In a new statement, NCBA CLUSA president and CEO Doug O’Brien responds to a Wall Street Journal article (“Move Over, Shareholders: Top CEOs Say Companies Have Obligations to Society“) published on Monday reporting on efforts by the leaders of some of America’s biggest companies to consider employees, customers and society as a whole—not just stakeholder profits—when making business decisions. As businesses that are owned and controlled by the people who use them, cooperatives have embodied this philosophy for more than 170 years.
Read the full statement, “Cooperatives are the preferred business model to build a more inclusive economy” below. We encourage you to read and share the full statement. Use this short link in your social media posts: https://bit.ly/2Zeja7V and be sure to tag @NCBACLUSA and @WSJ. Help spread the word about the original principled, purpose-driven businesses!
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 this 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 further 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 furthest reaches of this country when investor-owned utilities refused. Today, rural electric cooperatives power over 56 percent of the nation’s land mass and more than 19 million homes and businesses. And credit unions have allowed people control their own financial futures, keeping 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 the 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 their 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.