On August 19, many of the leaders of the nation’s largest businesses sent a press release announcing that they had signed a “joint statement of purpose for corporations” that indicates these types of businesses should benefit stakeholders beyond only their core constituency: institutional investors. As a member of the cooperative community, I read this statement with some optimism, curiosity, and a dose of cynicism: Optimism because it is good to see more of the business community joining cooperatives in realizing the need for businesses to help create a more inclusive economy; curiosity as I wondered why it took so long; and cynicism because I doubt that the C-Corporation model is an effective vehicle for this goal given the overwhelming policy environment that suggests the continued priority toward institutional investors.
Those considering the interests of a broader array of stakeholders need look no farther than the cooperative business model, which includes big and small businesses across many sectors, such as agriculture, utilities, and finance (credit unions). These businesses are owned, controlled, and benefit the people who use the business. Because of this, cooperatives tend to keep more wealth local and reflect the values of the people who use the business – rather than institutional investors. Fully one in three Americans are members of cooperatives and credit unions. Farmers looked to this business model when they lost access to markets when agriculture became more industrialized in the early 20th century – and many of the best-known and most innovative food companies today continue to be owned and controlled by farmers, such as Ocean Spray, Land O’Lakes, and Blue Diamond. Rural people looked to the cooperative business model to help bring electricity to the farther reaches of this country when for investor-owned utilities refused – today rural electric cooperatives power over 56% of the nation’s land mass and over 19 million homes and businesses. And credit unions have allowed people control their own financial futures – and keep more local dollars in their community. Today more than 115 million people are part of these member-owned financial institutions. Cooperatives have been used for generations and have gone to scale in empowering people in their businesses and communities.
Now is time to look at how this business model can help empower people and communities in the future. Co-ops are poised to help tackle the challenges facing this nation and the globe, such as inequality, climate change and the sometimes-negative influence of information technology on our work and lives. We think it’s nice that leaders from the biggest corporations have recognized the dissatisfaction with the status quo. We know that co-ops are a key strategy to empower people and communities in building a more inclusive economy.