-operative social enterprise to get a ‘flying start’ by allowing customers to collectively invest in the service they needed.  Over time, customers decrease their holdings to allow the workforce to increase theirs, while founders retain holdings that reflects their entrepreneurial efforts.  Similar ideas have been embedded in Rory Ridley-Duff’s ‘surplus sharing’ social enterprise model.  The authors of all these three models have been joined by consultants Nicci Dickins (MIH Consultancy Ltd), Cliff Southcombe (Social Enterprise Europe Ltd) and Emma Green (Co-operative and Social Enterprise Support Ltd) in a new organisation to further develop their ideas.

The FairShares Model is now supported by the FairShares Association.  It was formally launched at the CYH AGM by Rory Ridley-Duff and Emma Green.  Together with Cliff Southcombe, they have incorporated the UK’s first FairShares Company.  Around the table (or, more precisely, in the circle of chairs) there were representatives from Co-operatives UK, Key Fund, Charity Bank, Co-operative Group and Doncaster Council.  Questions focussed on the apparent complexity of FairShares and whether it would be attractive to traditional supporters of co-operatives and social enterprises.

In response, Rory and Emma stressed how the model documents the practices of successful UK co-operatives and employee-owned businesses (John Lewis, Scott Bader, Gripple, School Trends).  Each developed a group structure and governance model that combines trading enterprises (directly / indirectly owned by members)  with secondary mutuals that receive and distribute surpluses for employee, community and public benefit.  This approach is embedded in the FairShares Model.  It even allows a single-person to start an enterprise and develop it over 5 – 10 years into a multi-stakeholder co‑operative enterprise without ever having to change Articles of Association.  This saves tens (even hundreds) of thousands of pounds in legal fees.

Another series of questions (prompted by discussions of public sector spin outs) focussed on provisions to resist takeovers by private firms and dissolutions by local authorities.  In this case, the  one-person, one-vote model of governance for regular decision-making was contrasted with special resolutions needed to sell or wind-up a FairShares Enterprise.  To pass a special resolution, each stakeholder group (founders, employees, service users and investors) have to secure a majority, in addition to a 75% majority overall.  This gives FairShares Enterprises a better defence mechanism than Building Societies and Bus Companies had in the 1980s/90s.

All in all, it was a good day – plenty to think about.

(First published 30/1/2013)

At the heart of the FairShares Model are three social entrepreneurial challenges: ethical trading; social purpose; and democratic control.  In this blog, I’m going to talk about the challenge presented by the third of these – democratic control.

The founder members of the FairShares Association were faced with a number of decisions in the run up to its formal launch.  We needed to agree whether or not to incorporate the association, whether to start offering subscription options to supporters, and how to proceed with a volunteering scheme.  But we had a challenge.  One founder (Cliff Southcombe) was doing work for the British Council in Africa, another (Geof Cox) was working on projects in France, three of us (Emma Green, Morgan Killick and myself) were in Sheffield, but all in different places, and the last of us (Nicci Dickins) was in Stockport, near Manchester. 

How can we make decisions when – as Cliff has put it – we’re often not in the same country, let alone the same city or room?

No worries.  We hold all our files on DropBox.  Wherever we are, we can all access documents as if we were on a local network.  In fact, it is better than a local network because DropBox makes copies of all files locally – they load and save faster than a local area network, and the uploading/downloading from the Cloud occurs seamlessly behind the scenes.  So, preparing and sharing information before decisions are made is now straightforward.

But how do we reach a decision or consensus?  A few months ago my daughter got fascinated by the US elections.  On election night we watched the results come in by internet as well as the TV.  On the internet site, I learned that it is not just the president that people vote for.  In each state, local referenda take place.  In the UK, our politicians get apoplectic if ‘the people’ get the chance of one referendum in a generation.  In the US, voters not only elect a president and members of each house, but also get a series of votes on state laws.

That gave me an idea.   Why not use SurveyMonkey to ensure that ‘the people’ can make decisions prepared by a governing body?  The free SurveyMonkey account allows you to ask up to 10 questions – more than enough for the needs of most governing bodies in a single meeting.  There is a bit of preparation needed, of course, the issues and a summary of known arguments need to be put into a survey instrument.  A basic degree of computer literacy is needed to send out the survey with a covering e-mail, and it does depend on your membership using e-mail (which is highly dependant on their socio-economic context).  None of these challenges are insurmountable, however, particularly to people whose job includes the routine preparation of material for board meetings.  With the help of social enterprises assisting digital access, internet access is more available than ever.  And, with the arrival of affordable tablets and smart phones, it is even possible take instant votes in meeting after the alloted amount of time for debate (not tried that yet, but there is a twinkle in my eye at the possibility!).

I’ve already used this approach to support member-led decision-making at Co-operatives Yorkshire & Humber.  We broke down a Co-operatives UK proposal into its constituent parts and asked members to indicate which sub-proposals they would support.  If they did not support a sub-proposal, they could say what would need to change before their support would be secured.  Those suggestions then went forward into negotiations with Co-operatives UK.

At the FairShares Association, we had a different challenge.  We didn’t have firm proposals to vote for on a yes/no basis.  We had a series of questions and options.  With SurveyMonkey set up – we expressed our preferences.  We had 6/6 votes to set up an unincorporated co-operative association.  This implements the FairShares Model, but outside Company and Cooperative Law.  It delays incorporation until there is a specific need for it.  We has 4/6 votes in favour of not taking donations and subscriptions until we have thought through the pros and cons of different income generation schemes.  We want to develop our social enterprise plan first.  Lastly, we has 6/6 votes in favour of asking a PhD student at Sheffield Hallam who is interested in volunteering for the association to develop a volunteering policy/proposal on which we can vote in future.  In one case, we offered two options, but in two cases we offered three (to reflect the debates that had taken place beforehand).  It seemed to work – even if only to eliminate options that nobody supports.  In the future, we can explore the benefits of ranking options rather than choosing just one (the equivalent of an on-line ‘transferrable vote’ to developing a consensus).

So – are you using SurveyMonkey (or another survey system) to facilitate participatory management and democratic governance?

(First published 27/1/2013)

This weekend has been taken up with testing this website in preparation for the Co-operatives and Humber Annual General Meeting in Leeds next week.  At the CYH AGM, we’ll be running a workshop on FairShares in which we will start to invite applications for membership.  

It has been fun testing the facilities for donations and subscriptions by PayPal, but founders are not yet convinced that a paid subscription scheme is appropriate for the association.  Feel free to explore the website and find out more about FairShares at the FairShares Wiki.

The next blog entry will provide further details of our membership offer to consultants and educational institutions.