1. Manuel Mariño Regional Director International Co-operative Alliance ACI-Américas CORPORATE GOVERNANCE AND CO-OPERATIVES Global Corporate Governance Forum and Centre for International Private Enterprise (CIPE ) London, England February,8th 2007 direccion@aciamericas.coop

2. GLOBAL CHALLENGES There is an enormous ethical deficit in the global economic system. The globalization of the economy by capital involves social and environmental costs of unequalled magnitude and even results in armed conflict. The global challenge is a new development model that is balanced and durable, one that encompasses economic, social and environmental ends ensuring better conditions for society in general.

3. CHALLENGES IN CO-OPERATIVES It is not enough to wonder if a co- operative is following the principles down to the last detail; what is important is whether it is observing the spirit of those principles, and whether the vision each principle provides is rooted, individually and collectively, in the daily activities of the cooperative. Conflicts between directing the Boards of Directors and Managers. Clear definition of roles. Democratic participation of members Guarantee the most important product: trust and credibility Maintain business ethic.

4. PROPOSAL OF ICA-AMERICAS Develop a model of governance, ethics and leadership allowing each cooperative self- appraisal and progress toward cooperative government. This has three phases: induction, training and dissemination. Promote differentiation of the cooperative business and earn social recognition Improve the platform of competitiveness of the cooperative sector Work toward its integration in the rules of the game practiced in international markets, which, among other things, generate and open new business opportunities. Objectives:

5. Integrate ethical values of governance aimed at strengthening co-operative leadership The program is spearheaded at the highest level of the co-operative: the Board of Director and the Management Responsibility for the direction and implementation of the program adopted should be internalized at the management level, supported on instruments of project management Progress monitoring and follow-up is open to evaluation What is expected?

6. MAJOR ISSUES It is of vital importance to establish simple and transparent electoral mechanisms, which should be stipulated clearly and concisely in bylaws and regulations. Guarantee that members have broad access to elections for cooperative posts and are encouraged to participate as candidates. Their participation as candidates should be promoted. It is of fundamental importance that education and training enable all members to be aware of existing regulations and make informed decisions. Representativeness of the members

7. Mechanisms to evaluate the performance of Directors Precise demarcation of the functions and responsibilities of the Board of Directors, including evaluation mechanisms ensuring due compliance. Establishment, in particular, that members can assess or evaluate whether the action of the Directors is in keeping with existing regulations

8. The cooperative will have clear mechanisms ensuring the accountability of those who hold directing or managing positions so there are no questions as to whether actions carried out are to the co- operative’s benefit. Accountability Prior to the date scheduled for the Assembly, the documents, financial statements and reports in general that will be presented at the Assembly will be available to members or delegates in the cooperative offices.

9. Success in fulfilling the commitments of good government will depend in great measure on information and the way it is transmitted. It is vital to establish concrete guidelines aimed at strengthening transparency in the cooperative. Prevent such dysfunctionalities as corruption, centralization of power, insufficient accountability, limitations on access to information and lack of transparency in decision making. The Board of Directors and Management will ensure precise, clear and timely dissemination of all matters of importance related to the cooperative. Transparency

10. Consider that the dissemination of information should be symmetrical; in other words bearing in mind equal access to information for all members. Assurance that the information disclosed is communicated to all members and stakeholders Assurance that any concern or request for information by members will receive a response Criteria regarding the confidentiality of information should be adopted by the Board of Directors and ratified by the General Assembly Transparency

11. Access to information The cooperative will ensure members’ access to information, especially prior to holding assemblies so that assembly decisions are made on the basis of reliable information. The Directors and Management will present detailed reports on the form and degree of compliance with their commitments, and strive for reporting on their actions in keeping with co-operative principles and values and ensuring due access to information. The cooperative will ensure, through duly established and functioning mechanisms, that members have free access to the information necessary for them to make decisions about the activities carried out by the cooperative.

12. Conflicts of interest The cooperative will have regulations aimed at preventing and eliminating conflict of interest. In this sense, the members of directing and supervisory bodies will at all times be a model of transparency and integrity and should so inform when they have some interest in matters to be adopted, and either abstain from voting on those matters or establish objective procedures of decision making. Conflict of interest is understood as a situation in which a natural or juridical person is faced by different alternatives of conduct due to private interest that may prevail over legal or contractual obligations (labor or economic activity).

13. Thanks you ! Manuel Mariño Regional Director International Co-operative Alliance ACI-Américas www.aciamericas.coop