Tuesday 8th November 2016 – “As the co-operative sector seeks further expansion opportunities and also copes with serious fallout from the Brexit decision, it must continue to promote a strategic vision and clear leadership in the interests of co-operative members,” said Martin Keane, President of the Irish Co-operative Organisation Society (ICOS), at the 40th ICOS National Conference at the Convention Centre in Dublin today.
“Strategy formulation underpinned by strong corporate governance, compliance and communications are key functions and responsibilities which co-operative Board members need to promote as the leaders of their industry,” said Mr. Keane.
The conference was attended by co-operative leaders from all over Ireland, including the main dairy processing co-operatives and national co-operative livestock marts.
“Irish co-operatives are working in an intensely competitive, volatile and globalised marketplace. While they have been well served by elected farmer directors to date, the increasing complexity of operations including the competitive environment and regulation necessitates a continual focus on skills development to ensure that Boards can meet all of their responsibilities.”
The conference had a top line-up of Irish and international speakers including Agriculture Minister Michael Creed, T.D.; The Canadian Ambassador, Kevin Vickers; US Department of Agriculture Rural Sociologist, Tom Gray; Corporate Enforcement Director Ian Drennan and Conor Gouldson, Company Secretary of FBD Holdings plc, among others.
“Irish co-operatives are large and complex operations, with revenues in the hundreds of millions and in many cases, billions of euros. The role of a director in any company is difficult and complex. In a co-operative it is even more complex, given the ownership and democratic control structure as well as a shared economic goal to promote the collective long term benefit of members.”
“Farmer directors can’t be expected to be experts across the regulatory framework on the day they are elected or assume the role, but they do become responsible, so we need to ensure they are familiar with and can discharge those responsibilities. This is essential to enable their co-ops to compete effectively with public and private companies who populate their boards with professional independent directors.”
“The Compliance function is the key headline responsibility for co-operative directors including legal responsibilities and awareness of the regulatory regime applying to co-operatives. This is really important where co-ops have subsidiaries or joint ventures which in many cases are registered as private companies with different compliance requirements.”
“Equipped with the right skills, co-operative boards need to ask themselves whether they are spending enough time and effort assessing the organisation’s long term strategy. That is because the strategic challenges facing our co-operatives are substantial and growing.
“The dairy sector is in the middle of dramatic cyclical volatility in prices. This is damaging for the family farming model, it undermines confidence among current and future milk suppliers and it damages the prospects for dairy among our food industry customers.
“We are now faced with planning our business around possibly the greatest challenge of all – how do we insulate ourselves from the worst effects of a Brexit process, when even the instigators of that process seem to have no idea what Brexit means, or how to achieve it?
“The challenges are similar on the livestock side, with unfair practices along the chain and a supplier base which operates at a loss and would be largely out of business without EU payments. We are also faced by sustainability challenges, in terms of climate change and water quality and we have a supply chain characterised by the increasing strength of the retailer.”
“Communications, which can also be seen as leadership or representation, is an essential factor for co-op boards where the long term interests of members, perhaps numbering in the thousands, must be promoted and protected, even if that means unpopular decisions to ensure the ultimate sustainability of the business. It is also essential for boards to remain engaged with the wider co-op and its representative structures.
“This challenge is particularly important when we are welcoming younger farmers into the industry. While deeply committed to their farming enterprises, they may have different expectations of their co-operative as a business partner and may also not have the time to commit to being part of representative structures within the co-op sector.
“We need to reach out to this generation who are the future of our industry, including communication, engagement and training structures which will bring them firmly into the co-op structure, creating the next cohort of co-op leaders.
Martin Keane highlighted the work of The Plunkett Institute for Co-operative Governance, which is dedicated to the establishment and best practice of co-operative governance in Ireland. The Institute’s principal focus is on the elected members of Boards of ICOS Co-operatives, and Board officers.
“ICOS is committed to working with Co-ops to develop and deliver programmes aimed at strong governance, and member engagement. We are currently either running, or preparing to run 6 different training and development programmes for various co-ops, providing training across a range of business disciplines, to allow directors or aspiring directors to more fully understand and develop their competencies in their roles,” he concluded.
ICOS represents over 130 co-operatives in Ireland – including the Irish dairy processing co-operatives and livestock marts – whose associated businesses have a combined turnover in the region of €14 billion, with some 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas.
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